‘Idleness’ and a new approach to employment policy

Abstract

It is 80 years since Beveridge took on what he called the ‘five giants’ of want, disease, ignorance, squalor and idleness. His report has shaped British politics and society ever since its publication. As part of a project to assess where we stand today, Ashwin Kumar and I were commissioned to explore ‘idleness’.1 Is it a problem today? And if so, what should be done about it?

For Beveridge, who was writing after two decades of high unemployment, the problem was one of worklessness and a lack of jobs for male breadwinners. Today our labour market is very different: rates of employment are historically high, many more women are in paid work, but alongside this we have record levels of in-work poverty and endemic labour market inequalities along the lines of gender, ethnicity and disability. The UK is stuck in a low-pay, low-productivity rut, but the political rhetoric on both sides has not caught up.

A key factor underlying our underperforming labour market is power. It's something that unemployed people and low-paid workers are sorely lacking. The balance of power between workers and employers has also shifted decisively towards the latter. People are forced into taking jobs that don't match their skills and needs, trapped by both a lack of progression opportunities within their current workplace, but also a lack of alternative jobs that offer a better future. Employers have no incentive to improve job quality if they know their workers have few alternatives.

The state should play a key role in redressing this power imbalance. Being pro-economy isn't necessarily being pro-business, and government should be backing and investing in the unemployed and low paid, rather than treating them as a problem to be managed. But in our book we show that time and again, in policy areas as diverse as unemployment, childcare, transport, skills and regulation, the state conspires to constrain the labour supply of low-paid workers and reduces their power to reject poor quality work.

Our employment service needs urgent reform. For a long time, it has been unashamedly characterized as a “great big nagging service”,2 enforced through punitive sanctions and designed to make unemployment more uncomfortable than it already is.

Reform of this problematic approach has been needed for a long time. But at this juncture, when the DWP is beginning to think about engaging with people in work (an unprecedented shift made possible through universal credit's merging of in- and out-of-work benefits), policymakers need to recognise that we’ve reached the end of the road.

More of the same: a ‘work first, then work more’ approach, which simply requires workers to take on more work, while at the same time doing nothing about the quality of jobs available, just places more pressure on precarious workers. Employers don't welcome this approach either, voicing concerns about the adverse impact this could have on staff wellbeing and performance. 6

We urgently need a shift to a support-based system that empowers people to access quality opportunities and support genuine prospects for progression. The key objective should not be moving people into any work, but to ensure that, where work is appropriate, people are supported into decent and productive work where their skills and capabilities will be developed and used effectively, and in which they can maximize their potential. This is the human capital approach: helping people to build a satisfying and productive career, not take on any job at any cost.

Part of this means ensuring the employment and skills systems work effectively together. Adult learning participation has fallen off a cliff, almost halving over the past decade.7 Employers are shirking their responsibilities here, however the state also has a role in supporting people to access the training opportunities that could help them to progress. But the proportion of benefit spells including training has plateaued at just over 6 per cent – and only 6 per cent of those starting apprenticeships had been claiming benefits in the six months prior, down from 14 per cent in 2013/14. These are baffling statistics given both systems share a core aim of supporting people to move into and progress in work. However, they further expose the short-sightedness of the ‘work first’ approach: time spent learning and developing new skills is time not spent applying for and being available for work. This is despite international evidence which shows that such human capital development approaches have better long-term employment outcomes.8

It is clear that policymakers must shift their priorities from short-term reductions in the benefits bill to aiming for a world-leading employment and skills service that will meet the needs of the labour market of the future. “But this costs money!”, is often the immediate response to these kinds of suggestions. Indeed, it may well do in the short run, but in the longer run there are higher payoffs for people, businesses and the economy. Policymakers need to wake up to this. Investment in people is both worthwhile and long overdue.

If policymakers are serious about getting us out of this low-pay, low-productivity rut, they need to start backing up these sentiments with real action on the range of policy areas that currently work to undermine, rather than empower, workers, and help them to thrive in the UK labour market.