Seven Days

(Just for a giggle, the numbers in the excerpt are hyperlinks to take you straight to the relevant footnote, like wot Wiki does.)

From the BBC:

Jobseekers will to have wait seven days before first claiming Jobseeker's Allowance (1) and may have to sign on every week, under new government plans(2)

Chancellor George Osborne also said those claiming unemployment benefits who did not speak English would have to attend English classes (3).

Jobseekers will also be required to have a CV before claiming benefits.(4)

1) The "seven day wait" is supposed to encourage people who have just lost their jobs to focus on finding a new job before they go and claim benefits instead, which has some superficial appeal until you think about it for a few seconds...

a) How easy or hard it is for somebody to find another job if they are made redundant, their contract comes to an end etc depends entirely on that person. There are some who will be back in work within a couple of days; there are some who will never have paid work again; and everything in between.

b) We can safely assume that those people who know they will have a new job in a few days will indeed focus on getting a new job, so to the extent that they even bother applying for dole money, we might as well make the process as quick and simple as possible, i.e. you turn up with your P45 and give your bank details to waste as little of their time as possible while they do their job applications. For those who will never work again, one week is not going to make any difference to the public finances, but it paying them dole from Day One will soften the blow ever so slightly.

c) It is the marginal cases which we have to worry about, the low-paid, low-skilled, temporary and part-time workers who hover between employment and unemployment. It is clearly better for them to be in work that out of it, so [easing] the transition from dole to paid work and [easing] the transition from paid work to dole are equally important.

d) So let's look at such a marginal person who is on the dole and is offered a three weeks' work on the minimum wage. That's £650 gross (let's ignore Working Tax Credits and PAYE), from which they deduct travel and other costs (call it £5/day) and three-plus-one weeks' dole money = £284, net gain £291, an effective hourly wage of £2.77. If they only stand to lose three weeks' dole money, the net gain is £362, a net hourly wage of £3.45 - so it's not hugely more, but might be enough to tip the decision towards taking the job in enough cases to produce an overall gain.

2) I was at the launch of Malcolm Torry's new book about Citizen's Income yesterday called Money for Everybody (hi to Katie, Dave and Geoff).

a) He gave a quick overview of how the UK's welfare system had developed over the years, and one key point is that of all the bright ideas politicians have come up with over the years, some good some bad, the ones that were adopted (good or bad, mainly bad) were always ones which increased the amount of bureaucracy and the number of civil servants.

(He gave the example of the Pensions Credit, which is savagely reduced if a pensioner has any savings (which in turn are subsidised by being in a tax exempt ISA and subject to a hidden wealth tax called negative interest rates) but then to soften this, there is a parallel Savings Credit to partially reinstate the Guarantee Credit which people lose if they have savings. Absolute madness.)

The bright ideas that were rejected, however good, were the ones which would have reduced bureaucracy and the required number of civil servants.

Ask yourself: does making welfare claimants waste an hour every week instead of every two weeks more likely to get a job? Not really. Does it require a larger number of civil servants? Yes. There's your answer to that.

b) One question put to him was how he saw the transition happening.

I suggested an answer myself; it is simply no big deal. Anybody on the dole (call it IS, PIP, JSA, ESA, whatever) just continues to receive their £71 a week but at the next signing on date, is simply given a PAYE code BR (i.e. no personal allowance) and told to get on with it. If they find work, there is no need to report anything to anybody ever again and they continue to receive their £71 a week - but they have income tax deducted from their whole wage (and NIC from most of it), so they more in tax than everybody else and in the weeks where they earn much more than £200, the tax and NIC withheld is more than £71 and they have effectively paid for their own dole.

There's no need to change anything else at all. Because of the maths, there'd be little incentive for them to claim Working Tax Credits if they work more than 16 or 30 hours etc. So WTC could remain on the statute books for ever, but nobody would ever claim it. Everybody who loses his job or leaves school without immediately starting work could get the same - £71 a week and a BR tax code. It might well be that these people end up a few quid a week better off than people who have been in work throughout, but that can easily be fixed by increasing the personal allowance for income tax and NIC accordingly.

3) This is a splendid idea. I wonder why nobody else had it first. Even better, make people pay a few pounds towards each class (by deducting it from their dole) and make them continue paying until their English is good enough.

4) What's the point of that? The people likely to find work again anyway will either already have a CV or be looking for the type of job where you don't need very much. And a CV is of absolutely no help to the no-hopers.

There's no harm in the people at the Job Centre helping people put a CV together if people ask for help - it certainly helps employers if every CV follows a standard format, which changes over time. I haven't updated my CV for fourteen years and I have no idea what they are supposed to look like nowadays.

But apart from that, making CVs compulsory is just yet another job creation scheme for the civil servants who have to check them, isn't it?