Metiria Turei

The Welfare Working Group and the back to the future work-for-dole fallacy

by Metiria Turei

Here’s some more information to support my argument that the Welfare Working Group’s recommendations (PDF) are driven by far right ideology rather by evidence. At page 23 of its report, the Welfare Working Group recommends:

…a credible work for welfare scheme be established, in order to test the willingness of a small group of recipients to comply with their job search obligations, such as in situations of six months on welfare for no apparent reason, or earlier if there are successive work test failures. The work for welfare scheme could require a recipient to engage in a compliance activity for a period.

I recall reading a Ministry of Social Development and Department of Labour joint report evaluating the efficacy of the 1990s work for welfare schemes shortly after I was elected to Parliament.  So I went hunting for it, and here is what I found (MSWord, at pages 60 and 61):

The evidence from New Zealand is that work experience programmes have mixed results.  As Table 16 illustrates, participating in Community Work Experience programmes with no wage subsidy decreases the probability of becoming independent of W&I assistance in the first two years after starting a placement.  After two years there is almost no difference in the probability of participants and non-participants being independent of W&I assistance. … (my emphasis)

Table 16 Estimated probability of being independent of W&I assistance as a participant and non-participant in a Community Work Experience programme with no wage subsidy (MSD 2002)

Lapse Period 0.5 years 1 years 2 years 3 years 4 years 5 years
Programme Group
Community Taskforce Participants 20% 31% 39% 44% 49% 53%
Non- participants 26% 33% 40% 45% 50% 54%
Impact ratio 0.77 0.94 0.97 0.97 0.97 0.98
Expanded Community Taskforce Participants 20% 28% 39% 47% 51%
Non- participants 23% 30% 39% 46% 51%
Impact ratio 0.83 0.94 1.00 1.02 1.00
Community Work Participants 17% 26% 38% 47%
Non- participants 24% 31% 40% 48%
Impact ratio 0.70 0.85 0.95 0.98
Activity-in-the-Community Participants 18% 26%
Non- participants 25% 32%
Impact ratio 0.75 0.80

Notes: Estimation Technique: Outcomes regression of propensity weighted comparison group and participants. Population includes all Community Work Experience participants between 1996 and 2001 inclusive. Source: MSD administrative data, 2002.

Yes, that’s right – work for the dole schemes such as the Welfare Working Group is promoting are not just degrading to beneficiaries forced to participate in them.  They undermine real job creation by displacing paid workers, actually reducing employment opportunities.

Work for the dole schemes, on the evidence, simply do not work to get beneficiaries into employment.

They actually decrease the likelihood of people moving off benefit into paid work. What sort of ideological, evidence-averse parallel universe do the members of and advisers to the Welfare Working Group live in? But Paula Bennett still rules nothing out from the Welfare Working Group’s bizarre recommendations.

Meyt says

Published in Economy, Work, & Welfare by Metiria Turei on Fri, March 18th, 2011   

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