Saturday, 14 June 2014

Towards A Sustainable Welfare State: 5 Points To Ponder

I'm basically conservative. I believe in a prohibitive military, a common sense government and that there are social programs enacted in the last half century that work, but there are far too many costing way too much that don't. And I believe in the rule of law and order and free fair and open market capitalism.* So whenever I see anything to do with the idea of "Mincome" or similar schemes popping up on the internet, I dismiss them as socialist fantasy because they're unsustainable right off the bat. We do, however, need to fix the welfare state and consider how to make it work as intended.

1. Who's gonna pay for it?


At the moment welfare is divided among HMRC (tax credits), DWP (Dept. of Work and Pensions), and local borough councils (council tax benefit, housing benefit). Who would administer the Mincome/citizens' income, etc.? The lives of our citizens are much too complex to be sorted with a single income capped at a particular level.

Incentivising productivity


While panem et circenses has always been a popular way to keep populations quiescent, it's never done much to stimulate production. We have dole cheats NOW, and generations of families whose members have never worked.** So much for the incentive to work.

I personally know many people who refuse to get a job unless it pays well. This is actually reasonable since it makes more sense to stay on the dole and hold out for a job that pays a living wage than to take a low-paying job for the sake of having one and suffer the consequences of employers passing industrious people over for experienced or recently-trained personnel. I myself have experienced that discrimination from employers after working as a waitress. "You're a waitress," they told me. "Where's the office experience?"

"I didn't want to sit on the dole doing nothing so I took the first job I could get to keep myself afloat."

He wasn't impressed. I got the job I have now because a friend introduced me to a temp agency in London, which got me the experience I needed. Mincome and variants thereof work on ideals, not experience. When they do point to experience they talk of savings from people not having accidents at work... because they weren't at work.

Administration


As I pointed out before the first issue that will come up as we attempt to implement this is who will actually dish it out. DWP is the most likely source, but how would they do it? Pensions for all at any age? Okay, fine. This will be paid for by National Insurance contributions, which then raises the next question: where is that money going to come from if wages and taxes fall? Income tax doesn't go towards the social security kitty. The different departments gather and disburse tax monies according to their function. We have to understand their functions before we can begin to simplify their practices. The department we decide on to distribute the money must have a reliable revenue stream.

2. Which economic policy principles would underpin this scheme?


I've been bashing free market economics ever since I realised there's no such thing as a free market because the austerity we're suffering now is based on free market ideology. The free market capitalism espoused by the American Republicans and conservatives worldwide relies on the false belief that "the market" is a discrete entity that can make decisions based on the need to maintain the balance between sellers (supply-side) and buyers (demand-side). Take a look around you. Now repeat after me: "Oh, no, it's not."

Now before this turns into a pantomime I should point out that limitations on market freedom include hoarding protected by property laws and IPR, which is subject to increased enforcement. You were saying?

A Citizens Income would significantly reduce poverty and wealth inequality, and it would help ensure that nobody falls into a poverty or unemployment trap. Importantly, the incentive to work would remain, as getting a job would not remove the Citizens Income, but would raise the amount of money coming in to the household. It would also create flexibility for single parent families, carers, disabled people and people wanting to dedicate their time to community or volunteering programmes, as part-time jobs would become a viable means of support.

As a result, the minimum wage could probably be lowered, the tax code could be simplified and the poorest in society would be safe from a lifetime of poverty. - The Pirate Party UK, Moving Toward A Citizens' Income.

Oh, dear Lord, did they really say that? It's the unholy love child of Supply-side economic theory and Socialism, which is why it'll never work. Since the rich are adept at dodging taxes the burden would fall on the shrinking middle class, which already bears the bulk of it. Since Socialism is basically anti-capitalism or pro-state capitalism, it doesn't work. We've already tried and failed to implement policies based on each of these misbegotten theories, neither of which take actual humanity into account. Surely to goodness a collaborative/cooperative system would work better.

3. Sustainability


Anything we do must be sustainable or it's not worth doing. We need to chase tax-dodgers down instead of merely raising taxes. We need to ensure efficiency in our current spending and cut waste. And we need to ensure that anything tax revenues are spent on is necessary and beneficial. The idea that wanting nice things will drive people to work is ludicrous; it's having a work ethic that drives people to work.

Hire Purchase schemes, the Uncanny Valley Puppets and the Singing Citrus promise easy money to people who want expensive things. That they cause problems of their own is not at issue here, the point is, if you can cut repayment rates right down, whether or not you're paying up to ten times what you borrowed is not immediately apparent and doesn't impact too much on your spending power. Alternative income sources must be taken into account. It is short-sighted and foolish to believe in the goodness of human nature; we don't live in an ideal world because of human nature. Consider the impact of selfishness and greed when making policies.

4. Meeting needs


As I mentioned earlier, a one-size-fits-all scheme wouldn't meet everyone's needs. The Pirate Party has expressed some skepticism that Mincome/BIG would actually work in practice, though they think it is a good idea. One of the main reasons I personally object is that it only provides a sum of money to each individual, no matter what. What about housing? Healthcare? Transport? These are the three biggest costs faced by individuals and groups and getting those down would actually solve a lot of our problems. The fact that they differ according to the needs and circumstances of each person is what causes confusion.

Empowerment


I advocate empowerment of disabled people, getting them into integrated work situations and providing them with the tools they need to be able to work. Subsidized work schemes are unsustainable in the long term; anything reliant on government funding may lose that funding if a right-wing party gets in. What they actually need is a profitable business model and empowerment to set up their own businesses that stand or fall on their own ability. Not that I object to giving them a hand with advertising, etc. Working gives one dignity and purpose, so empowerment to gain the skills and assistance to get into employment has got to be at the core of anything we do.

Long-term illness, etc.


Where long-term illness is a problem, this has got to be identified. I oppose giving people more money just because they're more sick. Give it to them if they need more money to meet their needs. The primary aim should be to try to get them back on their feet (metaphorically at least) if possible. If this is not possible, they need help to attain the best possible quality of life. And if they're able to do ANYTHING to take part in community life, encourage them to do so.

Eligibility


I'd be interested to learn whether or not the diaspora — citizens living abroad — would be eligible. Bear in mind that I'm holding my nose as I type this; the very idea of giving a sum of money per week or month to the idle rich, many of whom pay no tax at all, offends me. Why should some greedy bankster or complacent hedge fund manager get Mincome? They don't pay into the system and they don't flippin' need it, so why spend money on admin, etc., to give them money — and take it out of my hide?

5. The role of volunteers and unpaid workers


That people want to volunteer and help out in their communities is unquestionable despite my personal cynicism. This, I believe, should be the basis of any payments to them if they don't have jobs. I'm not talking about some horrible pay-back scheme in which they are humiliated for not having jobs. The idea is to provide people who are not in paid employment with the opportunity to do some good in their communities in ways that don't threaten existing jobs. This would mostly mean caring for the elderly. This would count as work and they should only be obliged to work to the value of the benefits they earn.

Internships


People afraid of working themselves out of the job market in their chosen profession should be enabled to take unpaid internships, working to the value of their benefits for a period of no longer than three months. This should give the employer enough time to decide whether or not they want to hire them. After a limit of three internships has been reached, an assessment should be made to determine why things aren't working out and the person should be made to either go on a training scheme or get a job whether it pays well or not. The idea that we must subsidize people's dreams is offensive to me.

Low incomes


Housing, transport, and other costs are the main reasons cited for not taking jobs under a certain salary threshold. Subsidizing these costs is unsustainable as rent increases mean taking more from the public purse. If there's not enough going in, there won't be enough to provide to low-income households.

The cost of living


The main reason for opposing Mincome, etc., is the ever-increasing cost of living. Getting that down and keeping it down would pretty much solve the problem of feeding and housing everybody, but it would require state intervention on a massive scale, and, dare I say it — Socialism. No, thanks. I have a few ideas:

  • Increasing social housing, compulsory purchase of empty properties and selling them to housing associations, and capping private rents would be a good start. 
  • Abolish prescription charges and patents on medicines. 
  • Provide incentives to explore alternative fuel sources and subsidize engine conversions where necessary. Competition will get fuel prices down.
  • Provide assistance with insulation to keep heating costs down
  • Break up the Big Six energy cartel
  • Provide a cash incentive for long-term unemployed to get work
Well, these are my thoughts... what do you think?


*Adapted from "The Newsroom: Tea Party Taliban."
**That they are not widely recognised as such due to complications in their living situations and circumstances is not the point.

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