The War on Welfare

As well as Gordon Campbell's piece that I linked to earlier on the continuing life of the Welfare Working Group, there was a well-researched piece from TimWatkin, and series of acerbic posts from Danyl McLaughlan, including an amusing suggestion for a reality TV show involving Paul Holmes

The take home point is that it's the economy, stupid. The Welfare Working Group sets an objective of getting 100,000 people off benefits. It's not hard to see how that might be achieved: just prior to the recession, in June 2008, there were 75,000 fewer people on benefits than there are now. At one point in 2008, the number on the unemployment benefit had dropped to 19,000. It's hard to square this, and the hundreds of people that line up for a chance at a few supermarket jobs, with the view that New Zealander's need more "incentive" to look for work.

Any perception of a recently developing crisis is inaccurate. As Watkin reports, the proportion of the working age population on benefits has been higher than it is today for most of the last twenty years. Yet in 1970 it was just four percent. What changed? Since the 1970s, the New Zealand economy has seen radical restructuring, notably through the liberalization of trade, downsizing of government and sale of many public assets. These changes significantly raised unemployment: for their advocates that was the price of economic efficiency. At the time, some pointed out that they wouldn't necessarily be socially efficient, but that quibble was lost in the winds of change.

The other major change in the 1970s was the introduction of the domestic purposes benefit. As Watkin says:

Given that it allowed women to get out of unhealthy, unhappy, even dangerous, relationships, I assume we think it's not a bad policy.

Again, the figures are hard to square with the certainty of talkback radio callers and Stuff website commenters that large numbers of [young] women are "breeding for a business". The Ministry of Social Development's helpful fact sheets report that just 10 percent of domestic purposes beneficiaries have been continuously on the benefit 10 years or more. Coincidentally, this is about the same as the percentage of domestic purposes beneficiaries who are male.

A number of critics have made the point that the miserly payment levels of the DPB hardly make for any sort of viable "business". Less well noted is the assmption (including by the WWG) that caring for children is not "work". Paid, no. Work, definitely. As somebody who now gets quite well paid for working, I never fail to appreciate that most days it ends at around 6pm.

The final third of benefit recipients are those on the sickness and disability benefits. Campbell points that out the percentage of working-age New Zealand receiving sickness and disability benefits is well below the OECD average, and the proportion of sick and disabled people in employment well above the OECD average.

In short, where work that offers subsistence level or above is available, New Zealanders generally take it. Most analyses conclude that there may be a hard core of recalcitrants, but if so, they consistute a small minority of beneficiaries. The question is not whether some proportion of welfare recipients are ripping off the system. but whether this is the most important issue facing the country at the moment. While the economy remains sluggish, and even high-skilled jobs continue to disappear on a weekly basis, forcing sole parents, the sick and the disabled to pound the pavements seems like the height of perversity.