Great Expectations: welfare reform

Great Expectations: welfare reform

Great Expectations: welfare reform

The British government is currently rolling out a welfare reform, called Universal Credit, that looks quite promising. Despite Brexit taking much of the news cycles, the Universal Credit rollout has triggered protests and angry responses. Considering what the reform represents, it really ought to be receiving international, as well as, domestic attention. Universal Credit reform has become a backdrop to a societal battle between those who favor a responsible, independent citizenry and those who desire a paternalistic state with a dependent populace.

For a quick survey of the Universal Credit idea, it is sponsored by the Centre for Social Justice, and is a practical effort to reform the welfare state into a system that rewards work and disincentivizes dependency. Unsurprisingly, though, those of paternalistic inclination have rejected the reforms and launched into fearmongering about the way the reforms will make those on welfare “worse off.” In general, the “worse off” arguments are vague and are mostly related to fears that the phasing out of six different welfare categories will result in a cut in government payout. As Andy Cook of the Centre for Social Justice explained in an article for CapX, these categories must go because they have perversely incentivized not finding work through issuing credits and additional benefits exclusive to the unemployed, thereby making it less gainful to work and more profitable to be classified as out-of-work.

As it remains to be seen whether the discontinuation of the six categories will truly lead to a reduction in payout (update: after the first payout under the new system, there has been no reduction in benefit amounts), the reform naysayers, exemplified by the BBC, have latched onto one specific aspect as problematic: benefits will now be paid directly to the recipient in a monthly lump sum, rather than credited on a weekly basis. The purpose of the timing reform is two-fold: 1) prevent unnecessary government spending and 2) better reflect contemporary working environments.

Under the previous system of weekly payouts, months with five Fridays resulted in additional payments to welfare recipients. While windfalls are enjoyable for the beneficiaries, they place additional strain on the system, and the one of the purposes of the reform is to ensure that social services can budget effectively and predictably. The budgeting aspect is also related to the second prong of the reform. The Centre for Social Justice in their research and studies on unemployment – particularly relating to gaining and then losing work and multigenerational welfare dependency – found that people transitioning from welfare to employment struggled most with budgeting. The explanation provided by the CSJ is that the modern workforce is now largely paid by the month, but the average benefits recipient, accustomed to thinking in terms of small sums arriving weekly, is ill-prepared to stretch a large sum over a longer period of time. Consequently, the scheduling reform is part of an effort to update the welfare system to reflect real world circumstances and work environment.

Nothing in the concrete aspects of the reforms is remotely objectionable. If anything, the Universal Credit reforms are as close to beneficial paternalism as it is possible to come. The reform is an attempt to remove government from people’s lives while maintaining a social safety net. However, the anti-reformers have reshaped the purpose of the adjustments into a narrative about social class and identity – this is different from the US, where efforts at similar reforms have failed because opponents reconstruct the proposals into a race-based narrative. In the naysayers’ version, the reforms are the creation of a supercilious, judgmental pack of middle- and upper-middle class intellectuals and bureaucrats who don’t care about the poor, downtrodden working (though unemployed) class.

The opposing media is currently claiming that it is this type of reform that leads to identity crises and division. In the narrative of the opposition, welfare recipients have a right to the extra £38 – 42 (estimated) paid out when there’s a month with five Fridays; more importantly, these people have a right to lives unburdened by the same responsibilities carried by the rest of society. For the paternalists, to reform the welfare system and bring it into alignment with the lifestyles and expectations of the productive segment of society is equivalent to passing judgement and declaring inadequate those accustomed to the old ways.

One group is viewed and found wanting by another. The underlying theme in the general media coverage is a sequence of, “How could group A (the reformers) launch such a heartless, demeaning attack on group B (welfare recipients)? How will that make them feel better about themselves?” From there it is an easy jump to frenzied, hyperbolic statements along the lines of, “This is what causes identity crises! People feel ignored or looked down upon!” Hence, the title of Andy Cook’s CapX article, “Ignore the hysteria. Universal Credit is working.”

President George W. Bush’s speech writer Michael Gerson coined the famous, or infamous depending on political leanings, phrase, “the soft bigotry of low expectations.” In the original speech, Bush’s presidential candidate nomination acceptance speech, the phrase expressed the idea that simply handing things to people was a form of prejudice because it indicated that they were incapable of earning a respectable place in society. Gerson skillfully underscored, as well, how the prejudice of the givers embeds into the psyches of the takers, who in their turn participate in the situation by meeting their benefactors’ expectations of underperformance. In a “soft bigotry” state, welfare entitlements become a two-way race to the bottom.

Breaking the cycle of dependency is the CSJ’s goal in developing and sponsoring the Universal Credit reform. There is no doubt that the new system will be some difficulties as recipients adjust to it. There will probably be some resentment and hurt feelings as the changes, especially those relating to revocation of specific entitlements, unfold. If using systemic reform to promote responsibility is unkind, then perhaps we have been overly generous. It is a case of needing to raise expectations in order to achieve true kindness.   

Mary Lucia Darst

Mary Lucia Darst
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