Unemployment Benefit: Getting Things Into Perspective

If you ask people what they think the biggest problem facing this country is you quite often get one of two answers. Either it is immigration or it is the problem of people who are living a life of luxury on the dole because they do not want to work.

It is important if you are talking about the biggest problems that you get some sort of perspective. I have covered some points about immigration on another site1 and intend to do more. So in this post I shall mainly look at the ‘problem’ of unemployment.

First of all have a look at this graphic from the Office Of National Statistics (have a think about it before clicking on “show me the actual split”):

£3.3billion is still a lot of money. Also you may say that housing benefit still has to be paid, there are people who claim Incapacity, disability & injury benefits who are capable of work (I will talk about this later). It must also be realised that some of this money goes to people who are ‘in-between jobs” – they are people who are unemployed for less than 6 months rather than being stuck in ‘welfare dependency’ (again I shall talk about this later).

UK Government ‘rip off’ contracts2, Abandoned NHS IT system3, Nuclear Waste cleanup4, Cost of austerity5

Just to reiterate that I am not trying to make direct comparisons here and there are many more things that I could add into the graph above – tax avoidance, tax cuts, other failed government IT projects…It is just to get things into perspective.

Unemployment Benefit is a yearly cost and the others are one off costs. However, it is interesting to note that these one off costs would pay for Unemployment Benefit for over 74 years.

Now let us look at things not as a comparison but to give us some perspective on what are important problems.

Real wages in the UK have not performed well since the crash in 2008:

One of the reasons the UK economy has kept going is that people have been borrowing to meet their expenditure. People are purchasing goods and services which creates jobs. The people in those jobs buy goods and services which creates jobs… However, if the expenditure is based on increasing debt it is not sustainable. Private debt in the UK is now £1470 billion6 – 445 times what we spend on Unemployment Benefit.

If you think this is bad then just have a look at bank debt in the UK:

I am not trying to predict another banking crash but surely this is something that we should be talking about. At its peak the 2008 banking crash lead to the UK tax payer being exposed to £1047 billion of debt7 – over 350 times what we spend on unemployment benefit.

Again this is not an exhaustive list of other problems – in fact I think that there is a bit problem with the way that our society is organised rather than with individual parts of it.

The ‘Three Generations’ Myth

I have already talked about a similar issue in a previous post: Not Believing Your Own Eyes. We sometimes get a very distorted view of the world because of our own sampling bias and more importantly what we are told by the media and politicians.

Everybody knows that there households where three generations have never had a job:

  • Behind the statistics lie households where three generations have never had a job. (Tony Blair, 1997)
  • We have got places where there are three generations of men who have never worked. If your grandfather never worked and your father never worked, why
    would you think work is the normal thing to do? (Dame Carol Black, 2008)
  • … on some estates … often three generations of the same family have never worked … (Iain Duncan Smith, Secretary of State for Work and Pensions, 2009)
  • … living on welfare has become a way of life, inherited through the generations from parents to children. (Baron Norman Tebbit, 2010)
  • … there are four generations of families where no-one has ever had a job. (Chris Grayling, Minister for Work and Pensions, 2011)

Such families probably do exist however researchers have had no luck in finding them8. They have found families where there are two generations in which no-one has ever had a job but that is 0.09% of the working population9 (see graphic on above).

A Few Rotten Apples

When people such as Philip Green or Robert Maxwell steal millions from pension funds or a police officer attacks an innocent member of the public we are told that these are just a ‘few rotten apples’.

However, certain parts of the media continually give us negative stories about people on benefits or immigrants and use that to attack everyone on benefits or all immigrants.

At this point I was going to write something about people who claim benefits because they are not well enough to work. However, I think I have spent enough time writing this post. If you think this is the ‘problem with this country’ then please give me a decent argument why. This means looking at proper statistical research and not ‘I know a bloke round the corner’ or ‘I read in the Daily FakeNews’. Not only should you put this in perspective – how much is it costing compared to other costs – you should also say:

  • how much is it going to cost to fix it?
    For example the cost of disability tests have doubled in cost to to £579m a year but targets are still being missed according to the National Audit Office10.
  • What the other effects would be?
    Also the stricter benefit lead to deaths – thousands have died after being found ‘fit for work’ 11 along with deaths linked to benefit sanctions12. So how many deaths do you think are acceptable to meet your targets?

1 Don’t Be Fooled By Divide And Rule, Lowestoft Stand Up To Racism (https://lowestoftstanduptoracism.wordpress.com/2017/01/28/dont-be-fooled-by-divide-and-rule/)

2 Government wastes £31bn on ‘rip off’ contracts, The Telegraph, 09 Jan 2012 (http://www.telegraph.co.uk/news/politics/9001510/Government-wastes-31bn-on-rip-off-contracts.html)

3 Abandoned NHS IT system has cost £10bn so far, The Guardian, 18 September 2013 (https://www.theguardian.com/society/2013/sep/18/nhs-records-system-10bn)

4 Britain’s nuclear clean-up bill soars to £110bn, Daily Telegraph, 23 Jun 2014 (http://www.telegraph.co.uk/finance/newsbysector/energy/10921309/Britains-nuclear-clean-up-bill-soars-to-110bn.html)

5 This figure is based on Office of Budgetary Responsibility figures. For the calculation see : Why I am obsessed by austerity, Simon Wren-Lewis, Mainly Macro (https://mainlymacro.blogspot.co.uk/2013/10/why-i-am-obsessed-by-austerity.html)

6 Levels of UK household debt at record high, says think tank, The Independent, 2015 (http://www.independent.co.uk/news/uk/home-news/levels-of-uk-household-debt-at-record-high-says-think-tank-10295579.html)

7 Taxpayer support for UK banks, National Audit Office (https://www.nao.org.uk/highlights/taxpayer-support-for-uk-banks-faqs/)

8 In search of ‘intergenerational cultures of worklessness’: Hunting the Yeti and shooting zombies, Robert Macdonald et al, Critical Social Policy 34(2), 2013 (http://journals.sagepub.com/doi/pdf/10.1177/0261018313501825)

9 Benefits in Britain: separating the facts from the fiction, The Guardian, 6 April 2013 (https://www.theguardian.com/politics/2013/apr/06/welfare-britain-facts-myths)

10 Disability benefit tests have doubled in cost, says NAO, BBC, 8 January 2016 (http://www.bbc.co.uk/news/uk-35256386)

11 Thousands have died soon after being found ‘fit to work’ by the DWP’s benefit tests, The Independent, 27 August 2015 (http://www.independent.co.uk/news/uk/politics/over-4000-people-have-died-soon-after-being-found-fit-to-work-by-the-dwp-s-benefit-tests-10474474.html)

12  One in five benefit-related deaths involved sanctions, admits DWP, Disability News Service, 15 May 2015 (http://www.disabilitynewsservice.com/one-in-five-benefit-related-deaths-involved-sanctions-admits-dwp/)



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