This article from Dr Simone Casey explores tensions between 'work first' activation of unemployed people enforced by the employment services system in Australia and theories of rational choice that underpin market economies. Dr Casey is an Associate of the RMIT Future Social Services Institute.
Work First is the type of Active Labour Market Program that involves demanding activation. In an earlier era, was identified as being part of shift to the market relations of work fare. This shift reflects the neoliberalisation of social and economic policy wherein individuals and social services organisations are expected to compete in markets to prosper. Neoliberalism is a bastardisation of classic economic liberalism in which the tenets of laissez faire capitalism such as freedom, personal responsibility and choice are favoured over government intervention. Choice, especially as conceived within the ‘personal responsibility’ mantra, is supposed to provide motivation and build the capacity of the autonomous and reflexive agent. Rational actors, it is assumed, will make decisions that reflect their economic self-interest, and when given such opportunity will make progress towards self-improvement.
So - if in liberal economic theory, choice is central to competition, what is the ethical justification for work first? This is a concern because work first enforces tangible constraints on these kinds of choices. It demands that the unemployed engage in work-focused activity such as job search, work for the dole and to accept any job that is available. Work first limits choice. This is because the exact nature of the activity is determined by employment services rules, and unemployed people are punished with financial sanctions if they do not meet activity requirements. The only choices available to the unemployed are to go along with what they have been told to do or exit from welfare payments.
In Australia’s Active Labour Market Programs, choices were initially shaped through behavioural incentives - the famous carrots and sticks idea. Yet the use of carrots and sticks, was not regarded as sufficient to shape all behaviours particularly because of the idea of moral hazard. This is the paternalist idea that poor people cannot be trusted to make the right choices mandated by popular consensus. For this reason, Lawrence Mead argued they must be supervised and have their welfare payments controlled if they did not behave as required. More recently ‘nudge’ emerged as a new public policy tool to shape behaviour. As soft paternalism it contrasts with ‘big brother’ hard paternalism by prompting citizens to help them make informed decisions, rather than interfering with the basics of decision making itself.
And what is wrong with this if work first helps people get jobs? On the question the brilliant Hartley Dean dissected the ethics of work first and identified the prioritisation of paid work of as a significant cultural concern. These concerns have been central to the feminist criticism of work first activation on single parents and the recognition of care work. Further analysis from the ethical perspective of ‘egalitarian liberalism’ suggests that that work first is unethical because it is damaging to citizens' self-respect and that it produces inequity in the enforcement of social duties and/or consolidate the vulnerability of workers who are already unjustly disadvantaged. In short this means the hands of the rich will always better dealt better than those to the poor.
There are numerous limitations on choice that arise from the contradictions of free market capitalism itself. The first limitation on choice is that it is predicated on a ‘context minimisation error’ in which the impact of enduring environmental contexts on human behaviour are underestimated. This ‘fallacy of choice’ serves to justify restrictions on the provision of services and social protection to the unemployed. In work first activation it is manifest as a tendency to place the onus for unemployment on individual behaviour rather than on economic factors.
Individuals unable to achieve labour market entry or progress into secure work experience the self-recrimination predicted by Hartley Dean. Further, low paid and contingent jobs lead to in-work-poverty and the loss of the capacity to ‘get ahead’. ‘Market failure’ leads to disempowerment and it is hard to make long term plans when the immediate priority is to keep the wolf from the door. In further contradictions of neoliberalism unemployed citizens are stripped of wealth as they wait to meet asset test thresholds or to avoid the hassle of demanding activation. This means unemployed people are vulnerable to adverse luck and this is reflected in the growth of homelessness linked to unemployment.
It is clear that the unemployed who are unable to compete in the competitive market relations of neoliberalism have been suffering. This suffering is caused by both the lack of availability of jobs for these unemployed, poverty and demanding activation. Choices for unemployed people have been limited to the initial selection of an employment services provider. This is the kind of choice associated with public choice theory intended to maintain a competitive market of providers. This marketisation experiment failed. Further, while work first suppresses real choice, any pretence to choice of provider is meaningless. Future social policy needs to attend to the constraints on choice so that unemployed people are liberated from demanding activation that does little to help them get jobs.