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Goodbye welfare, hello workfare


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You lose your job. You claim welfare and are offered a job almost immediately. But the job does not pay wages (despite being with a company which can afford to pay them) and if you refuse to accept this ‘opportunity’, your welfare payments are stopped and you therefore face destitution. Welcome to a life on workfare, which is now the reality for millions of people across the world.

As should be expected with a powerless workforce, exploitation abounds. In Britain, people have been made to work without safety equipment and used as cleaners in the houses of the rich. The country which gave the world workhouses may now force people with terminal illnesses to do workfare. In Israel, people have been compelled to carry out work on Israeli Defense Force bases. When workfare arrived in New York, people were put to work in the mayor’s garden, where one person dropped dead. When the policy was introduced in Canada, the general counsel of the Civil Liberties Union called it ‘conscripting labour in a free society’. New Yorkers on workfare sum it up in one word: ‘slavery’.

The 1990s saw workfare rolled out in Australia, Canada, Britain and the US. Despite research in Australia concluding that it has an insignificant effect on reducing long-term unemployment1 and is ‘ineffective in helping participants find sustainable employment’,2 it continues to be implemented. In the US and Canada this has been on a state-by-state basis, with some schemes requiring work in not-for-profits and others taking place in private companies. Taking its impetus from the previous Labour government’s New Deal, the current coalition government in Britain is intensifying workfare with five draconian schemes.

Workfare serves as a reminder that discrimination intersects with poverty. In the US and Australia, those bearing the brunt are African Americans and indigenous people respectively. And workfare increases poverty, as US Professor M Katz attests: ‘Workfare is a non-response to the structural sources of poverty in America. It addresses the politics of poverty, not its roots.’

Big business

One of the similarities between these countries’ workfare schemes is that the transnational companies directly profiting from them share a business model which depends on acquiring public funds from government contracts. US-owned Maximus boasts that its clients include government agencies throughout Australia, the US, Britain, Canada and Israel. A4e, which, along with other British providers, is currently being investigated for fraud, has contracts in Australia, South Africa, Germany, Poland and France.

In his bid for re-election as French president, Nicolas Sarkozy announced workfare as a key policy initiative. Perhaps no-one has told him that it neither increases people’s chances of employment nor creates jobs. If anything, workfare undermines the pay and conditions of other workers, whether in the private or public sector. In the US and Canada, unions have actively fought against workfare, highlighting that it replaces paid public sector jobs, and in New Zealand/Aotearoa last year, a British government minister on a visit to promote workfare was met with protests.

Britain’s workfare policy has triggered a media furore and demonstrations in 40 towns. The campaign has forced some companies, including Burger King, to pull out. Others, such as McDonald’s and Tesco, have not. Some politicians have voiced fears about the very real prospect of ‘job substitution’, citing examples from their own constituencies. Staff in at least one branch of supermarket chain Asda (owned by US giant Walmart), have seen overtime disappear with the hiring of workfare staff. After all, why pay wages if you can get a free workforce?

Even Oxfam was contributing to poverty in Britain through its involvement in workfare schemes, until a public backlash caused it to reconsider.

Social contract

The social contract between state and individual is being rewritten. Aided by media rhetoric of ‘dole queens’ and ‘benefit scroungers’, workfare is part of a wider narrative arguing that countries can no longer guarantee the welfare of their citizens. This narrative exposes the real thinking behind workfare: to deter people from claiming welfare and reduce welfare expenditure. Unemployment is no longer a consequence of competition for jobs in a globalized market, or the failure of governments’ economic policies. Instead, it is the personal failure of the individual to gain employment, regardless of financial crisis or recession. Yet blaming the individual looks increasingly weak. The International Labour Organization recently issued a report which concluded that the global economy needs to create 600 million jobs in response to the employment crisis.

As workfare decreases paid employment, it also undermines economic recovery. This creates a paradox: while the concept of welfare is eroded and those who receive it are expected to get less for doing more, companies involved in workfare benefit from higher profits without employing more people. Tesco has acknowledged that it has profited from approximately 300,000 hours of unpaid work from 1,400 placements in ‘recent months’. Neoliberal governments and the workfare industry are actively intervening to restructure the labour market by suppressing wages and increasing the pressure on people to accept low-paid work.

The labour market is becoming a workfare market.

Warren Clark is a freelance journalist and writer, specializing in welfare rights.

  1. G Marston and C McDonald, ’Assessing the policy trajectory of welfare reform in Australia’, in Benefits, Vol 15, 2007
  2. Australian Council of Social Service, ’Does Work for the Dole lead to work for wages?’, New South Wales, 2003.

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