I guess I’m childish – is that a bad thing?

By Matt Nolan 17/07/2013

I noticed this during my trip down the internet:

New Zealand needs to get out of the “childish mentality” that wide-ranging benefit reforms which come into force today are punitive, Finance Minister Bill English says.

And also this via Kiwiblog:

Work and Income says the results are “some of the best from any case management trial” in recent years, with 6000 of the 10,000 people in the pilot no longer on a benefit. More than half of those people found work, the rest opted out or cancelled benefits for reasons such as no longer meeting eligibility requirements.

Hold up – hold the hang up.  Opted out due in ineligibility?  Don’t we mean they had their benefit canceled because they didn’t fit the new criteria?  Nearly a third of beneficiaries were pushed off the benefit without employment income in other words – ummmm is that really a good result?  Now note, this isn’t actually the case, in truth over that period of time some people would have become ineligible or found work irrespective of the benefit policy – I was just throwing this here to illustrate how they exaggerated the “benefit” of the policy, and how we could do the same thing to exaggerate the “cost”!

Look, all this makes sense if your priors are “the benefit is and hand up, not a hand out” and “get a job you hippies”.  But we have two things other going on:

  1. We still have a weak labour market and high unemployment – it is distinctly difficult to find work.
  2. Do we really view the benefit as a temporary stop gap – or as a minimum income that an individual gets as part of society.

I find it incomprehensible to push people out of benefits in a situation where the labour market is distinctly weak.  Also, in moral terms, I believe that society should offer people an outside option – there is something distinctly perverse about basing someones status and self-worth solely on our view of them as a “labour input”.  Part of the reason for the benefit is to give workers an “outside option” to improve their bargaining position, it cannot be viewed independently of this.

Now a lot of people won’t agree with me on the second point, that’s all gravy I’m not the social planner.  But when we have a very weak labour market these reforms do appear punitive – kicking people off benefits because they have taken drugs, because they are disenfranchised around spending a long time looking for work and being rejected, that is punitive.  Look I 100% agree with some of the reforms – more targeted case management is nice (in line with trying to solve the “matching” problem in labour markets) – but mixing this in with punitive policies doesn’t stop them being punitive policies.  Telling beneficiaries and those who feel uncomfortable with suddenly tightening requirements when the labour market is weak to stop being childish doesn’t change this interpretation either ;)

My views are coloured by the fact that I remember what happened during the early 1990s with benefit reform – I remember how policies were “interpreted” at the branch level, and how much changes in benefit eligibility created hardship in my community.  But more generally I see government as a way society agrees to “co-operate” on some things, and I have an inherently different belief in the ways we should co-operate than some of these policies represent – if that makes me childish then I should spend more time talking to children about their views on the inherent social contract within society!