Former Conservative Party leader Iain Duncan Smith has set about reforming the benefit system, but how can he truly ensure that work always pays?
[Although this article is written from a British perspective, it is applicable to all so-called advanced nations, and will become applicable to more and more both as the world industrialises and as unskilled workers are displaced by advances in technology].
If you haven't been following the UK soap operaEmmerdale, you will not be au fait with the sudden and dramatic fall from grace of the Reverend Ashley Thomas. After being cautioned for slapping his elderly father he resigns his position, is kicked out of his cottage by his formerly adoring wife, and finds a job in a burger bar. Due to what might be called ideological differences, he lasts less than a week in that job. The company has a policy of throwing away uneaten bread rolls; Ashley feels they should be used to feed the hungry, and is sacked for theft.
What does a man of fifty in his position do? He tells a confidant that he has degrees coming out of his ears due to his education - university and theological college - but due to both his particular circumstances and the hysteria over any sort of criminal conviction for violence, even a slap, he is as good as unemployable. Let's stick with the burger bar though. According to Iain Duncan Smith, work must be made always to pay, including for the likes of the former Reverend Ashley Thomas, but can a burger bar job pay a living wage?
Let's relocate to Sydenham, where there will soon be an arts festival, and where the price of a burger bar meal is around £3.00. The minimum wage in London is currently £5.93 per hour. If Ashley Thomas were working in a Sydenham burger bar, selling two burger meals an hour would cover his wage. The actual fictitious burger bar which employed him, albeit fleetingly, had two senior staff including the manager, who would presumably have both earned more than him, but let us say the manager earned roughly 50% more and the other employee the same as Ashley. That bumps up 2 burger meals per hour to 7, but of course, the bar doesn't get its food for free, so allowing for a 50% mark up - including wastage, etc - we are now on 14 burger meals per hour just to pay the staff.
Unfortunately, unlike banks, burger bars and similar businesses can't create money out of thin air; every cent they receive has to be coaxed out of someone else's hand. Also, like similar establishments, your local burger bar will show a big profit on tea and coffee, but assuming this is a franchise or part of a chain, there are bigger salaries to be paid, and in some cases, shareholders. There are other expenses such as rent, rates, gas, electricity, transport costs, telephone, industrial cleaning, maintenance, you name it.
At certain times of the day, lunch, which may stretch over two or three hours, and early evening, the bar may do a brisk trade, but there are other times when it may do little if any, and some staff will be working both before it opens and after it closes. That is a lot of burger meals to pay just one man minimum wage. Nor should we forget that full time staff will be entitled to bank holidays (or days in lieu), and paid holidays as well.
Assuming though our ex-vicar or whoever can find a burger bar job at minimum wage, the big question is can he live off it? The answer is clearly no, not if he is the breadwinner or main breadwinner for a family of four, and he can forget about running a car or even commuting more than a short distance to work. In London, to pay for an off-peak travel card, he would have to work for nearly two hours, and don't even think about a mortgage.
Now let's look at some real cases. Like the fictional Ashley Thomas, former Accrington bank employee Matthew Hayhurst fell foul of the law, with even more disastrous consequences. After syphoning off over £90,000 from a customer's account to feed his gambling addiction, he was sentenced to 18 months behind bars.
While some might think that sentence unduly lenient for the sum involved, Mr Hayhurst will find his real punishment begins the day he leaves prison, and is likely to do endure for the rest of his life. Although he is considerably younger than the former Reverend Thomas, he has likewise thrown away his vocation. In the era of laser printed CVs, he will never again be trusted to handle money, so he can forget working on a supermarket check out or even in a burger bar like Ashley, unless it is doing something mundane like chopping tomatoes, clearing tables and mopping the floor. He does though obviously have brains, so he may find some sort of employment that is not quite on the bottom rung of society, but that may necessitate retraining, and his criminal record will still follow him for the rest of his life. What though if he had no brains?
That was and is the case with many of those caught up in the riots that shook Britain last year. While it was only right and proper that the courts dealt with most of them severely, the big question is what happens when they are released from prison? Laura Johnson will have no problems; if she can't resume her studies through her obvious mental defects or for some other reason, her rich Daddy will ensure she never wants for anything, but what about the muppets she was chauffeuring around last August as they looted shops?
Although he received only a year behind bars, Christopher Edwards is not exactly brain of Britain, and barring some miraculous transformation, it is doubtful if he could earn any sort of living wage. In addition to his conviction for dishonesty, he and many people like him have a gangsta mentality, and are likely to spend the rest of their lives in and out of prison. What is the solution?
Again, IDS seems to think he can somehow ensure that work pays for such people; the reality is that many graduates are unable to find meaningful work, like the one featured in a recent BBC television programme about sofa surfers. If an attractive, intelligent, qualified person like this young woman is having problems, what hope is there for an unkempt street punk with a bad attitude?
The latest idea from IDS will win him no friends in the trade union movement, but as ever he is not tackling the real problem because he doesn't have a clue what it is. The pursuit of full employment is a ludicrous task; he and we have to face the fact that in the modern world there will never be full employment again, and we should welcome this as a good thing. This means that as Major Douglas said, the dividend must progressively replace the wage/salary as a form of purchasing power, in short there must be a Basic Income for all. Unless and until we recognise this instead of pursuing policies that amount to the persecution of those less fortunate than ourselves through workfare and similar crackpot schemes, we are sewing the seeds for more social unrest, the consequences of which will be detrimental for everyone but the banksters and those who live off their largess.
In case the reader is still missing the point, he should check out this (mildly satirical) article about William Shakespeare, and two other iconic figures from the modern age. In a sense, nobody is unemployable, even a quadriplegic with no meaningful academic qualifications could in theory be employed monitoring a bank of security cameras or something of that nature, and even a recidivist with drink problems, learning difficulties and halitosis to boot can be set to work picking potatoes or something of that nature, but the bottom line is that the underclass cannot for the most part earn a living wage.
A hundred years ago, when Irving Berlin was experiencing his first taste of fame, even a man of Jim Conley's humble estate could support himself by pushing a broom, but today probably the only job which anyone would offer Irving Berlin much less Jim Conley would involve similarly mundane work, and there is no way he or anyone could support a family on the pittance such positions pay.
Unless and until IDS and his masters acknowledge this simple truth, neither he nor they will make any progress solving the real problems facing especially the poor but increasingly even graduates in the 21st Century western world, and other advanced nations like Japan. Namely, the distribution of purchasing power, not the creation of work for work's sake or the bludgeoning of the underprivileged into workfare or similar schemes. To continue to attempt to do so is not only a recipe for social unrest, but will ultimately create more problems than it will solve together with even more expense and yet more public debt.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com