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All work and no pay – the rise of workfare

Anne-Marie O’Reilly and Warren Clark report on plans to extend ‘welfare-to-work’

November 16, 2011
7 min read

‘She found another placement for me at Primark. I worked from 10am to 4.30pm or 5pm with a half-hour break. They didn’t pay any money. It was nearly six months – January to June. When I finished the volunteer work I went to the manager: “Do you have any vacancies?” They said “We’ll call you when we do.” I haven’t had a call.’
Karina, jobseeker placed at Primark under the Flexible New Deal

As consumers, we may all be guilty of ignoring the poverty wages paid by companies such as Primark in their factories abroad. But how many of us are aware of the exploitation going on in the UK, as workfare schemes allow such companies to profit from free labour?

Karina’s story (above) is not uncommon. More and more people are being compelled to work without pay on threat of losing the poverty income of £67 per week (if you’re over 25) that jobseeker’s allowance (JSA) provides.

Workfare in the UK

Karina was mandated to work in Primark under New Labour’s Flexible New Deal. She had been sent to a private ‘welfare to work’ provider whose regime included putting claimants to work without pay in businesses, charity shops and public sector workplaces. Although regulations meant that she could only be obliged to work for up to 12 weeks without pay, she worked for 24 weeks, fearing she would have her benefits stopped if she did not agree. She had signed up to and paid for a college course that would help her find work but she had to give it up to do the placement: ‘They told me they would stop my JSA, so I stopped my English course.’

New Labour introduced work-for-your-benefits schemes, or ‘workfare’, and initiated welfare reforms that enabled the ‘welfare-to-work’ industry to boom. Now the Conservatives are extending welfare-to-work providers’ control of unemployed people’s lives to two years, during which a claimant may be mandated to do anything from sitting in the provider’s office applying for 100 jobs a week to undertaking periods of unpaid ‘work-related activity’ (the new euphemism for work, designed to avoid minimum wage legislation).

Under the Flexible New Deal, at the end of a year in the hands of a provider, claimants were allowed to return to the normal requirements of the jobseeker’s agreement. However, with the launch of the government’s new Work Programme, Department of Work and Pensions (DWP) minister Chris Grayling has indicated that the two-year referrals will ‘loop’, meaning claimants could be on the programme indefinitely. As long as they are, people will be required to take up unpaid workfare placements organised by the jobcentre.

The impact on jobs and wages

The Work Programme is a real threat to jobs and wages. In an example uncovered by Corporate Watch, Newham Council filled an administrative role with a six-month workfare placement. A colleague explained: ‘The basic starting wage for that level is around £17,000. Yet all she was getting was JSA and the fares for her lengthy bus journeys, while people doing identical work were getting a salary, paid leave and pension contributions. We were horrified.’

Last year, 800 station staff on London Underground were cut, prompting concerns for passenger safety. Just months later, a new workfare initiative was rolled out by A4E (one of the Work Programme providers) to provide 200 workfare wardens to make ‘people feel much safer’ at north London tube stations. The need for a uniformed presence remains; the paid employment does not.

In the US, the long-term effects of workfare are stark. In New York, 20,000 unionised workers in the city parks department were replaced by 30,000 workfare workers in the first years of the scheme. The challenge to organised labour is huge.

In some areas, there is less than one job advertised for every 20 people seeking work, yet unemployment is being identified as a personal failing. Workfare is a manifestation of the government’s attempt to discipline and control the lives of the unemployed. A central theme emanating from both the Labour and Tory conferences was the condemnation of people getting ‘something for nothing’. They were targeting people claiming benefits, who Iain Duncan Smith was quick to link to the summer riots: ‘It is little wonder when you consider the way these areas have been blighted by welfare dependency over the years.’

‘Getting something for nothing’, though, is an accusation more appropriately levelled at the companies whose unpaid staff are subsidised by the taxpayer than it is at unemployed claimants.

Punishing claimants

Workfare providers are often reported to treat participants with disdain. A4E reminds claimants via email that unemployment is due to a lack of positive thinking, and some of Reed’s lucky claimants are given copies of a book by the company’s founder, James Reed, explaining how a ‘3G mindset’ will help them get a job. Yet Reed, a recruitment agency, does not make the jobs it advertises available to those on the Work Programme, since this is a ‘different arm of Reed’.

Providers are not even averse to using claimants to carry out work on their own premises. A4E was recently listed as one such provider doing so.

The state-sanctioned intrusion of these private companies into individuals’ lives does not end when participants secure employment. They still receive phone calls from their Work Programme ‘employment coach’ over the full two years. This is to ensure that the private companies can claim their bonuses when someone manages to stay in work for six months or more.

In the new climate of claimant-as-criminal, it is fitting that G4S, which runs prison and detention centre transport, was awarded its Work Programme contract on the basis of a bid promising to send a ‘field operative’ to a claimant’s door within two hours if that person was ‘non co-operative’.

Even the government’s advisory committee spotted that the reforms place more emphasis on punishing claimants for being out of work than helping them find it. Its report on mandatory work placements concluded: ‘Published evidence is at best ambivalent about the chances of “workfare” type activity improving outcomes for people who are out of work’ and ‘being mandated to mandatory work activity is regarded as a punishment.’

Boycott workfare

Who is arbiter of the relationship between big business, the state and the citizen, and where are the democratic checks and balances? Since claimants are now the responsibility of private companies, there is not even the basic accountability afforded by the Freedom of Information Act, and it is difficult to discover which companies are profiting from mandatory work placements. Iain Duncan Smith has forbidden providers from sharing performance data voluntarily. The government clearly thinks the less we know the better.

The future of workfare in the UK is far from certain. Right wing think-tank the Social Market Foundation has predicted that the Work Programme will fail unless the government makes the ‘success criteria’ involve a lot less success (although how they can claim ‘payment by results’ without actually finding people work will be in an interesting challenge to navigate).

Claimants are beginning to expose the harsh realities of the Work Programme, and the Boycott Workfare campaign has formed to challenge those companies and organisations getting ‘something for nothing’ through claimants’ unpaid labour. John Locke, commonly referred to as the ‘father of liberalism’, theorised that the contract behind modern British democracy includes the inalienable right of people to sell their labour. Workfare is one name for a system that forces people to work for free; slave labour is another.

www.boycottworkfare.org

Photographs of claimants on workfare schemes by Philip Wolmuth

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