Death, Misery, and the Welfare State
Do the tories understand the labour market?
The government has announced plans to reform the welfare system by telling benefit claimants with mental health conditions that they should apply for jobs they can do from home. The rationale behind this move is to encourage the long term unemployed back to work and by doing so fill the record high vacancy rate and reduce pressure on the public finances. Although no doubt well intended, this would be a mistake for a number of reasons.
While I’m sure there was no malicious intent from the Secretary of State for Work and Pensions and his advisers, it is actually a very cruel policy. Providing more options and flexibility in the workplace is a good thing and the government should be working with businesses to improve inclusivity by helping them to make any adaptations in order to help people with long term conditions return to the work force or perhaps even get their first job.
However, this is not what is happening here. There is no additional support for people or businesses to help them with this. Claimants are simply being told that they have to look for work. People who have been signed off sick from work are not faking it – they are genuinely too unwell to work. Making people with mental health conditions look for work risks making things worse. This is because we know that searching for a job is bad for our mental health as it leads to an increase in feelings of sadness and a decrease in satisfaction with life and so could exacerbate the suffering of people who already have depression or make people with other mental health conditions depressed. This is no way for a civilised society to treat vulnerable people.
We know that accepting a job offer is good for the mental wellbeing of the unemployed. What is more, there are numerous benefits associated with having a job which go beyond simply having enough money to live on (which is one of the many flaws in David Graeber’s Bullshit Jobs). It helps to provide a route of poverty while also given people a sense of purpose and community which they may otherwise not have. However, employment should not be seen as a panacea and we need to make sure that people are working in the right roles.
The policy is also a symptom of this government’s tendency to make decisions which might save money in the short term but at the expense of storing up problems for the future. We’ve seen this illustrated quite starkly with the school concrete debacle and we risk a similar situation developing with these welfare reforms. Forcing people to work who are too unwell means it will take them longer to recover and in many cases make their symptoms worse. This means they will place extra pressure on the NHS and will likely find themselves back in receipt of benefits, costing much more taxpayers’ money in the long run. We have already seen this happen with the introduction of Universal Credit and the negative impact it has had on the mental health of younger, less educated people. We should expect to see this exacerbated by these latest reforms.
Finally, it shows that the government does not understand the labour market. Working from home is in decline with demand for remote working outstripping the number of roles available. These roles tend to be for people with more skills which again works against those who have been out of work for a lengthy period. What is more, to work from home you obviously need a reliable internet connection which again puts people who have been out of work for a long time. Forcing people into work who are ill and who don’t feel equipped threatens to dampen productivity as people forced into unsuitable roles are unlikely to be a good fit or be highly motivated to carry out their duties. Given that productivity is the key driver of economic growth, the reforms risk causing even more damage to our economy.
Fixing welfare will become even more of a priority in the coming months due to the current and likely future health of the labour market. The government and Bank of England’s mismanagement of the economy has already led to an increase in unemployment, and this is likely to get even worse. As is so often the case, it will be the young and low earning households who will be the most vulnerable to any downturn in employment. While we will thankfully avoid a major recession and mass unemployment, the post-pandemic tight labour market days are well and truly over. What is more, young people who are lucky enough to avoid getting the chop will still be facing stagnant living standards.
As such, it is crucial that there is a true safety net in place to help deal with this likely increase in unemployment. One of the few things the government has got right during the last 13 years is the furlough scheme during the pandemic. The government realised that it would be inappropriate to plunge people into poverty by forcing them onto Universal Credit if their employers could no longer continue operating.
However, this is what the government does to people everyday who suddenly lose their jobs and so see a massive hit to their incomes. The government needs to scrap Universal Credit and introduce a form of income protection insurance so that people who suddenly find themselves out of work and who have been unable to save up due to the cost of living crisis can continue to pay their rent or mortgages and are not forced to get into debt while they find the right job. While this almost certainly will never happen, the government should introduce a Universal Basic Income in order to provide a true safety net and improve skills and job matching and boost productivity.
If the government is serious about helping people back to work and boost productivity then it will abandon its habit of short-term thinking and instead develop a long term plan. It should ensure that people with mental health conditions get access to the help they need as quickly as possible and work with businesses to help them make changes to boost inclusivity and opportunity for people living with disabilities.