Want to protect the poor? Then give them jobs

Most people who are 'forced’ into minimum wage jobs move quite quickly up the earnings ladder, says Janet Daley

By Janet Daley
The London Daily Telegraph
http://www.telegraph.co.uk/comment/
Published: 9:00PM BST 26 Jun 2010


At last, we are having the right argument for our time. Virtually everybody who is in touch with political reality now accepts that the old contest – socialism vs capitalism – is over. We all believe, with greater or lesser degrees of enthusiasm, in free-market economics. So the real source of contention that remains is the size and role of the state.

Anyone who thinks that this is a puny arena – that the boundaries of debate have shrunk to a less inspirational, purely managerial scale – is mistaken. The passion with which those on the Left are now defending their new turf should make it clear: this fight will be to the death because the power of government to control social and economic outcomes is seen by them as the last plausible incarnation of their moral world-view. The current arguments about welfare reform which the Government has robustly initiated are going to bring this abstract confrontation into the day-to-day experience of national life.

Now it is perfectly understandable that those who have a vested interest in state power – public sector trade union leaders, for example – should be prepared to risk everything to preserve it, but have the more thoughtful Left-liberal proponents really thought this through? Are they actually prepared to go down fighting for the idea that the state is the source of social virtue and must be the answer to all of our civic problems?

If we learnt anything from the terrible ideological crimes of the 20th century, it was that over-powerful states were dangerous: that even if they did not commit murder or enslave their own populations, their good intentions ended up producing perverse effects simply through the gross, insensitive interventions of central bureaucracy which could take no account of individual needs. Can anyone still believe that the largely catastrophic consequences of Big State solutions to poverty, to housing shortages, to unemployment, to educational disadvantage, have been pure coincidence?

The effect of government housing programmes is a perfect case. Council housing – with its class‑ghetto implications – always seemed to me to be a pernicious social phenomenon, reinforcing social divisions and encouraging passivity. Not only were people told where they would live, but they were often forbidden to make changes to – or take responsibility for – their own homes. But now, in areas where unemployment has become endemic, council estates have become social death-traps.

As Iain Duncan Smith points out in our interview with him today, the security of tenure of the council tenant means that he dare not risk moving to another area of the country – or even to the far side of his own city – to seek employment for fear of losing his housing rights. So we have large swaths of unemployed people tied like serfs to the land, in workless communities, doomed to a hopeless future in which no one in their everyday acquaintance is in paid employment.

This is a grotesque state of affairs that was born out of good intentions, but by now it should be clear why it has come to this pass: when the state creates a mass, collectivist solution to a problem, it ends up treating people as categories (“the poor”, “the deprived”, “the homeless”) rather than as individuals who are ultimately going to have to determine their own fate.

Mr Duncan Smith speaks of introducing mechanisms for “portability” and “flexibility” in housing provision, which is another way of saying that we must create routes for people to escape from the monolithic state solution in which they are imprisoned.

The council estate is a way of encasing people in a bricks-and-mortar embodiment of government policy, but benefit dependency is a more all-encompassing form of incarceration from which it can be virtually impossible to break free. The scandal of welfare dependency as a way of life is now so well-established that there is no need to rehearse its depressing facts again.

But we must be clear that we have not got to where we are by accident. It is the basic premise of Big State thinking that has produced the monstrous edifice that we know as the benefits trap: the idea that “the poor” are a fixed and immutable section of society who must be “protected”. Sadly, what “protecting the poor” generally amounts to in practice is “protecting poverty” – which is to say, preserving it. Welfare dependency creates huge disincentives to entering employment because few jobs at entry level can offer a competitive package of payments and support equivalent to the benefits system.

At this point the Big State camp will shriek: “Why should people be forced into demeaning, low-paid jobs?” Answer: because most of them will not stay on such low pay for long. All the statistical evidence from the US welfare-reform programmes shows that people who are “forced” into minimum wage jobs initially, move up the earnings ladder quite quickly into better-paid employment, with their places at the bottom being filled by newer recruits to the workforce. Getting a job at almost any rate of pay is, indeed, the best and most lasting route out of poverty.

There may always be a cohort of people in low-paid work, but the important thing is that they not be the same people. Poverty should always be regarded as temporary: the goal should be to facilitate people moving out of it. At the moment, our tax and benefits system penalises people both for taking a job in the first place and then for climbing up the income ladder. This is crazy – and it is a direct consequence of the tendency of government programmes to regard personal initiative and effort as a bureaucratic inconvenience.

The tragic inevitability of government intervention is that when you create a permanent agency to deal with a problem it has an inherent tendency to make the problem itself permanent. This is not only for self-serving reasons – to justify its own continued existence – but because it prefers to deal in fixed entities such as poverty, deprivation, or educational inequality, rather than to view the infinite range of human possibilities and personal circumstances as a dynamic, ever-changing spectrum in which individual vagaries matter more than any total result.

Labour’s “target culture”, which is now being busily disowned by absolutely everybody, even its own architects, was the final apotheosis of Big State folly. But the idea that every social outcome and public-service goal could be quantified in objective terms was really just the logical conclusion of a philosophy of government that no one in his right mind should adhere to any longer.