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The Benefits of a Welfare State

Friday, February 3, 2023 8:02

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Reading this article in the Gaurdian, I think the answer to whatever question they are trying to ask, is a reduction in benefits, but I doubt that’s what they were going for

UK benefit changes have pushed people into dead-end, low-paid jobs, says IFS

If this is true (I doubt it, but I’m not expert), it means that benefit changes have moved people into work. The type of job does not matter. The only thing that does matter is that they’re not languishing in a life of state dependancy where they will own and achieve nothing (Or sponging off the taxpayer, for those who actually want to be on benefits)

Most people enter the world of work in a low paid, dead end job. The idea is to gain experience and move up the jobs ladder. If you’re long-term unemployed, the same may be expected to get you (back) into work

(Just for the record, I no longer think there are ‘low-paid’ jobs in the UK, due to the minimum wage. There are jobs that will not feed a family of four and pay a mortgage, but these jobs are not supposed to. They are only a stepping stone to such. The pay you get for doing these jobs is higher than it’s ever been un UK history, but the min wage is a discussion for another day)

Tougher rules have boosted employment but jobs offer scant career progression and contribute little to tax revenue

Minimum wage, entry level jobs often offer little in the way of career progression, unless you’re willing to learn more and gain experience and maybe use that to move to a different job with a new company

The idea that they contribute little to tax in this context, is complete bunkum. Sure, Minimum wage workers don’t pay much in income tax, but the Guardian is forgetting the tax saving from getting them off benefits and into work

The Institute for Fiscal Studies (IFS) said successive waves of welfare changes since the late 1990s had imposed more stringent conditions on those claiming jobless benefits and increased the incentives to find a job.

Yet its research also found that many of the jobs found were part-time, low paid and had scant chance of career progression.

As a result, the thinktank found those encouraged to enter paid work had tended to remain on low pay, were paying little in tax and were often still entitled to in-work benefits.

So people are coming off benefits and getting jobs. These jobs may be entry level, but they are actually entering the world of work. So what is it the IFS actually want? The endgame is often missing from these articles; it’s just one big gripe with no solutions offered or suggestions made

“Policymakers would do well to look beyond the headline employment number when setting benefits policy, and consider how the system – and other parts of policy – can be shaped to promote longer-term career progression.”

That may make sense to Guardian readers, but it doesn’t make a lick of it to me

According to the institute, a low earner with children in 1997 to 1998 on average had lost 50p in reduced benefits or higher taxes for every £1 earned when they moved into part-time work. Today that figure is 38p.

All they’ve really said is that benefits pay more than work. If you get a job, you get paid less than being on benefits. You may even get your wage topped up by universal credit

So the obvious answer is a massive reduction in benefits. And maybe a cap on the length of time you can claim. Make the system a safetly net again, rather than a lifestyle choice for the lazy and a subsidy for employers

That must be it, right?

Source: http://fuelinjectedmoose.blogspot.com/2023/02/the-benefits-of-welfare-state.html

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