tag:blogger.com,1999:blog-2277215496195926573.post5800305757725628549..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: British lefties continue to whine about workfare.Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-2277215496195926573.post-18034662374187852652012-06-19T23:17:52.697-07:002012-06-19T23:17:52.697-07:00I agree that minimum wages raise NAIRU.
I don’t t...I agree that minimum wages raise NAIRU.<br /><br />I don’t think Workfare is an ALTERNATIVE to the UK’s Work Programme. Workfare is a stipulation along the lines of “do this job else your benefit gets reduced”. That’s an element (of varying degrees of severity) than can be incorporate in virtually any employment system or subsidy.<br /><br />Re Friedman’s proposal, the weakness with it is that it’s not much different to a lax unemployment benefit system. I.e. people get taxpayers’ money even when they choose not to work. Put another way, the Work Programme specifically rewards people for working, or if you like, punishes them for not working.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-47332769918225142622012-06-17T20:14:08.452-07:002012-06-17T20:14:08.452-07:00Taking your points in turn, I agree they are entit...Taking your points in turn, I agree they are entitled to the minimum wage per hour.<br /><br />Re stigmatisation, all sorts of people get stigmatised: people with ugly faces, people doing minimum wage work, etc etc. If I were an employer, I’d have more respect for someone prepared to do a workfare job than someone who refused same, all else equal.<br /><br />Re psychological damage, I think that is far fetched. One could argue that the “employer does not pay the wage” for most of our public sector: e.g. the health service relies on tens of billions worth of subsidy. Indeed, some of those in the private sector look down their noses (unjustifiably) at those in the public sector for this reason. I don’t think health service employees are psychologically damaged to any degree because of this.<br /><br />Your final paragraph assumes that workfare people just displace regular employees on a one for one basis. That is the main £64k question at the heart of workfare. I argue here that there are reasons for thinking workfare brings a NET INCREASE in aggregate employment:<br /><br />http://mpra.ub.uni-muenchen.de/19094/Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-36540804490080193382012-06-17T03:11:41.092-07:002012-06-17T03:11:41.092-07:00The fact that they are not getting paid by employe...The fact that they are not getting paid by employers is important for several reasons:<br /><br />* They are not employees, and do not have employment rights such as the right to a minimum wage. This was illustrated by the #JubileeStewards scandal.<br /><br />* As non-employees, they may be stigmatised even if their net income happens to be about the same as it would be if they were on benefits<br /><br />* Their employer does not pay them, which is psychologically damaging<br /><br />* Their employers are private sector organisations, which means that (as you noted) they will choose to take on free workfare help, instead of creating new jobs or refilling existing posts. This means less job creation, more workfare "jobs", and in effect a continuously-increasing torrent of subsidy flowing from the DWP to workfare employers.Robinhttps://www.blogger.com/profile/05420921538604886480noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-80370679984875703772012-06-17T03:09:52.792-07:002012-06-17T03:09:52.792-07:00Workfare is a bad idea. Cut it to 50 GBP a week, p...Workfare is a bad idea. Cut it to 50 GBP a week, paid as a negative income tax and abolish the minimum wage! That's what Milton Friedman would do. What's not to like?<br /><br />Minimum wage is a price floor, making it illegal to pay and to get paid in market prices, raising the NAIRU, right?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-57052663472047455602012-06-16T07:35:31.443-07:002012-06-16T07:35:31.443-07:00Not a bad point. Re minimum wages, the unacceptabl...Not a bad point. Re minimum wages, the unacceptable anomaly is that they are working at less than the minimum wage PER HOUR. Same goes for interns. However the Guardian, far as I can see, is too much into emotion and propaganda to have spotted this point.<br />Re travel to work costs, obviously if £X a week is regarded as the minimum acceptable to live on WITHOUT travel costs, then travel costs should be awarded to those having to travel. <br /><br />Re meals and clothes, they are costs even for those who don’t work, so I don’t see a reason for taxpayers stumping up for these two items.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-52147234718608421902012-06-15T13:14:48.329-07:002012-06-15T13:14:48.329-07:00Yes, you are correct; they are not working for not...Yes, you are correct; they are not working for nothing. However, they are working for a fraction of the minimum wage level. How would you like to work 30 hours a week for only £67 - and have to fund all your in-work costs such as transport, clothing, equipment and meals?Leehttp://peakwalking.blogspot.comnoreply@blogger.com