JSA + Expenses = Below Minimum Wage?

Friday, February 17th, 2012 - DWP, economics, Employment, Employment Law, Internship

JSA + Expenses

= Below Minimum Wage?


The governments welfare to work programme seems like a wise idea: get unemployed people back to work, by putting them in work and hence giving them the idea of doing work. After a short while, they move on to doing other better paid work.

But yesterday leading high street retailler Tesco, who had agreed to be part of the scheme on launch, suffered the Social Media anger of thousands after they – in error, apparently – advertised such a post in East Anglia. USDAW, the shop workers union have asked for a discussion.

While JSA + Expenses seems like a good scheme, in reality is it creating below minimum wage jobs?

In general, I am a supporter of the Governments welfare to work programme. We want people back in work. But in this current employment market, when over 1million under 24’s are unemployed, can we afford as a society the unemployed taking jobs away from the whole market place, let alone employers now finding a way to keep costs down?

Iain Duncan-Smith has spent his time after leading the Conservative party in this whole area. The programme is thought through with some good ground work knowledge of what works, as well as what the people affected want. The problem however, as Frank Field found out in the early days of the new Blair regime in 1997, is that implementing grand schemes which seemed well detailled in opposition into a civil service infra structure, and now getting embroiled in the political implications, is impossible.

One of the examples on launch of JSA + expenses was community work: fixing fences, cleaning public spaces, painting things. There are at least 100+ jobs that such a scheme could address on my 1.5mile walk to the shops, yet have they been addressed yet? Err, no! Secondly, my concern with such community schemes was what additional skills did they give the job seeker when they then go active and real job seeking? Saying that you painted feces for four weeks sounds like ex-convict type work, and what skills/markets does it allow you to progress into? Hence seemed personally like a dead end opportunity.

So the involvement of real commercial organisations gave the scheme two things: credibility, and real skills for those job seekers. Great!

Except, I can see a common problem between JSA + expenses to the current trend around Internships. There are no timescales around the period of work, and no ethics around the payments. The result is that, like internships, JSA+expenses ends up as below minimum wage employment. Now that’s not good for anyone: the job seeker, the employer, the government or society.

To my mind, both JSA+expenses and internships need some better detailled thought, and in the case of internships some regulation. There needs to be a timescale around such positions: 12weeks maximum seems reasonable before an employer makes a decision on employ/not on their “stated before you start” conditions. Secondly, to stop continual rotating, the number of jobs offer by a commercial sector employer needs limiting. Government provides financail support for apprenticeships and training places, but these are limited to a percentage of employees and timescaled on how long they are supported for.

There is nothing wrong with the principle of JSA+expenses, but it needs more detail in implementation Mr Duncan-Smith. In summary, not back to the drawing board, but you need to get into the detail – oh, and the politics.

Good Luck!

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