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Workfare: a pathway to employment, or the exploitation of the jobless?

With new unemployment figures showing that unemployment has risen to 2.62 million (with more than a million young people out of work), there has been more coverage in the media of the government’s work experience scheme for jobseekers, which is being rolled out by the Department of Work and Pensions. The scheme is a form of workfare (which has its origins in the US), and consists of sending jobseekers on an eight-week unpaid work placement, which they must stay on or risk having their benefits cut. The employers involved include supermarkets and retail outlets such as Tesco, Sainsbury’s, Argos and Poundland. The purpose of the scheme is presumably to get the unemployed ready for work by motivating them, building up their skill base and giving them experience which might impress a potential employer.

But will workfare achieve its objective of getting people back into work, or could it actually have the opposite effect? There is no guarantee of a job at the end of each placement, only a job interview, which means that many jobseekers who participate in the scheme will find that a paid job does not materialise at the end of it. When their placement ends, the company will then be able to replace them with another jobseeker who is also unpaid. This raises the possibility that some companies will use the scheme to obtain a pool of unpaid labour, not to find potential employees. This suggests that workfare will not help the unemployed back into work, because many employers will choose to get unpaid jobseekers to work for them instead of creating more paid jobs.

This aspect of the scheme could also threaten the jobs of those who are in work, making the problem of unemployment even worse: when workfare was introduced in New York City in the 1990s, thousands of unionised employees were replaced by jobseekers on workfare. For those workers lucky enough to still have proper jobs, this undermining of unionised labour will also make it more difficult for them to campaign to enhance their pay and conditions. Therefore those who are set to benefit from the scheme are not jobseekers, or people already in work, but the companies who provide the placements. In providing free labour, the DWP is effectively giving them a state subsidy. It should be mentioned that many of them are not hard-pressed small businesses or charities, but large companies who are not short of money. For example, Tesco reported pre-tax profits of £3.54 billion at the end of the previous financial year.

The basic principle behind workfare should also be questioned. If the work involved in workfare placements needs to be done, then the companies involved should be hiring unemployed people at the minimum wage or above to do it. Forcing people to work for their benefits means that they are effectively working for below the minimum wage, which is exploitation.

But it gets worse. Workfare in this country may be in its early days, but if it is expanded, and eventually becomes compulsory for everyone on jobseeker’s allowance, and if the economy continues to flatline, we could see the following scenario take shape: millions of people working below the minimum wage, without full employment rights, with little hope of ever getting a proper job, all for the benefit of large corporations. That would be a very grim situation indeed.