I personally don’t have a problem with the principle of workfare as it is taking the principles of employment to a logical conclusion – money in exchange for labour.
Since welfare has ceased to be funded by social insurance methods and is now funded by taxation, it gets to a point whereby people are remunerated for nothing. This is not to say that the welfare state should not exist. It should exist as it, in theory, provides for continued existence. The “money for nothing” attitude increases resentment in the working population leading for calls attacking those in receipt of welfare payments – or “benefits”. This doesn’t help anyone. Thus workfare exists.
The principle of workfare, if I have judged this correctly, is a) ending the “money for nothing” ethos; b) supplying job seekers with experience; and c) increase overall productivity of the economy.
Workfare in practice is full of unintended consequences. The problems have been laid out by @ChrstinaDarling on her blog – Politics & Gin. I have taken a paragraph from her commentary on the subject which I believe highlights the ill economic consequences .
The problem with Workfare as it stands is that it is actually one of the most obvious examples of government interference in business that there is – corporatism at its finest. In this case, Tesco are essentially benefiting from free labour whilst the taxpayer picks up the bill for their workers’ pay (benefits). Free markets have to work both ways; if companies don’t want to be crippled by excessive regulation and taxes, they should not expect the state to provide them with help – be it in the form of free labour in this case, or government bail-outs.
Commentators on the left have called the workfare scheme “akin to slavery”. This is, of course, hyperbolic guff. Workfare participants still participate in the economy just like any other – exchange of labour for remuneration – albeit at a reduced rate.
Left and Right have ended up moralising employment. The Left calling anything other than traditional forms of employment as “slavery” and the Right equating it to a restriction of the market. As previously discussed it is not slavery. Nor is it a restriction of the market as market participants (businesses) have freely entered into a contract with government.
Workfare could, however, be employed in a much more beneficial way to the economy as a whole and job seekers. They way that workfare could be employed is in the voluntary sector – the embodiment of Cameron’s “Big Society”. To put it crassly. A lot of charities can’t afford to employ a large workforce and thus rely on volunteers (free labour). Government supplied labour could supplement the voluntary force providing a fresh injection of labour into the third sector and providing job seekers with confidence and skills.
Of course, as with any tampering with markets, there will be ill unintended consequences. However, by utilising a sector which relies heavily on free labour the consequences will be lessened.