Pay the unemployed more
The British government must pay the country’s unemployed more than the derisory 60 pounds a week
By Matt Kennard on Thursday, March 26th, 2009 - 751 words.
I finished a masters in journalism last summer in the US and returned to the UK in the middle of the current economic crisis. I didn’t expect the job market to be good, but I continue to be shocked by the paucity of posts. Finding work in any field seems near impossible, with two million people in Britain unemployed. And this is just the beginning.
The British Chamber of Commerce predicts that things will only get worse, with unemployment rising to 3.2 million by the end of 2010. Last month was one of the worst for job losses in more than a decade, with maybe 100,000 people losing their jobs.
Of these 100,000, singles over 25 will find they can get a not-so-plum £60.50 a week, with those under 25 an even-worse £47.95. Trying to live on £60 a week is hard – it works out at an annual rate of £3,133 – but the argument from the government and rightwing newspapers is that idleness has to be to disincentivised.
This idea doesn’t really hold up at the best of times but this poor law-esque philosophy has even less legitimacy now. The UK simply does not have anywhere near enough jobs – people might be itching to work but simply can’t find any. The TUC recently said that there is a 10:1 ratio for jobseekers to jobs now, while a year ago it was 4:1. On the Isle of Wight there are 3,152 people chasing 52 advertised vacancies, and in Hackney, where I live, there are 37 people claiming benefits for every vacant position. You know things are bad when even the Conservatives, who did so much to help create the tabloid image of the parasitic unemployed, are criticising the Labour government for closing down jobcentres.
But despite their crowing, the Conservatives have failed to go further than cheap political point-scoring. As a palliative for the new army of unemployed, the government has to raise the basic jobseeker’s allowance to a minimum £75 a week. This is still a paltry sum, but an increase is vital to stem the descent into more debt and depression for what could be 5% of the population next year.
It doesn’t seem likely that this extra £15 would encourage people to stay unemployed unnecessarily – the median weekly wage for a man in 2008 was £521. More likely it will make life that bit easier for the newly unemployed, and be a welcome boost for those who have been struggling for a longer period.
Financially, it’s not a massive sting: it would cost the Treasury an extra £20m a week, which, compared with the astronomical bank bailouts, looks like a flea bite. Maybe they could fund it by taking up the old Liberal Democrats’ policy of upping the Thatcher-era top tax rate of 40% to 45%, although at the moment New Labour seem more inclined to tax new immigrants to fill budget shortages, which gives you an indication of their priorities.
Jobseeker’s allowance is calculated annually using the Rossi index, which makes sure it stays in line with prices, but this is based on a Thatcherite base-rate. Think about what £60 a week can get you these days. After spending £30 on food, you have £10 left for transport, £10 for a pay-as-you go mobile, and a final £10 for everything else.
The leader writers of rightwing tabloids would undoubtedly work themselves into paroxysms of outrage if a raise was approved, but let them. A look at how our neighbours in France are treating their unemployed makes this increase seem positively dickensian. The French unemployment benefit pays between 57% and 75% of a jobseeker’s previous salary, with a cap at around £6,000 a month, and to sign on for this all you need to have done is work a couple of months in the last two years. In Scandanavia you get as much as 80% to 90% of prior income when you are laid off. Even the US, which is not renowed for its stellar social safety net, sees that workers who are made redundant receive unemployment insurance based on a percentage of their former quarterly earnings. Britain’s flat £60 a week is a more democratic system, but only works if we raise the rate up to half-way decent levels.
It’s a fact you need more than £60 a week to live an even half-way decent life in the UK, I bet even Norman Tebbitt wouldn’t argue with that. His answer used to be that the scratchers should “get on their bike”, but now we’d just ask politely, “Where to, Norm?”
* This article was originally published at the Guardian’s Commentisfree
Matt Kennard graduated from the Journalism School at Columbia University as a Toni Stabile Investigative scholar in 2008. He has written for the Guardian, Salon and the Chicago Tribune, amongst others. In 2006 he won the Guardian Student Feature Writer of the Year Award.
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