Should Jobseekers Benefit and Allowance be reformed?

In order to properly discuss this issue, I think we have to avoid generalisations. Poverty is this or poverty is that. There are some people who are in poverty.

I completely disagree that all poverty in Ireland is generational. There is no way that view can be backed up with hard facts. It might well be popular in a pub but popularity doesn't mean something is true.

There are cases in this country of people who are poor and it is not self induced or inherited. But that is a fact that doesn't fit with some people's social theories, so the easiest thing to do is to generalise. It really only shows up our ignorance of the situation.
 

There is no denying there are some genuine hard-up cases out there but by its very nature social welfare must generalise. I would agree with Towger that the bulk of poverty in this country is down to cultural, generational and educational/parenting issues. Throwing taxpayer money at the problem in the form of increased social welfare is a wasteful and ineffective solution from a lazy government. The deliberate inducement of a culture of state dependence in certain unemployment blackspots is something the government should be ashamed of. It is (or should be) an affront to people's dignity and an insult to all those who must work to support the creation of these isolated mini-welfare states.
 
I'll explain some poverty terms:

"Ultra poverty" - never heard of it. I'd say you mean "absolute poverty", which tends to exist only in some parts of the third world.

Relative poverty - where people are poor, relative to the norms in that society.

The EU define relative income poverty as having a disposable income less than 60% of the median equivalised disposable income. If you fall into this group, you are defined as being "at-risk-of-poverty".

See the latest CSO report:

[broken link removed]

So even if your income is less than 60% of the median, you may not actually be poor, but you are at risk of poverty, due to the low income.

Consistent poverty = this is an Irish term, meaning you are at risk of poverty and you lack certain items which are deemed necessities.
 
Protocol said:
"Ultra poverty" - never heard of it. I'd say you mean "absolute poverty", which tends to exist only in some parts of the third world.
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OK, to make it even easier for those who seem never to have heard of Google either:
 
It's true that the income of a very poor typical Irish person are about equivalent to a typical upper middle class Indian person who employs a maid and a butler full-time. Wealth and poverty are inherently relative.

If you don't want to recognise this, then the outright scrapping of all forms of welfare makes sense.

This thread is abour reforming welfare rather than scrapping it, if the title means anything.

So how come nobody's willing to talk about the Danish system?

One theory about why Denmark has so little poverty (either absolute or relative) compared to Ireland is that their "culture" (whatever that may be) is different.

The other theory as to why there's so much more relative poverty in Ireland over Denmark is that their poverty-prevention mechanisms are orders of magnitude more intelligently planned and engineered than the Irish system.

I incline towards the latter view.

However, if you think the Irish welfare system is better or equal to the Danish one, please explain how. If you've got some killer points of information to make, or insights to give, I might change my mind. But frankly, it'll have to be good.
 
rock3r said:
So how come nobody's willing to talk about the Danish system?
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Perhaps nobody is talking about the Danish system because very few people on the board have any knowledge of the intricacies of how the Danish social welfare model operates. Instead of barking at everyone to discuss it, why not take the time to explain its relevance?

I know successful Nordic countries are long regarded as the economic equivalent of a Rorschach test - people on the left see the generous social welfare entitlements, people on the right see open economies pushing for a deregulated EU with both groups regarding the cause of one as the reason for the success of the other.
 
I'd like to hear more about the Danish model too. I hope you'll forgive me for my lack of knowledge about economics but below I will share the only information I have for discussion on this topic.
Denmark is one of the diminishing number of countries I havent been to in Europe yet but somehow I feel the Danish economy is less open than ours. Their attitude to immigration for example.
A Danish engineering colleague once told me about 2 years ago I quote : 'we decided we dont like the immigrants' then he told me how his government is doing everything to discourage immigration. Since then I've read an article about how a non EU spouse (US lady) of a Danish citizen had a lot of trouble coming to live there and was possibly refused. In contrast our economy is built upon continuous immigration so Im presuming we should be growing at a much faster rate and need a welfare model different to the Danish one (where numbers in employment wont grow so rapidly) or does one size fit all ?
 
This, apparently, is the "Danish model" as regards unemployment benefits, which I have already talked about on this thread:

"Unemployment
Regulatory Framework
First law: 1907. Current laws: 1970 (employees) and 1976 (self-employed).

Type of program: Subsidized voluntary insurance system.

Coverage
Employees aged 18 to 65, the self-employed, and persons who have completed at least 18 months of vocational training. Covered persons must be members of an approved unemployment fund established voluntarily by trade unions (for instance, in industry, commerce, office work, agriculture, handicrafts, catering, transport, or quarrying).

Source of Funds
Insured person: Membership contributions to an unemployment insurance fund consists of a variable contribution toward financing the fund (rates vary according to fund), a mandatory fixed contribution toward the payment of unemployment insurance, and a voluntary fixed contribution toward payment of early retirement pay.
Employees and the self-employed pay 8% of their gross salary or earnings toward the Labor Market Fund to cover state expenditure on unemployment insurance benefits and voluntary early retirement pay.
Employer: A part of the supplementary 3% value-added tax base of the enterprise.

Government: Any cost above the insured person's and employer/employee contributions.

Qualifying Conditions
Unemployment benefit: Membership in an unemployment fund during the last 12 months (self-employed included) and 52 weeks of employment in last 3 years.

Unemployment must not be due to voluntary leaving, misconduct, a labor dispute, or the refusal of a suitable job offer. The claimant must be registered for employment and capable of, and willing to, work.

Voluntary early retirement pay scheme: Resident and aged 60 to 65 (including the self-employed) and a member of an unemployment fund for 25 of the last 30 years; 20 of the last 25 years if born before July 1, 1964; or 10 of the last 15 years if born before March 1, 1952.

Unemployment Benefits:
90% of average earnings of the previous 12 weeks, up to 3,205 kroner a week. The benefit is payable from the first day of unemployment (5 days a week) for an initial period of 1 year (job-seeking period). The self-employed have a waiting period of 4 weeks. The initial benefit period may be followed by a second period of 3 years. If the unemployed person is aged 55 to 59, the second period may be extended until the 60th birthday to allow entitlement to the voluntary early retirement pay scheme.
Voluntary early retirement pay scheme: The maximum benefit is 91% of the highest unemployment benefit, but not more than 2,916 kroner a week. Certain favorable conditions apply to workers staying in the labor market for a minimum period of 2 years after age 60."

It doesn't strike me as vastly superior or differnet to Irish system.
 
Looks very similar to Swedish model which has the highest rate of employee absenteeism in Europe. Nearly ten percent of all working-age employees are out on permanent disability benefits (up to 80% of gross salary). Government payouts on sickness benefits blow nearly 20% of the government's yearly budget.

Gunnar and Alva Myrdal were the intellectual founders of the Swedish welfare state and have previously opined that if the "welfare state cannot work in Sweden then it simply cannot work anywhere".

Increasing the incentives available to live off of other citizens is rarely a good idea.
 
I agree, 305, and also with your earlier comment on "lazy government". Getting caught up in definitions of poverty (be in educational, cultural or monetary) danish models, etc. cannot get away from this state's inability to offer the long-term unemployed anything that will change the mindset of "living off the state".

My fear is that, in the Celtic Tiger era, we are deferring an opportunity to reform our SW system and ignoring the threat a downslide into the catastrophe that was the dole queues of the 1980s. My reform would be to restrict jobseeker's payments to those that are willing to work or re-train adn for a certian period only. This can only be done when the state keeps its side of the contract....proper training schemes, educational schemes, apprenticeships before their benefits run out.
 
The reason I think it's vastly superior is that there's no more than 8% of the population living in relative poverty in Denmark.

Imagine a typical earner bringing home EUR384 a week after tax losing his job in Ireland and Denmark. Assume he has an ordinary net debt of EUR100,000.

Danish unemployed chap will have about EUR345 a week coming in.

Let's further assume that there's a really crappy, low-value McJob going which both the guys could get. No prospects, long hours. Under the benefit rules, the job does not count as suitable work.

The Irish guy will usually take that job, because although he could still draw his €135 per week for about a year with no questions asked, the sheer difficulty of living on that little is too hard, and paying off the debt will eat a massive chunk of that pittance, even if he's getting help with it. Odds are he'll sell up his assets, even at a loss, to clear or reduce the debt.

The Dane, however, tends to wait for an opening in a high value-added job suited to his skills and experience. His career restarts off more or less where he left it, and in a few years he's typically taking home 400 or 500 a week after tax.

After the same amount of time, the Irish counterpart will have gotten no more than the basic minimum wage hike, as his career was destroyed by the job loss, and he's lost his assets too.

Assume that they have kids and it ceases to be a mystery why child poverty is almost unknown in Denmark and close to the norm in Ireland.

How is that not greatly superior?
 
Let's further assume that there's a really crappy, low-value McJob going which both the guys could get. No prospects, long hours. Under the benefit rules, the job does not count as suitable work.

The Irish guy will usually take that job, because although he could still draw his €135 per week for about a year with no questions asked, the sheer difficulty of living on that little is too hard, and paying off the debt will eat a massive chunk of that pittance, even if he's getting help with it. Odds are he'll sell up his assets, even at a loss, to clear or reduce the debt.

The Dane, however, tends to wait for an opening in a high value-added job suited to his skills and experience. His career restarts off more or less where he left it, and in a few years he's typically taking home 400 or 500 a week after tax.


Have to say I can see the point in this. My husband lost his job and was on UB for 3-4 months. in this time, despite working in a 45k+ job before, the SW officer was pushing him to go for €20k jobs. This is fine in theory but would have involved us selling our house and not being far off the poverty line. We were fortunate that our parents could help us with the mortgage and I was working so we managed to keep our heads above water. I just don't think it's right that the government expect people who suddenly lose their jobs to take the first job going even if it means losing everything they've worked for their whole lives. The idea of a wage based UB payment over a shorter period of time seems good in theory. After a few months they could reduce it / enforce training.


 

Yes not only is the status quo in Ireland cruel, it's harmful to the economy to force people to liquidate their savings/assets AND take a job which is far beneath their skills, just because it takes a few months to get an opening in their field.

As far as I'm aware, it's rather good in practice too. I'm sure there's just as many chancers in Denmark as Ireland, but they just get their payments reduced and then stopped.
 
rock3r said:
How is that not greatly superior?
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You're asking the taxpayer to foot the bill until somebody who loses a job finds a job they like. Why can't the person take the first available job and continue to search for something more suitable, without presenting such a burden to the taxpayer?

What happened to having savings to cover periods of unemployment, instead of expecting the taxpayer to do so? Or failing that they can purchase mortgage protection to cover debt payments during periods of unemployment.

As for being better for the economy, I fail to see how this can be the case, if people are subsidised by the state to only have to work in jobs they really like. An economic downturn would virtually guarantee that anyone laid off would use their maximum length of welfare entitlements before seeking new work. This puts additional pressure on existing workers and will delay recovery. Labour unions and CORI would spend their time continually pressuring the government to extend the length of time available for the maximum benefits.

You mention Denmark as an example but France has a similar percentage-based welfare scheme. So cannot simply infer that such a welfare scheme is responsible for the success or otherwise of Denmark's economy.
 

In our case we had mortgage protection which will only pay out after 6 months of unemployment and we bought our house last year so our savings were minimal as all our savings had gone on the deposit for the house.

And as tax payers surely that is what we pay our taxes for. To have support if anything unexpected happens to us, healthwise, workwise etc...

If you go by the logic that "You're asking the taxpayer to foot the bill" then I assume you have private healthcare, your children go to private schools etc........
Not everyone can be prepared for something completely unexpected.
 
I don't get, "You're asking the taxpayer to foot the bill". Indeed is that not why we pay tax? While it would be wonderful to have have built up enough savings and private insurance plans to cover every eventuality, thats not always possible. Equally I can't imagine that someone in difficult situations would refuse any job. More likely its difficult to get a job your overqualified for. Besides someone with a solid work history isn't likely to be work shy.
 

The point is not to find a job they like as to find a job which adds greater value. Such jobs typically pay more salary, which pays more taxes, which repays the cost of €5000 in a short period of years. The Irish system, which you seem to support, pushes the person into a minimum wage job which pays little or no tax. The economy has lost a high-value added worker to the burger-flipping sector, and the Revenue has lost a source of income under your system. That's not efficient. Sometimes, the operation of a free market produces sub-optimal, crummy results, and this is an obvious perfect example.

The Dane's savings stay in the bank and are used to finance investment Denmark's robust economy. In your scheme, the savings are liquidated to provide for subsistence living.

The Danish method is simply a far more efficient use of resources.
 

Labour mobility is one of the cornerstones of capitalism. It is one of the reasons it works. Would China's growth be so rampant if people didn't flock from the countryside to urban areas in search of jobs? Would Ireland have grown so successfully over the years without inward migration? Closer to home, such a scheme would kill regional development stone dead as fewer workers will be willing to move to where the jobs are. I know my own sector of employment would be nowhere near as vibrant without workers willing to travel from other countries to obtain jobs here.

Look at France - the economy remains sluggish because there is so little labour mobility. During the riots over the (possible) introduction of relaxed labour laws, newspapers there were filled with commentary decrying how anyone could plan ahead if they could be fired from their job. The concept of losing your job and being forced to move elsewhere for a new one was completely alien to them. The same newspapers also pondered why so few new jobs were created.

You seem to imply that if someone takes a job flipping burgers then they are stuck flipping burgers forever. Why would this be the case? I doubt anyone takes a job flipping burgers with the intention of doing it for life. If the state is willing to pay people until they find their perfect job then you will find fewer and fewer people willing to take on crappy jobs.

Rather than looking at this from the point of view of someone who loses a high paying job and is forced to take a lower paying one - imagine you are in a low paying job, working hard in the hope to progress your career. Would you be happy to know that a neighbour who had one blow out year working in real estate and then got laid off, was getting paid a six figure annual salary to wait for the next bubble-du-jour? How about a highly paid CEO?

The possibilies for fraud increase as well. Contract workers could very easily arrange with their employers to get paid a bumper nine month salary by their employer and get "laid off" for three months of the year, while still surreptitiously working for the same employer. The cost to the company is the same but the salary is increased at the expense of the state.

I'm going to hazard a wild guess and say you must work in the public sector. It takes a certain hubris to say that the free market produces "sub-optimal, crummy results" (which it quite possibly does in some cases) but to then imagine the government can produce a better result.

EDIT: What are Denmark's redundancy laws like? In many cases, the mandatory redundancy payments should serve as a buffer for workers who are laid off and need to find another job. With regards the liquidation of assets, I imagine this rarely happens. A highly qualified worker with a solid employment history who was laid off could talk to his bank and gain some kind of reprieve while he found a new job. It is unlikely the bank would foreclose on his house in such a situation.
 
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ailbhe said:
And as tax payers surely that is what we pay our taxes for. To have support if anything unexpected happens to us, healthwise, workwise etc...
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I wasn't advancing the argument that we should have no social welfare, just that social welfare shouldn't be paid out as a percentage of your previous income.
 
room305 said:
I wasn't advancing the argument that we should have no social welfare, just that social welfare shouldn't be paid out as a percentage of your previous income.
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I must have missed that. I thought they were arguing why is so hard to get if you have a good work history, and a history of very few if any claims?
 
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