Today’s Labour Market Statistics reveal that the number of those on unpaid work schemes rocketed by 22,000 people in the last three months. The headline figure claims that unemployment fell by 49,000, however those on workfare are classified as employed. This means that along with 3000 more people beginning unpaid work in a family business, over half of the fall in unemployment is due to people working for no wages.
This is reflected in the Claimant Count, which measures the number of people who are claiming unemployment benefits, and which grew by 10,000 during the period.
People on workfare, often under threat of losing benefits, have long distorted the unemployment statistics. Last months alleged fall in unemployment could entirely be accounted for the rise in workfare, self employment and unpaid family business workers.
In the previous months figures it was claimed that unemployment fell by 7000, yet the number of people on workfare soared by 24,000 . This means that if unpaid workers are taken out of the figures for August’s release then unemployment actually rose by 17,000 people – despite any pre-Olympic boost.
The last time the number of people working unpaid was so high was way back in 1998 when Tony Blair’s mass workfare programmes began to take effect. There are crucial differences however. Whilst unemployment was high in 1998, it was significantly lower than today with around 1.8 million out of work compared to over 2.5 presently. Participants on the New Deal received a training allowance, whilst young people on the Subsidised Employment option were paid £60 a week – astonishingly this is more than the £56.45 that young people on workfare receive today. Even the workfare elements of the New Deal included training, usually with real, acredited NVQs available on completion.
Despite all of this the New Deal was largely abandoned after proving to be an expensive disaster which had little impact on youth unemployment.
Iain Duncan Smith’s flagship Work Programme appears to be an equally dismal failure as long term unemployment continues to soar. The number of people who have been unemployed for over two years shot up by a staggering 21,000 over the last three months, whilst those out of work over a year rose by 12,000.
The Work Programme is for those who have been unemployed over 12 months. Almost a billion pounds has been handed to Welfare to Work companies in an attempt to help those out of work a long time to find jobs. Despite this long term unemployment has risen month on month consistently since the scheme was introduced.
Today’s unemployment figures represent July – September and so are still likely to be affected by the Olympics. The figures will also be distorted by the growing number of claimants who have had benefits sanctioned – meaning money is stopped due to not meeting the endless and ever changing job seeking requirements imposed by Jobcentres. Over half a million claims were sanctioned last year and the number is expected to rise.
Sanctioned claimants may or may not appear as unemployed, depending on whether they are able to maintain their claim during a sanction and answers they give should they be questioned by the Labour Force Survey. Many more claimants are ‘disallowed’ Job Seekers Allowance due to not meeting the stringent benefit eligibility.
With the claimant count on the rise and workfare behind much of the fall in unemployment over the last year, the true picture of the employment market is far from rosy. Plans for a huge extension of workfare, which the DWP are now trialling in Derbyshire, will see thousands more people forced to work unpaid.
Many of the new workfare workers will be doing jobs which would previously have come with wages attached - an increasingly outdated concept for many major retailers. Earlier in the year Corporate Watch reported on the situation in one branch of Argos last Christmas:
“There were about 15 of us on placements. The manager said they had overspent on stocking Christmas stuff so they’d got people in on placements [to save money]. The paid staff told us they were being asked to leave before they’d ended their shift as we could do the work. I worked Christmas Eve and New Year’s Eve. They arranged it so everyone came in those days.”
Should the current trend for workfare continue then over 200,000 people could find themselves in unpaid work over the Christmas period. And no doubt Iain Duncan Smith will announce this as a huge success – which it is, if you happen to run a supermarket.
Join the Week of Action Against Workfare beginning on December 8th.