The current welfare system: a failure of employment, a failure of wellbeing

I’ve just been reading a Master’s thesis based around surveying and interviewing people who’ve recently come off benefits, and its conclusions are pretty bleak.

It shows that, even on its own merits, the government’s much-touted drive to get people off benefits is a failure, as the majority of people who do so don’t end up in full-time work. More importantly, the obsession with getting people into work – ignoring how bad that work might be, the damage done by a punitive welfare system, and the need to support everyone, in paid work or not – means that people’s interests aren’t actually at the heart of the process.

The situation is so ludicrous that one of the people interviewed was recommended for a bee-keeping position despite being more than eight months pregnant. In the words of the thesis’s author, VUW student Alicia Sudden, “wellbeing is being left out of the current welfare system”.

What Sudden did in her Master of Development Studies thesis, titled ‘Putting wellbeing back into welfare: Exploring social development in Aotearoa New Zealand from beneficiaries’ perspectives’, was to survey 234 people about what has happened to them since they came off the benefit, and do detailed follow-up interviews with six of them. This shows what has actually happened to their lives – something the current government doesn’t monitor.

As Sudden says, “These individuals are claimed to be markers of a successful system; however, the current lack of follow-up leaves this assumption unsubstantiated.”

For a start, the interview subjects report enormous stigma around being on a benefit, thanks to the repeated message that requiring the benefit is due to laziness and choice. Yet most of them had gone onto the benefit to have or look after a child or for health reasons. Most had been on the benefit for less than two years.

Sudden also challenges the idea that there is something wrong with depending on the state, noting the argument that “all citizens rely on the state in some way, whether it be for access to water, roadways or other taken-for-granted parts of modern life. Therefore in a moral sense there is nothing wrong with being reliant on the state.”

Indeed, as one of her interviewees, Rebecca, pointed out, we might all need the safety net to be there at some point:

I realised being home and being on the benefit or being really poor and not having support really for all of us are potentially only a few steps away if you happen to get into the wrong course in life… I worked very hard through my life not to ever be in a difficult position, but it still happened…You think you’re safe, but you might not be depending on what happens in life. And then the [2011 Christchurch] earthquakes… we realised you think you are really safe and stable but things can change, and then they all mount up and all of a sudden you are in this really vulnerable place.

Yet as the thesis points out, New Zealand has an increasingly punitive welfare system based around the idea that the main way to improve people’s lives is to punish them until they do what the state wants. “While assistance with benefit-to work transitions has long been one of the primary functions of the welfare system, this is no longer done through training or upskilling. Instead, transitions to work are currently pursued through punitive measures including sanctions, surveillance and increased obligations.”

In addition, life on the benefit can be miserable – over 80% of respondents said they were dissatisfied with their situation while on it. The basic unemployment benefit is just $210 a week – barely enough to survive on, let alone lead a decent life. People’s case managers constantly shift, making it difficult and stressful to deal with WINZ, and one respondent said of WINZ reception staff: “I have never met ruder people in my life.” The paperwork required for the benefit was described by one respondent, Rebecca, as “exhausting” and “very confusing”.

Despite all this, what got them off benefit was not generally the unpleasantness but “their own desire and/or as a way to improve wellbeing for themselves and their family”. Sudden’s findings suggest that “the current financial hardship forced on benefit recipients … only works to make the period of time on the benefit more difficult”.

Sudden found the low wellbeing of her research participants, during their time on the benefit, to be “incredibly disconcerting”. She adds: “It is incredibly troubling that the mechanism which theoretically provides an economic safety net for New Zealand citizens is not only failing to support them, but could even be attempting to not catch those in need in order to pursue shallow indicators of fiscal savings.”

What’s more, the efforts to get people back into work aren’t even working very well. Sudden’s survey (admittedly not a statistically complete one, but in line with other research) shows that, after coming off a benefit, just 37% of her respondents were in solid, full-time work, and 17% studying.  22% were in the growing world of precarious work – part-time, casual, shifting jobs with no guarantee of hours, pay or stability. 21% were back on benefits, and the remainder had no formal income source.

As Sudden notes, “This result significantly calls into question the use of off-the-benefit figures as indicators of successful off-the-benefit transitions [and] highlight that off-the-benefit figures are hiding the longer term costs to the welfare system of those who go back on the benefit.”

This follows earlier research showing, for instance, that only 29% of all those who transitioned from the benefit into work in 2001-02 had remained employed and off the benefit for a full two years.

As Sudden says, “Based on the data from survey respondents, which align with other New Zealand literature, it is clear that off-the-benefit figures do not correlate with benefit-to-work figures. This in itself breaks down the primary measure of success of welfare used by the current government.”

These findings, though worrying, aren’t surprising. We don’t live in a perfect world where people can just waltz into jobs. Many people have poor health, caring responsibilities and low skill levels, and are competing with hundreds of other people for every job. As Sudden notes,  “[interviewees] Rebecca, Sarah, and Nicole all said the jobs they applied for had 100s of applicants, making their search for work extremely difficult.”

Sometimes the jobs suggested are farcical. As mentioned above, at one point Stephanie was told by WINZ she should apply for a bee-keeping position when she was eight and a half months pregnant.

Even if you get a job, life can be unpleasant, especially for those on 90-day trial periods. Stephanie’s experience was especially gruelling:

I begged for six months for the job… when I did finally get the job, I had to work split shifts so that I could fit around everyone else… So at the start they had me sign on to the WINZ scheme that subsidises wages… It was supposed to be permanent. So I was thinking, ‘yay I don’t have to move! Yay cheap rent’. But that didn’t turn out. Two weeks before the end of the three months, they started making excuses as to why I shouldn’t stay – that I wasn’t up to scratch because I didn’t meet the standard that someone who had worked there for 12 years had, after two and a half months. They’ve written me a  reference that my customer service skills and my knowledge of the job were 110 percent sort of thing, but I think it was all just a bit of a scam on their part. And WINZ knows about them and they are continuing to do it.

She adds: “I loved that job, I love working in customer service… I suffer from depression anyway, but losing my job the way I did and a few other circumstances, it’s the worst patch I’ve ever gone through.”

Unsurprisingly, those in casual employment had a high rate of dissatisfaction, at 37.5%. Research cited by Sudden shows that, contrary to the idea that every job is a good job, being in low-paid precarious work can be extremely bad for your health.

Nor is the welfare system adapted to this new world of precarious work. Rebecca noted:

… I had a debt [to WINZ] because it was so hard and confusing to keep track of what I’d earnt. And, just the way the system worked, I wouldn’t know exactly how much I would be earning. They want you to estimate what you think you will earn per week. But that was impossible for me to do because of the nature of what I was doing. And I think that kind of casual work is so common now, and I have this really strong feeling that the benefit wasn’t keeping up with the reality of how most people in lower incomes work, which is casually, and often don’t know from week to week how much they are going to earn next week.

This shows, Sudden argues, that the New Zealand labour market “can no longer be assumed to provide the stability or financial support needed by individuals and families, or sufficient opportunities for employment”.

Finding employment was, Sudden accepts, “in many ways a positive factor in their [respondents’] lives. However, there was also high rates of financial hardship and insecurity that had adverse impacts on wellbeing. This is particularly problematic given that employment is touted as the only life course benefit recipients … should take.… Between the harsh reality of the current labour market and the employment-oriented residual welfare system, the wellbeing of citizens appears to be increasingly left out of social policies.”

This grated with Sudden’s respondents, one of whom, Nicole, drew a contrast with the welfare state the current prime minister grew up with:

It is really hard to sit back and see our government, unfortunately, not actually be there for Kiwi families… There are some things I actually do agree with John Key. But the majority, I think – where the fuck have you come from? His mother was a sole parent, and he talks about how he has turned out fine, but his mother got all the benefits, which were a lot better than what even I got as a teenager… That’s how his mother survived, being on the benefit and having all the rights in the world. The same as Paula Bennett. And now they are cutting all those things off from us.

Through its sanctions and punishments, and its failure to support people’s wellbeing while on benefit or give them proper training to get into work, the welfare system is failing people, Sudden concludes. “Rather than an entity of the state that aims to prevent poverty and progress social development, the welfare system itself is enabling poverty and making positive individual development and wellbeing increasingly difficult to obtain. The burden of support left by the welfare system is instead passed on to individuals, their families, private organisations and NGOs, and the increasingly harsh and unaccommodating labour market.”

Sudden calls for a welfare system – a wellbeing system, perhaps we should say – that treat its users with dignity. “Such a system would be able to provide a supportive space that aided individual’s employment or training aspirations, rather than contributing to the downward spiral of poverty.”

The system needs to be less punitive and “more people focused or more focused on building relationships”. She suggests ensuring that people have one WINZ case manager consistently, and that more be done to ease benefit-to-work transitions, especially for the growing number of people in precarious work.

Whatever happens – and those reforms and more are undoubtedly needed to the system – I hope Sudden’s thesis gets widely read. It documents one of the most worrying parts of New Zealand society: the treatment of beneficiaries, both rhetorically and in their day to day dealings with WINZ. They deserve better, and we all deserve a system that really prioritises our wellbeing.