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    Letter No.45
    27 August, 1996


  • ELECTION '96
    As NZ First announces it would replace the unemployment benefit with a "community wage" tied to part-time community work or training, they have sparked again the debates on policies which amount to working for the dole, or 'workfare' as it is popularly known overseas.

  • NZ First leader Winston Peters says that their top economic priority is to "create the climate where work will be available to everyone who wants it..." He says his policy of a community wage for unemployed people, who should also be required to work at least two days a week, was to "counter the poison of dole money..." and is a positive alternative to "the negative funding of the unemployment benefit."

  • NZ First's proposals are that if a single person received $160 a week gross on the unemployment benefit, they would be required to do community work ... for example, for 16 hrs a week, if the going market rate for the particular work was $10 an hour. The proposal is that they might also be paid similarly for their attendance on training schemes.

    Peters: "Some will characterise our policies as meaning the unemployed will work for the dole, but the policy is much more sophisticated and compassionate than that..."

    Sue Bradford of the Auckland Unemployed Workers Rights Centre disagrees. She describes NZ First's community wage proposals as a "serious attack not only on the jobless, but also on all those still lucky enough to be in work..." She says that when people are forced to work for the dole, this also undermines the situation of employed workers "... who have already had their wages and conditions plunged downwards by five years of the Employment Contracts Act."

    Bradford: "Unemployed people are not bludgers and unemployment is not a crime. We want real jobs at real wages ... NZ First does not seem to understand the gross injustice of forcing people to work at subsistence wages at jobs they don't wish to do, in the same way as people convicted of crimes are obliged to attend Periodic Detention. The only difference is that unemployed people don't have the benefit of a judge, jury or defence counsel..."

    National's employment Minister Wyatt Creech also criticises the concept of a community wage, saying the concept is little different from what is being offered now through Taskforce Green and Community Taskforce.

    Creech: "Community Taskforce allows jobs seekers to work on community projects three days a week and still have time for job searching. They continue to receive their benefit, plus a travel allowance, and retain any other supplements they may have..."

  • But while the government has got a limited workfare style programme in place with these programmes, it has stopped short of putting substantial resources into these options so that they can be taken advantage of by a wider number of unemployed. The stats: last month, there were 2,845 people or only 2.6% of the official unemployed on Taskforce Green, and 2,443 people, or 2.2% on Community Taskforce. The Labour Department is budgeting to provide 14,000 positions on these programmes over the 1996/97 year.

    The community wage scheme is little different from what is known overseas as 'workfare'. Workfare advocates say they are turning a welfare system that revolves around cheque-writing ... into one that revolves around job training and placement.

  • The policy appeal of workfare is that it addresses one of the economic problems caused by the welfare state. The theory is this: It is generally regarded as desirable that the state should provide an income to people unable to support themselves when they cannot find work. The trouble is that by paying the welfare benefits, the state reduces the incentive for an unemployed person to find a job. Because of this, welfare benefits may actually be adding to the numbers of unemployed, as much as they also ease the suffering of its victims.

    Workfare advocates say that their programmes will help people get jobs by giving them skills, experience and pride. The critics disagree, saying that the 'jobs' are usually dead-end tasks propping up budget-starved voluntary, social or environmental services. If workfare is combined with a public works programme, it is considered expensive, bureaucratic, and simply welfare by another name.

    The trend towards workfare-style schemes has been gaining momentum internationally throughout the 1990s.

    Britain. The Labour Party under Tony Blair has pledged to offer every young Briton who is unemployed for six months a subsidised job in the private sector, a job with a non-profit voluntary-sector employer, a place in full-time education, or a job in a government-financed "environment taskforce". Failure to undertake one of these options would mean disqualification from welfare benefits.

    Canada. Some Canadian provinces have been experimenting with workfare, with Ontario announcing earlier this year that about 300,000 people on general welfare assistance across the province will work about 17 hours a week on community projects, including painting senior citizen's homes and building sporting grounds. The first stage of the mandatory $100m programme will include only single, able-bodied people under the age of 65 years with no dependents... but eventually single parents with older children will have to take part.

    United States. Earlier this month, President Bill Clinton signed perhaps the most significant domestic policy legislation of his administration in measures to 'end welfare as we know it". (see Jobs Letter No.44 for details) The policies include rigorous work requirements for people on welfare: within two months of offering benefits, states can require recipients to perform community service; within two years of receiving welfare, the family head must begin working or the family loses its benefits. Clinton describes the measures as a "historic opportunity to make welfare what it was meant to be -- a second chance, not a way of life."

    Sources - New Zealand Herald 10 August 1996 "Work for dole with NZ First" by Audrey Young; Sunday Star-Times 18 August 1996 "NZ First works to promote its new employment policy" by Ian Templeton, Time 12 August 1996 "Bye, bye American Pie" by Christopher Ogden, and The Ottawa Citizen 7 April 1996 "Workfare is a dead end for welfare recipients, critics say" by Maria Bohuslawsky.

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