The Government’s latest welfare reforms will help get people out of the “trap” of benefit dependency, Social Development Minister Paula Bennett says.
The second bill in the Government’s two-stage welfare reforms, signed off by Cabinet yesterday, will reduce the number of benefit categories, make benefits more work-focused, introduce expectations for partners of beneficiaries and make beneficiaries prepare for work.
Most of the bill’s changes were previously flagged but an unexpected move is the cancellation of benefits for anyone who turns down an offer of “suitable employment” – with a 13 week stand-down period before they could apply again.
One of the reasons we have unemployment benefits instead of something like military conscription for the unemployed or ‘work-for-the-dole’ is that it’s a good way for marginal workers to be selective as they transition between jobs so they can ‘move up the value chain’.
The theory goes that someone with no skills enters the work-force at, say, a retail store. The store closes down (creative destruction!) and they go on the dole until they find a similar position at a similar store, and so build skills and experience and gradually become a more productive, better paid worker.
That’s less likely to happen if marginal workers are compelled from one low-value job to another. If an unemployed retail worker transitions into a cleaning job, then a super-market job, then a dish-washing job, then an aide at a nursing home, and so-on, all placed there by WINZ because they’ll cut their benefits if they don’t accept those positions, you’re making it hard for people starting out in the work-force to increase their productivity. And one of the HUGE problems with the New Zealand economy is the relatively low productivity of our workforce.
I pointed this out on twitter yesterday, and people argued that having a job doesn’t make it harder to search for a new one. And that’s true if you have a job where you can sit at your desk and search for work online while you drink your coffee, then email out applications and schedule interviews with prospective employers at a convenient time, or over Skype or whatever – but not so much if you’re, say, a waitress with set break periods, and applying for a new job means traveling across town and queuing for several hours while you wait your turn for an interview.