I've been running an employment Project for long-term unemployed people since I left The Big Issue eight years ago. I have an unshakeable belief that almost anyone can do some form of productive work and get paid for it - it just requires the right opportunity and the right support. I created a specialist temp agency where we'd find the right people and provide the right support, calling on the right employers to offer the right opportunity.
One of the benefits of this approach is that nothing teaches jobseekers how much they have to offer like actual work that's actually paid. The Big Issue does it and the distribution service I've set up (Clean Slate Distribution) does it still: Jobseekers say 'I can't work' but ask them to pack envelopes for a few hours. We pay them for doing it and they'll come back saying: 'Have you got any more?' From there, all else flows, including the desire to get their health or housing sorted out and an interest in finding the kind of work they really want to do.
With hindsight, maybe we were talking to the wrong employers but we shelved the temp agency idea two years ago. We were focusing all our efforts on social landlords. All they could see was risk and some even described our jobseekers as 'the kind of people we don't really want working here'. We only asked for a few hours a week per 'temp', enough for someone to prove themselves... more often to themselves, but the answer was almost always 'no'. Whatever, employers were sure as hell not going to pay for it.
There was a bit of an outcry this time last year when Lord Freud suggested that maybe some disabled people should be paid less than the minimum wage. Rightly, campaigners were disgusted. But equally rightly, I think, employers outside of all-but-defunct 'sheltered employment schemes' would agree they can't take on individuals (of whatever background) who will cost more to employ than they can make off their work. (They could subsidise wages with charitable payments and this would have huge value to those workers but that's not employment that leads onto mainstream jobs like I'm talking about here.) So, where does that leave us?
Mainly, it leaves thousands of jobless people out of work.
Our distribution service is struggling to grow. It is competing with one-man-bands and firms charging less than (let alone paying) minimum wage. They may not pay tax and don't seem to charge VAT. Not only are we fully compliant, we have the additional costs of recruiting, training and supervising people who've been out of work for a while. Our marketing costs are higher because we have to persuade customers we won't let them down - something only made harder by endless rhetoric about jobseekers being workshy, feckless skivers. But it's an entry level job where it's easy to get working - which is why non-compliant services flourish here too.
The upshot is, the more you cost to employ, the more productive you're going to need to be. The customer will only pay so much, so the harder you're going to need to work. In the simple terms of a leafleting job, if a customer won't cough up enough so I can pay you £9 per hundred deliveries, you'd better deliver 200 leaflets an hour! (That's over three a minute with no time to get from one road to the next.)
The Living Wage IS the right thing to aspire to for people on the lowest wages. It will lift many out of absolute poverty (but relative poverty is trickier if everyone is earning more on average). Many costs might sneak up though if, as Tesco says, it's going to cost them half a billion more to comply.
What I'm concerned about is the Living Wage raising the bar further for those already considered a poor gamble by employers. And when I question whether the Minimum Wage had the negative impact people feared, I'm wondering whether it hasn't already frozen a good number of long-term unemployed people out of jobs.
See the QIPN feature on the Living Wage.
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