LSE on Tax credits

LSE Politics blog on Tax Credits. Tax credits are not a solution, and have left half the working families in this country welfare dependent.

Wage top-up schemes are an attractive way for policy makers to address income inequalities, but they may well be corrosive to those they are aiming to help.

As the global economic crisis continues, global wage inequalities have become even starker. While the government is keen to reduce these inequalities through its Working Tax Credit wage top-up, Hartley Dean argues that these schemes may be counter-productive, stigmatising some recipients and locking others into the low-paid periphery of a polarised labour market.

Recent research conducted at the LSE has investigated the perceptions of low-paid workers who have been receiving the UK government’s Working Tax Credit (WTC). The WTC is the latest version of a means-tested state benefit or ‘credit’ that tops-up the wages of low paid workers. Similar schemes have been introduced in at least a dozen other countries around the world and have in recent years been growing in significance. Global trends have fuelled wage inequality and, in richer countries, governments of all political persuasions have been seeking ways to ‘make work pay’ for those workers at the bottom of the labour market who must live at sub-subsistence wage levels. In the UK the current WTC scheme is soon to be absorbed into a new ‘Universal Credit’, which  – for low paid workers – will fulfil the same function.

The aim of our research, which was funded by the UK’s Economic and Social Research Council, was to explore just how WTC recipients feel about having their wages topped up in this way. To do this, we conducted in-depth interviews with 52 WTC recipients (36 women and 16 men) drawn from across the whole of England. Although a high proportion had no or low-level qualifications, some had been educated to degree level. Their employment experiences reflected the extent to which so many jobs can now be low-paid and insecure. Characteristically, their working lives had involved a series of short term jobs, often interspersed with periods of full-time child care or unemployment.

There was clear popular support for the WTC. Despite this, there was confusion as to the purposes of the scheme. A lot of recipients failed to understand the distinction between WTC and the Child Tax Credit (a benefit for low to middle-income families with children). Recipients generally understood that WTC provided an incentive for recipients to go to work, though by and large this was regarded as an incentive that applied not to them (they said they needed no incentive) but to ‘other’ people: 

So um, obviously I think it was an incentive for people hopefully to try at least do something, you know, to go back to work. ‘Cause I think a lot of mums who I know from school, it’s so easy for them not to work at all and they earn just about the same amount of money as what I take home without doing anything at all really. So, uh, I mean I could never, never do that at all. I’ve always got to do something so and what they do all day, I don’t know… but I think once the kids are a bit older, I probably will work full-time and not hopefully try and rely on this anyway, so, it’s um, I try to be honest. I know a lot of people won’t do but I cannot do that. I have to try and make me own way if I can but obviously this money does help. [38 year old lone parent]

Most recipients acknowledged that WTC functioned to lift people out of poverty, and however helpful this might be, there was, for some, an element of stigma associated with the benefit. None of the recipients properly understood how their entitlement was calculated and this could leave them feeling quite powerless.

The recipients’ motivations to work were far more complex and varied than a simple response to a financial incentive. Recipients wanted by and large to work, and often felt good that they could, but sometimes the value they placed on work had little to do with money, or else the jobs they were doing failed to meet their aspirations or undermined their sense of self-worth:

 I work on a chicken counter at [supermarket], so I mean, I could, you know, I don’t want to be doing that the rest of my life because there are things I’d rather be doing than that, you know, within the Union or within the political framework. [36 year old partnered man with children]

 

Although the WTC scheme was generally viewed positively and most of the people we talked to were grateful for the additional income, there were still some important undercurrents of resentment. WTC does not of itself compensate for the injustices or adverse effects of a precarious and inadequately paid work. Paradoxically, hardly any of the people who took part in this research explicitly recognised that schemes like WTC are in effect a subsidy to low paying employers, but a lot of them felt devalued at work or locked in to menial jobs.

Our findings suggest that wage top-up schemes may not always be conducive to sustaining a morally meaningful work ethic among those workers who are systematically confined to the low-paid periphery of a polarised labour market. In the UK, incidentally, it seems likely that some low paid workers may feel less good about having their wages topped up by the state, because the proposed Universal Credit will abolish the distinction between ‘credits’ for workers and ‘benefits’ for people out of work. More generally, however, schemes of this nature might assist in accommodating workers to a flexible and competitive low-wage labour market but there will still be circumstances in which workers may feel in various ways aggrieved.

It is worth remembering that the Universal Declaration of Human Rights holds that everyone has the right to work that is freely chosen and subject to just and favourable conditions. Whether wage top-up schemes serve to mitigate or perpetuate the violation of that right is a moot point.

The preliminary report – Wage Top-ups and Work Incentives: the implications of the UK’s Working Tax Credit scheme by Hartley Dean and Gerry Mitchell – is now available.

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Hebden Bridge

When I started this blog, I lived in a town called Hebden Bridge. Over the past two years, there has been a bit of exodus as people who are the community are priced out. This is another perspective on that exodus

.Organochavs cleaning the town of it’s ‘seediness’ to open tat shops, gift shops and shops that sell tofu and cake shaped soap. The festivals she talks about, the result of hardwork from people who have to leave. Those people less important than a squabble about whether rich people can risk the locals when they deign to grace Hebden with their presence.

Hebden Bridge – quirky, seedy or a bit of both?

Local novelist Jill Robinson, an off-cumden who’s only been in Yorkshire for 43 years (since her Dad’s business went bust and the family moved from cream-tea Devon), kicks off a monthly post from the Hampstead of the riding

The summer season in Hebden Bridge, funky former mill town in the Pennines, is well under way. The extravaganza Handmade Parade – giant puppets designed and made locally, this year on the theme of Food – was held in mid June, and the two-week long Coming of Age 18th Arts Festival kicks off this Friday 24th with a performance of short plays.

Both events showcase Hebden at its brightest and best, reinforcing its appeal as a quirky, creative hotspot. Once known for the manufacture of fustian work-wear – cords and moleskin – the town has successfully re-invented itself as a centre for the arts and alternative living. There’s a plethora of galleries, gift-shops, whole-food stores, and a canal-sidecentre of alternative technology among many other attractions.

A sign on the main A646 road approaching the town from Halifax direction reads Hebden Bridge – 500 years of creativity. The reverse, for those leaving, declares: That was So Hebden Bridge. There’s currently a thread discussing this on the excellent Hebweb local community forum; some like it; others loathe it. Is the sign a symbol of quirkiness, or simply pretentious?

In a sense, the discussion epitomises an on-going debate about the town, aired in another Hebweb thread discussing moving to Hebden Bridge. A woman is considering doing this, attracted by the quirky/funky element; her husband is apparently more concerned about the town’s druggie image. This aspect of life in Hebden Bridge was thrown into sharper focus last year, with the release of Jez Lewis‘s documentary film,Shed Your Tears and Walk Away, featuring drunkenness, drug use and self-destructive behaviour in the director’s home town.

In a sense, the discussion epitomises an on-going debate about the town, aired in another Hebweb thread discussing moving to Hebden Bridge. A woman is considering doing this, attracted by the quirky/funky element; her husband is apparently more concerned about the town’s druggie image. This aspect of life in Hebden Bridge was thrown into sharper focus last year, with the release of Jez Lewis‘s documentary film,Shed Your Tears and Walk Away, featuring drunkenness, drug use and self-destructive behaviour in the director’s home town.

Houses in Hebden Bridge, west YorkshireHebden Bridge: good houses built of stone. Photograph: Christopher Thomond

A whole host of questions were raised. Why does Hebden have these problems? Does it have them on a greater scale than anywhere else, or is it simply because they are more visible in Hebden Bridge, with more visitors to notice them? Does the unusual topography of the town exacerbate the problems? The steepness of the hills means that the sun never reaches the bottom of the Calder Valley in the darker months, giving rise to what some inhabitants term ‘valley-bottom fever’, a variant of Seasonal Affective Disorder. Are the problems tragically highlighted in the film a result of the hippy lifestyle of the 1970s ‘off-cumdens’ (in-comers), who set no boundaries for their own or their children’s behaviour? Have the local residents become inured to, and grown too accepting of, anti-social behaviour?

It is possible to sit in Calder Holmes park on a sunny day, watching pensioners on the Bowling Green, young people on the newly revamped skate park, and parents and children eating ice-creams; while a few yards away in the other direction is a collection of people, supine on benches o
r the grass, having passed out surrounded by empty cans, with the scent of marijuana pervading the entire scene – and nobody seems to think this is anything unusual. Maybe it isn’t…

A friend travelling on the bus to Hebden recently overheard a drunkenly loud-voiced lad trying to deal drugs on the back seat; some of the other passengers looked rather startled, but the driver took absolutely no notice.

Meanwhile, for the forthcoming feast of culture, go to the Hebden Bridge Arts Festival web-site. That really is ‘So Hebden Bridge.

 

UK taking action against European Central Bank.

Original here. On BBC website.

The UK government is taking legal action against the European Central Bank (ECB) over a planned change to European banking rules that could harm the City of London.

The ECB’s plans would require clearing houses that handle more than 5% of the market in a euro-denominated financial product to be based in the eurozone.

The Treasury says the move would contravene European law.

It has started proceedings at the European Court of Justice.

A Treasury spokesperson said: “This decision contravenes European law and fundamental single market principles by preventing the clearing of some financial products outside the euro area.

“The government wants to see this resolved swiftly and without involving the courts, but if necessary will not shy away from continuing legal action to make sure there is a level playing field across the EU for British businesses.”

Number of jobless women hits 23 year high

Original found here:  th

Writing today for the Huffington Post UK, Shadow Employment Minister Stephen Timms says that the latest unemployment figures, released yesterday, are grim – particularly for young adults and women.

According to Mr Timms, long term unemployment has doubled over the past year, resulting in the biggest rise in unemployment for two years.

In addition to this, youth unemployment has surged by 78,000 and the largest number of women are out of work since 23 years ago.

Mr Timms identifies the absence of growth in the economy as the main problem, coupled with poor private sector confidence.

The Coalition government has previously stated that the private sector would create enough jobs to offset the job losses resulting from public sector cuts.

However, Mr Timms says this simply is not happening. In fact, almost three times as many jobs are being lost as are being created.

He highlighted the growing problem of the cost of childcare. The government has reduced the level of support available and plans to abolish the current system of childcare trust tax credits.

Both of these are likely to result in women being better off out of work than in.

 

Added by me: THese women will be portrayed as staying at home to look after their kids. The ones for whom work is a necessity are now the subject of a war being waged on them.

 

Actually a second to look at Stephen Timms comments: ‘Mr Timms identifies the absence of growth in the economy as the main problem, coupled with poor private sector confidence.’- Mr Timms identifies wrong but doesn’t fail to spot an opportunity to get the Labour message across.

 

Interesting piece:

Examining why China need to save us. I think we believe that after the way we have used our economic dominance, that the world is going to rally to help us. I think what is more likely, is we are about to see globalisation from the perspective of those without dominance. And there is the possibility that our successors will behave the way we did.

Putting em on a pedestal

I read an interesting piece in the Guardian, asking why we have had to depend on the right wing media to hold the government to account. This week,  Johan Hari came out all contrite for his ‘crimes’, asking us all for forgiveness for the damage he has done. These two stories are the same story.

Johan Hari doesn’t need to apologise to me, he is a fucking columnist. I don’t think columnists are infallible, any more than I think the Pope is. The lines between comment and journalism have been deliberately blurred. Our political debate has drifted so far from reality it partly because it is shaped by columnists willing to cherry pick, distort to suit their particular agenda. We put those columnists on a pedestal.Reality cannot be allowed to intrude.  The left prepares young journalists like Laurie Penny, for the same fate. Owen Jones can speak for the chavs. The inevitable picking over of their bones, another circus.

The left wing media rail against the this very thing in the right wing media, occupying enough time and column inches that they don’t have to address the same in themselves. And this man who rose fast in ‘journalism’ is to learn how to be one, years into his career. Three times I discussed going on the 11 o clock show, and three times it became apparent that what they needed was a talking head willing to validate a false soundbite to fill ten minutes airtime. At £500 an appearance, when rent was not looking possible, it was tempting. I am smart and personable enough that it was an opportunity easily taken.

Evidence and reality is too dangerous for a political debate. The left are oblivious to the make-up of their own particular comment fest because they are speaking on behalf the marginalised so it doesn’t count. Discussions of those outside their class limited to easy to absorb cartoons.

And this is the debate our political system feeds off, because otherwise it might have to consider politics as something that affects those who vote and reality would have to intrude.  The social networks that our left wing media types come from the same as those on the right with less casual clothes. The differences between our political parties are so small, that the Labour left have to magnify differences to enormous proportions and manufacture debates. Same misogyny. Same comical ‘cut throat’ careerism. Same elitism. Same pandering to vanity. The value of comment undermined by its confinement to these parameters and its role in shaping political debate. It’s danger in the inability to hold an opinion to account, because all perspectives are valid.

The inclusion of ‘new voices’ amounts to little more than occasionally throwing one of the poor under discussion, into a feeding frenzy of trolls to satisfy either the left or rights position. Welcome to remain if they smile sweetly and pretend defending their existence is a valid political debate.

An unrepresentative media, shaping an unrepresentative political debate. The many many important voices and talented journalists on the left who are not like this, are lumped in and discredited by association. Hari is paying the price for being part of a cut throat and sealed political media bubble, a media bubble with little relevance to those outside it.  

The left wing media now begins to pay the price for never tackling the things it finds abhorrent in their own house. Its media and organisations will be attacked from both sides. From the right who see through hypocrisy, and from those who do not like being exploited. The Guardian fought an admirable media war against a giant who set the tone of the debate. And the aftermath is now that the tone of the debate has to change. The right are recognising the problem because they have to. The left are going to have to come to the same conclusion. But in the meantime government will be held accountable more often from the right, than the left. 

It isn’t being held accountable at all at a local level, as our local and regional media appear to have forgotten what news means.  An unconvincing political blogosphere has been created to manage the impact the internet might have. And as our top down media is challenged by the bottom up model of our internet age, there will be many vocal spats.

So I made a decision a few weeks ago. I know everyone thinks I want to be the next Toynbee, but I don’t. And adding one more opinion to the circus helps no one. Gives me a few clippings for a scrapbook if I remembered to print them out. Lets my sister tell everyone I write ‘for’ the Guardian. But my opinion is just that, and it is frequently wrong. I have spoken to the Guardian, and explained that for the time being I won’t be contributing, and have laid out why. I am very grateful for the support I got from Natalie and Becky, and still read it and have a great deal of respect for many of the writers who they have brought to the fore.

I will continue to blog here, and I will be starting with the Manchester Mule. In an attempt to learn about reporting news at a local level. If am going to contribute(there are few other opportunities at the moment) I am going to contribute in a way that has some value. The Mule is only little, but they are doing what other local news outlets should be doing. And I want to be doing that too. Making Guardianistas feel better that they are reading a novelty pov isn’t going to achieve anything.