Welfare dependency and economic opportunity
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In this paper, the author criticises and evaluates Lawrence Mead's 'Welfare reform and the family', and offers a British perspective on welfare dependency and economic opportunity. The British welfare rolls are not dominated by single parent claimants to the degree they are in the United States, explains the author. It has been the collapse of the job market for semi-skilled and unskilled males which has had the greatest impact, both directly and indirectly, on the composition of those on welfare and the length of time spent on welfare, and thereby on the functioning of families. And once on the rolls for what appears like an indefinite period, there are changes in attitude and behaviour for a significant number of poor people of working age. The perceived near irrelevance of marriage for many poorer people has been reinforced by tax and welfare systems giving privileges to single parent status. The author argues that while it is crucial to develop still further the 'help and hassle' strategy which underpins proactive welfare, this approach alone will not see significant reductions in unemployment in those areas suffering a major job deficit. The demand as well as the supply sides of labour require attention.
In the United Kingdom the sharp shrinkage of the job market for semi-skilled and unskilled workers has been the catalyst for the rising welfare rolls. And once on the rolls for what appears like an indefinite period there are changes in attitude and behaviour for a significant number of poor people of working age.(1) Frank Field responds to Lawrence Mead.
The ready availability of welfare, argues Charles Murray (1994), corrupts the populace and accounts for the inevitable surge in the numbers on benefit. Lawrence Mead believes that some families have now become so dysfunctional that they are not only unwilling, but also unable to work without being compelled to do so (see elsewhere in this issue of Family Matters). He doesn't explain why such a state of affairs exists.
Mead makes his contribution to the debate in his customarily attractive manner. He distances himself from those conservatives who view the decline in family norms as a consequence of the temptations presented by social security. He writes, 'to directly strengthen the family may be beyond the reach of government', but he quickly cheers himself up (and no doubt his readers) by adding shortly afterwards: 'If there is any way for government to strengthen the family in America, it will probably emerge from current efforts to enforce work among welfare recipients.' Reforms based on enticing the poor to work have had little success. Hence America 'has lately taken more direct steps to move the poor into jobs'.
I too wish to argue for the development of a more proactive welfare whereby such payments are made much more conditional on seeking jobs. (Field and Owen (1994) give an overall view of how this debate has moved cyclically during the present century.) The composition of the welfare rolls in Britain is radically different from America. The British rolls are not dominated by single-parent claimants to the degree they are in the States. It has been the collapse of manufacturing employment which has transformed the composition of Britain's welfare rolls. Welfare changed from being primarily concerned with retired claimants to a system dealing with people of working age. It has been the collapse of the job market for semi-skilled and unskilled males which has had the greatest impact, both directly and indirectly, on the composition of those on welfare and the length of time spent on welfare, and thereby on the functioning of families.
Unemployment and the welfare rolls
In the early post-war period the welfare rolls (2) were composed largely of claimants who were retired. This dominance of aged pensioners was such that their numbers rarely fell below 70 per cent of claimants. This position held right up to 1970, and even then aged pensioners remained in a clear majority until 1980. The fall in the proportion of aged pensioners was not brought about by fewer pensioners claiming; in fact the opposite has occurred, with numbers of aged pensioners on welfare rising almost threefold. Rather, it was the impact of two major recessions in Britain which revolutionised the composition of the welfare rolls.
The first of the two major post-war recessions, starting in 1980, saw the number of unemployed on welfare rise from less than 20 per cent of the total to over 40 per cent in the space of three years. By 1983, for the first time ever during the post-war period, there were more unemployed claiming benefit than there were aged pensioner claimants. That position was further reinforced by the recession that began in the early 1990s.
The severity of these recessions is seen in the data on the numbers in work in Great Britain. The size of the labour force rose in most years in post-war Britain. When earlier post-war recessions occurred, the fall in employment rarely amounted to more than half a million, or 1 in 50 of the total number of jobs. Moreover, a complete recovery was recorded within the space of two or three years. The recessions of the early 1980s and 1990s were of a quite different order. Within three years after 1980, 1.5 million jobs were lost. Almost 2 million jobs were lost in the recession beginning in 1990 and the total number of jobs still had not reached the 1990 level eight years later.
Loss of male jobs
These two recessions have had a lasting impact on the employment levels of male workers. While the total number of jobs in the economy has risen overall by a little over 2 million since 1979, the number of male jobs has fallen over the same period by half a million. While the number of women in work has risen by 2.5 million, this growth in the female labour force has not been uniform throughout the country. In some inner city areas the number of women workers has fallen, although by far less than the dramatic collapse in the number of males in work in the same areas. The loss of male jobs has been particularly noticeable in the trades offering semi-skilled and unskilled workers job opportunities.
The constituency of Birkenhead which I represent in Parliament illustrates how growing national prosperity accompanied by a buoyant national labour market conceals considerable job deficits in some local labour markets. That Birkenhead is typical of inner-city areas in Britain can be seen from a recent study by the Joseph Rowntree Foundation (Turok and Edge 1999). In 1979 there were 20,900 men working full-time in Birkenhead, as well as 2400 men in part-time employment. By 1997 the number of men in full-time work had dropped to 12,500 and the number of male part-time workers had also fallen, to 2100.
In case anyone sees these data as supporting the Murray thesis - welfare availability tempting people onto benefit - these years were marked by the closure of much of the heavy manufacturing base in Birkenhead, including the shipyard and the steelmill. The number of women in full-time work in the constituency stood at 7700 in June 1978 rising to 11,300 three years later. By September 1997 the number of women in full-time work had fallen to 8,800. Similarly the number in part-time work in the constituency, which had stood at 12,300 in 1978, had fallen to 9100 twenty years later.
I therefore disagree with what one commentator has billed as Mead's 'most striking argument', namely, that the availability of jobs is not a technical issue to be resolved by examining the appropriate data. Jobs are there, but the long term workless poor, while 'dutiful', are 'defeated' (Deacon 1997). Proactive welfare is relevant for the whole country, for even in those areas registering a major jobs deficit some jobs still become available. But proactive welfare by itself is not adequate in those areas where the job cull has been massive. Here workers have every reason to feel defeated.
Impact on behaviour
In the years following the 1980 recession economists began talking of hysteresis. By this they meant that the recession had been so severe, and had so enfeebled some local economies, that the market could not engender its own recovery. But the severity of the recession not only affected how the local economy worked. It also had a similarly devastating impact on the behaviour of many people. It was the recession which pushed people onto the welfare rolls, and thereby changed the behaviour of some claimants. It was not that such behavioural changes resulted in welfare claims.
How was behaviour affected? Hysteresis on individuals and families resulted in the breakdown for many of the habit of work. It's as simple as that. The norm in the town - where young males smartly moved from school into work - was destroyed. Worklessness becomes the norm in some tightly defined areas. The hopelessness of being part of a huge stagnant pool of unemployed can defeat all but the most determined of individuals. And this hopelessness was not assuaged by drugs.
The marital status of males was damaged. How can you start to plan a life together when all that is brought financially to the contract is a meagre welfare cheque? So marriage became an endangered species in the poorest areas. A new norm was quickly established. In one of the poorest parishes in Birkenhead a yearly total of 170 or so funerals was matched by as few as three marriages. It was not only young workers who were affected, although as a group they bore the brunt of the jobs collapse. Older redundant male workers faced similar difficulties in finding a job in a far tighter labour market. But successive Tory governments, wishing to see the unemployment count fall as elections approached, were active in persuading employment staff to transfer claimants to Incapacity Benefit, or at least to register them as sick.
The collapse in the job market also impacted on the numbers of young single parents. Why marry a fellow - supposing an offer is there - when a benefit claim as a single parent results in more money proportionately than by marrying, particularly if the boyfriend also claims his welfare cheque, together with housing benefit, and sub-lets his flat while living with his girlfriend? More money to be sure, but hardly a more stable environment for children to grow up in.
Here is just one example of benefit rules affecting behaviour once people are on the rolls. But it wasn't simply the collapse of suitable jobs for men with few skills which led to fewer men being able fulfil their financial responsibilities as fathers. The self-same changes to the local labour market operated against women as well. Over a 20-year period the number of full time and part-time jobs for women workers in Birkenhead fell by 2500 and 2200 respectively. Fewer full-time job opportunities now exist for young women before marriage, and there are also fewer part-time job opportunities for mothers to combine with family responsibilities should a marriage have taken place. And news on this front travels fast along the grapevine from older sisters and friends finding difficulty in supplementing their family income with part-time work. Faced with greater difficulty in getting a full time job, and with far fewer young men able to accept the financial responsibility of fatherhood, some young women opt rationally for lone parenthood, usually (but not invariably) soon after they have left school. (3)
The case for proactive welfare
To explain that the main cause of welfare's transformation lies in the economy, is not to argue for welfare's status quo. A welfare operation designed to look after aged pensioners is clearly unsuitable once that operation is geared to a very large majority of claimants of working age - hence the move in Great Britain to make welfare proactive. New Deal, introduced in Britain in 1998, is the most far-reaching of the welfare changes introduced so far by the Blair Government. All unemployed claimants without family responsibilities who are below the age of 25 and have been unemployed for ten months have to accept one of a range of full-time options, including subsidised work, or lose benefit. This scheme is being extended to other claimants without family responsibilities.
The case for national proactive welfare schemes is twofold. The first is that, as has been already noted, the delivery of welfare was originally geared almost exclusively towards aged pensioners, and these are no longer the majority of claimants. No-one seeking to set up welfare in Britain today would design the one that was put in place in the early post-war years which were characterised by full employment. With a tighter job market, and fewer jobs for life, an active employment service helping claimants into work is required.
But second, such a service was also necessary to counter the feelings among groups of claimants that looking for work is hopeless, or is not an attractive enough proposition. That was a view which took root after the first major recession, and was reinforced by the second. While proactive welfare is most relevant in areas registering high employment, it also has a role in areas still characterised by high unemployment. If I can cite the example of Birkenhead again, the Wirral Employment Service, whose jurisdiction covers Birkenhead and the surrounding region, helped 15,105 people into work in 1995 - 96 - a time when the local labour market was still fragile following severe recession.
By concerning itself with the skill levels and attitudes of claimants, proactive welfare can play a part in improving the quality of labour on offer; and the availability of such labour may itself help stimulate job creation by employers who might not otherwise consider such a development. But while it is crucial to develop still further this 'help and hassle' strategy which underpins proactive welfare, this approach alone will not see significant reductions in unemployment in those areas suffering a major job deficit. In areas of persistently high unemployment, New Deal Mark 2 will need to consider much more direct means of influencing the demand for labour, as well as keeping a continual interest on the supply side issues.
New Deal in Britain extends to single parents on benefit. The New Deal for Lone Parents targets single parents who have been on Income Support for more than 8 weeks, and whose youngest child is in full time schooling, with a package of job search, training and after-school care to help them into work. But the crucial difference between this part of the New Deal and those applying to all other able bodied workers, is that the scheme is voluntary. Lone parents are invited to the employment office for an interview, but there is no sanction on those who refuse this invitation, let alone anything more demanding.
This part of the New Deal was implemented nationally at the end of October 1998. By the end of June 1999, 72,190 lone parents had attended an interview; of these, 6450 had left the scheme and found jobs. (4) The scheme is based on self-selection, and while some single parents have been helped into work, the likelihood is that many of these would have made that transition anyway. (5)
An assumption behind the view of many of those advocating more conditional welfare for single mothers in this country, as well as those blazing the trail in America, is that single mothers working leads to better functioning families. That may be so for single mothers with older children. In Britain single mothers have a right to draw benefit until their youngest child has reached age 16. At some stage this rule will be reviewed. While policies helping those single mothers with younger children move into work when they wish to do so commands considerable but not universal support in this country, an approach which made the drawing of benefit conditional on seeking work, either after two years on benefit, or once children began school, would not win the support of the House of Commons, and would likely be strongly opposed by a majority of voters.
Given this electoral bulwark against change, it is a pity the Government hasn't experimented more on ways of encouraging single parents back to work. It has so far cost £5611 for each single parent moving back into work on the New Deal. Wouldn't it have been a worthwhile pilot to offer in one or two local areas, say, £2000 to those single parents able to get back to work for at least a year? Here again is a difference with Mead. Some incentives are important in stimulating good behaviour. The Government's obsession on whether the poor's marginal tax rate is 70 per cent instead of 90 per cent is relevant on grounds of fairness, but not in making an effective contribution in moving people back to work.
It is through a policy of trying to raise skills of pupils in schools, of continuing that process for people once successfully placed in work, or seeking work, together with the development of proactive welfare policies to support people seeking work, that Government policy may help engender conditions conducive to stable families in areas of greatest poverty. But the hysteresis effect on people's behaviour following two major post-war recessions, and the changing views of what constitutes normal behaviour, is most clearly seen in inner city areas where a cumulative process of disintegration appears to be at work. This should caution against claiming too much for what Government policy may achieve. Destruction is far, far easier than reconstruction. Stable families require an economy producing family wages and a surrounding culture which recognises and encourages the concept.
That Britain, like America, is reforming much of its welfare so that payments are conditional on actively seeking work, should not disguise the significant differences between the two countries. Welfare in America is primarily concerned with payments for single mothers. This is not the case in Britain, where unemployed males and disabled workers are also major welfare beneficiaries. But these differences should not detract from a common concern about the number of children being raised in fluid single-parent families (that is, families where there are a series of boyfriends resulting in a number of children by different fathers).
Lawrence Mead sees the shoehorning of welfare claimants into work as possibly providing the most effective way of strengthening US families. I have argued that it has been the collapse of unskilled jobs, concentrated as these losses have been in inner city areas, which has intensified the impact on society of changing views about marriage. The perceived near irrelevance of marriage for many poorer people has been reinforced by tax and welfare systems giving privileges to single-parent status. Getting claimants in inner city areas back to work is highly desirable on its own grounds, and will only be achieved by operating on both the demand as well as the supply sides of labour.
But, as Lawrence Mead himself observes: 'To directly strengthen the family may be beyond the reach of government', at least for governments understandably concerned only with the short-term, and where the wish to find that ever elusive panacea is as strong as ever.
1 This is not to argue that the existence of welfare doesn't impact on behaviour and thereby the character of claimants (see Field 1995, 1996).
2 Welfare is here used as a shorthand to cover the basic means tested income for those out of work. It currently sails under the banner of Income Support.
3 This trend has been reinforced by tax and benefit changes which give a privileged position to the single parent over the married couple. It is in this way that the welfare system sends out strong messages about behavious; and the populace, being rational, pick up the vibes quickly.
4 The number of single parents on benefit has begun to fall, but this fall was only recorded after the number of jobs in the economy began to increase. The movement out of the current recession was first apparent in Scotland, and it is not without significance that the number of single parents claiming benefit began to fall first in this area.
5 The scheme is nevertheless important in changing the ethos of welfare from one of passive receipt to one of greater reciprocity of duties; of the state to provide benefit and the claimant to be an active working citizen as soon as that becomes a possibility.
- Deacon, A. (ed) (1997), From Welfare to Work: Lessons from America, Institute of Economic Affairs, London.
- Field, F. (1995), Making Welfare Work, Institute of Community Studies, London.
- Field, F. (1996), How to Pay for the Future,Institute of Community Studies, London.
- Field, F. & Owen, M. (1994), Beyond Punishment, Institute of Community Studies, London.
- Murray, C. (1994, 2nd edn), Losing Ground: American Social Policy 1950 - 1980, Basic Books, New York.
- Turok, I. & Edge, N. (1999), The Jobs Gap in Britain's Cities, Polity Press, Cambridge.
Frank Field is a Labour Member of Parliament in Britain. In the House of Commons he was the former front bench spokesman on education and social security, former Chair of the Social Security Select Committee and, from 1997 98, Minister for Welfare Reform, Department of Social Security. Frank Field has published extensively, some of his more recent titles being: Reforming Welfare (Social Market Foundation) in 1997; and Reflections on Welfare Reform (Social Market Foundation) in 1998. He has been awarded an Honorary Doctorate of Law from Warwick University, and a Doctorate of Science from Southampton University.