Gordon Browns Legacy - Pays Not To Work

[South Lorne]

...only Nulabour could leave this time bomb.....and almost impossible to solve....

Proof that work just doesn't pay: Child poverty among unemployed families is falling ... but INCREASING in working homes

Comments (281)

Child poverty is rising among working families while generous benefits cut it for the unemployed, a report has revealed.

The study by the respected Joseph Rowntree Foundation is an indictment of Labour’s record in power - and casts doubt on the Coalition’s ability to deliver its pledge to ‘make work pay’.

It reveals that while the policy of lavishing benefits on the unemployed has helped tackle some aspects of child poverty, many working families have fallen behind.

http://www.dailymail.co.uk/news/article-1336028/Work-doesnt-pay-Child-poverty-unemployed-families-falls-rises-working-homes.html

[winkie]

...only Nulabour could leave this time bomb.....and almost impossible to solve....

It is common knowledge that work doesn't pay for many....they live a life that they know no difference...form father to son, don't think they are necessarily discontented with their life...they know no difference......they have a roof over their head, food in their belly and tv to watch, community is strong, they stick up for each other and help one another...life goes on.

Only the hard working living the rat race feel the resentment....because of the fear that their standard of living could fall to meet that of the unconscious.....

There is plenty of money to go around...but it is the top end of society that have decided want a greater slice of it, the poor plod on making do, ducking and diving, wheeling and dealing...... the rest pay for it.

Edited December 6, 2010 by winkie

[OLDFTB]

It is common knowledge that work doesn't pay for many....they live a life that they know no difference...form father to son, don't think they are necessarily discontented with their life...they know no difference......they have a roof over their head, food in their belly and tv to watch, community is strong, they stick up for each other and help one another...life goes on.

Only the hard working living the rat race feel the resentment....because of the fear that their standard of living could fall to meet that of the unconscious.....

There is plenty of money to go around...but it is the top end of society that have decided want a greater slice of it, the poor plod on making do, ducking and diving, wheeling and dealing...... the rest pay for it.

Ah yes...but.......if enough of us wanted to, we could soon change all that couldn't we!

[wonderpup]

I'm struggling to find a connection between 'lavish' benefits and the fact that people who work full time cannot afford to look after their kids- surely the issue is that wages are too low for these people?

If every single benefit was stopped this would have no impact on the income of the low paid worker, would it? They would still be earning too little to look after their kids.

[richc]

I'm struggling to find a connection between 'lavish' benefits and the fact that people who work full time cannot afford to look after their kids- surely the issue is that wages are too low for these people?

If every single benefit was stopped this would have no impact on the income of the low paid worker, would it? They would still be earning too little to look after their kids.

As someone who pays 50% of their income in rent (and can't afford to have children), I can definitely say that 'lavish' benefits in the form of preposterously overly generous Housing Benefit and mortgage support certainly do impact me. Has it completely escaped you just how high the cost of living is in Britain? What do you think is supporting that market?

[Tired of Waiting]

I'm struggling to find a connection between 'lavish' benefits and the fact that people who work full time cannot afford to look after their kids- surely the issue is that wages are too low for these people?

If every single benefit was stopped this would have no impact on the income of the low paid worker, would it? They would still be earning too little to look after their kids.

Or the cost of living is too high - particularly housing.

Governments don't have the power to set real wages. Ask Mugabe or Hugo Chaves.

But governments can help by taxing the poor less. For instance by lifting the income tax allowance to £10,000.

And gov. should unblock planning restrictions, allowing for mass home building, reducing housing costs.

All benefits risk perverse incentives, and cost working tax-payers money.

And housing benefits does increase the demand for rents, and hence average rents, for all.

[shiningliao]

I'm struggling to find a connection between 'lavish' benefits and the fact that people who work full time cannot afford to look after their kids- surely the issue is that wages are too low for these people?

If every single benefit was stopped this would have no impact on the income of the low paid worker, would it? They would still be earning too little to look after their kids.

If not to work is better off than low wage work, then people will opt for not to work. Hence decrease tax income and increase benefit payout. This makes whole society getting worse each day... which is what happened in the past decade.

If low wage work is better than on benefit, people will opt for work. Hence increase tax income and decrease benefit payout. Again, less benefit payout will eventually (hopefully) lead to less tax. So the low wage work condition can be better. This makes whole society getting better.

[South Lorne]

If not to work is better off than low wage work, then people will opt for not to work. Hence decrease tax income and increase benefit payout. This makes whole society getting worse each day... which is what happened in the past decade.

If low wage work is better than on benefit, people will opt for work. Hence increase tax income and decrease benefit payout. Again, less benefit payout will eventually (hopefully) lead to less tax. So the low wage work condition can be better. This makes whole society getting better.

...the adjustment can't be an immediate surge in wages due to our need to be competitive in the world which is already showing signs of growth through exports with the realistic exchange rate prevailing ....we do need to have a position where work will always be the better option in remuneration terms for those able bodied ....and benefit levels for say housing should not be set at a level to safeguard landlords....

[miko]

If not to work is better off than low wage work, then people will opt for not to work. Hence decrease tax income and increase benefit payout. This makes whole society getting worse each day... which is what happened in the past decade.

Worked with a guy who had one child and a non working wife they lived in a council flat. Next door the woman had two kids and was on her own , he was just

a couple of £ a week better off than her.

This was 1982 this system has been going on for years.

[erranta]

If not to work is better off than low wage work, then people will opt for not to work. Hence decrease tax income and increase benefit payout. This makes whole society getting worse each day... which is what happened in the past decade.

If low wage work is better than on benefit, people will opt for work. Hence increase tax income and decrease benefit payout. Again, less benefit payout will eventually (hopefully) lead to less tax. So the low wage work condition can be better. This makes whole society getting better.

We worked out on 'ere that all the benefit subsidies paid out to minimum wage 'workers' are, in the main, subsidising Global Big Businesses like Mcmuffin Kentyukky chikken Domin O's pittas hidden main shareholders and executives in another country!

Pointless jobs which actually 'cost' this country!

[South Lorne]

We worked out on 'ere that all the benefit subsidies paid out to minimum wage 'workers' are, in the main, subsidising Global Big Businesses like Mcmuffin Kentyukky chikken Domin O's pittas hidden main shareholders and executives in another country!

Pointless jobs which actually 'cost' this country!

...so wage subsidy benefit goes ultimately to the Global Fast Food style icons paying the legal minimum and housing benefit subsidy goes to BTLers.... good heavens Gordo ....what a mess .....

[EUBanana]

As someone who pays 50% of their income in rent (and can't afford to have children), I can definitely say that 'lavish' benefits in the form of preposterously overly generous Housing Benefit and mortgage support certainly do impact me. Has it completely escaped you just how high the cost of living is in Britain? What do you think is supporting that market?

Not only that, but someone at or near the minimum wage is, by estimate, taxed to the tune of 40% of income after indirect taxes are considered, if you assume they will be spending 100% of the pay on day to day living - which is not an unrealistic assumption I feel.

If you had a minimum wage of £9 or so that'd be pretty good, would it not. That'd be the equivalent sum of getting the state's boot off the neck of the working poor.

[wonderpup]

As someone who pays 50% of their income in rent (and can't afford to have children), I can definitely say that 'lavish' benefits in the form of preposterously overly generous Housing Benefit and mortgage support certainly do impact me. Has it completely escaped you just how high the cost of living is in Britain? What do you think is supporting that market?

Right- so in a world choc full of bent bankers, moronic regulators, BTL specualtors, property flipping MPs, Liar loans ect ect- you have finally identified the cause of the problem- people who claim housing benefit.

Yes I can see it all clearly now- Wayne and Tracy form the hub of vast conspiracy to inflate the cost of housing, sucking into their evil scheme an innocent and well meaning financial sector and a trusting Government.

And the really cunning aspect of Wayne and Tracy's plan is that none of the money can be traced back to them! instead it is paid out to their landlord- no doubt he too is but an unsuspecting dupe in the web of deception these two fiends have constructed.

You have got to be kidding me.

[South Lorne]

And the really cunning aspect of Wayne and Tracy's plan is that none of the money can be traced back to them! instead it is paid out to their landlord- no doubt he too is but an unsuspecting dupe in the web of deception these two fiends have constructed.

...interestingly the money is now paid to "Wayne and Tracy"...who in turn pay the landlord ...sometimes "Wayne and Tracy" do not pay the landlord and spend the money on a holiday etc ...this apparently causes landlords all sorts of problems and "Wayne and Tracy" begin to have additional problems ....someone is paid to sort it out.....another layer of cost....

[wonderpup]

If low wage work is better than on benefit, people will opt for work.

The problem that arises is that there is a minimum level of income required to house and feed yourself- so unless we are prepared to live with large scale homelessness amongst the poor this kind of sets a floor under the benefits system.

To make the claim that because people who work full time in low wage jobs cannot afford to live in our society therefore we should reduce benefits is really odd- in what way does reducing benefits to other people help the guy who is not claiming any and who works full time?

The two are not connected except in the minds of newspaper owners who would rather we spent our time kicking the shite out of benefit claiments than ask akward questions like why the hell a person with a full time job in the UK cannot afford to live in the UK.

That's the real issue here- and housing costs are a real factor has been pointed out. But again to blame the HB claiment for high house prices is also absurd- they are an effect, not a cause.

[wonderpup]

...interestingly the money is now paid to "Wayne and Tracy"...who in turn pay the landlord ...sometimes "Wayne and Tracy" do not pay the landlord and spend the money on a holiday etc ...this apparently causes landlords all sorts of problems and "Wayne and Tracy" begin to have additional problems ....someone is paid to sort it out.....another layer of cost....

So in what way does this cause HPI?

[Stay Beautiful]

Right- so in a world choc full of bent bankers, moronic regulators, BTL specualtors, property flipping MPs, Liar loans ect ect- you have finally identified the cause of the problem- people who claim housing benefit.

Yes I can see it all clearly now- Wayne and Tracy form the hub of vast conspiracy to inflate the cost of housing, sucking into their evil scheme an innocent and well meaning financial sector and a trusting Government.

And the really cunning aspect of Wayne and Tracy's plan is that none of the money can be traced back to them! instead it is paid out to their landlord- no doubt he too is but an unsuspecting dupe in the web of deception these two fiends have constructed.

You have got to be kidding me.

Well said. Dont be duped into thinking it is the people on benifits that are the problem. They maybe a buch of the leaves but certainly not the root.

[South Lorne]

in what way does reducing benefits to other people help the guy who is not claiming any and who works full time?

...that is not the issue ...which is the wage earner should be better off working than on benefits to ensure he /she does not give up and 'go' on benefits ...and able bodied people on benefits should have an incentive to work ...i.e. higher remuneration than they receive on benefits to persuade them work is better.... .....

[South Lorne]

So in what way does this cause HPI?

...the post was to correct the modus operandi ....but since you ask ...it's obvious this will create holiday price inflation .. the additional hassle and losses to landlords plus the more admin costs will push up the cost of rents....HRI....if you mean HousePI....?....I'm not sure why you asked the question .....

[MongerOfDoom]

I'm struggling to find a connection between 'lavish' benefits and the fact that people who work full time cannot afford to look after their kids- surely the issue is that wages are too low for these people?

If every single benefit was stopped this would have no impact on the income of the low paid worker, would it? They would still be earning too little to look after their kids.

Poverty is a relative measure nowadays. The definition ensures there will always be a lot of poor people who "need" help. If benefits are cut then it will be the unemployed who are poor and not the low-paid. There would also be a sudden increase in the supply of cheaper labor, some of which could be used to reduce the cost of things that only people who work need to buy. Whatever you think about this, it would certainly be a step away from giving the less fortunate completely insane incentives. And no, it does not mean anyone would have to starve.

The suggestion that we need higher salaries is laughably naive. It is rather like advocating a large tax-cut in the current environment, in that there is no way of paying for it. At least a tax cut would not mean the cost of everything that includes labor (including child-care in particular) to rise accordingly.

I am sure that some will reply saying "but look at the huge companies, they can surely afford to pay more". Maybe some of them can, although you would expect very low unemployment if there was a huge profit in employing additional people. There is also the slight problem that they don't need to because labor is cheaper in most of the rest of the world, and labor by the lazy illiterate especially so. Have you noticed how the stock markets have been soaring over the last decade because companies make so much money?

[(Blizzard)]

Right- so in a world choc full of bent bankers, moronic regulators, BTL specualtors, property flipping MPs, Liar loans ect ect- you have finally identified the cause of the problem- people who claim housing benefit.

Yes I can see it all clearly now- Wayne and Tracy form the hub of vast conspiracy to inflate the cost of housing, sucking into their evil scheme an innocent and well meaning financial sector and a trusting Government.

And the really cunning aspect of Wayne and Tracy's plan is that none of the money can be traced back to them! instead it is paid out to their landlord- no doubt he too is but an unsuspecting dupe in the web of deception these two fiends have constructed.

You have got to be kidding me.

Wayne and Tracey aren't the problem, they are just the mechanism by which the government props up land owners and speculators - themselves, and their cronies basically.

Wayne and Tracey would be no poorer had housing benefit been frozen in 1999, and house price inflation kept down. They would still be sitting in the same house, with the rent picked up by the state, enjoying same disposable income. Working people would have been better off, but speculators would have been forced to get real jobs.

In reality Wayne and Tracey are patsies, taking the rap for the benefit scrounging of their work shy landlords.

This is all the fault of the previous government who were well aware of the terrible consequences of their actions, but none of this changes the fact that housing benefit needs to be cut.

It is just a reminder that housing benefit cuts are ultimately targeted at the rich, not the poor.

Edited December 7, 2010 by (Blizzard)

[MongerOfDoom]

Right- so in a world choc full of bent bankers, moronic regulators, BTL specualtors, property flipping MPs, Liar loans ect ect- you have finally identified the cause of the problem- people who claim housing benefit.

The root cause is clearly an utterly incompetent government that among other insane things loosened financial regulations and thus abolished boom and bust. However, it does not matter what the root cause is. It is utterly wrong to give the unemployed over £400 a week so they can live in central London. What possible justification is there for that? Don't you think that rents paid by those in work will fall if LHA does?

[(Blizzard)]

Poverty is a relative measure nowadays. The definition ensures there will always be a lot of poor people who "need" help. If benefits are cut then it will be the unemployed who are poor and not the low-paid. There would also be a sudden increase in the supply of cheaper labor, some of which could be used to reduce the cost of things that only people who work need to buy. Whatever you think about this, it would certainly be a step away from giving the less fortunate completely insane incentives. And no, it does not mean anyone would have to starve.

The suggestion that we need higher salaries is laughably naive. It is rather like advocating a large tax-cut in the current environment, in that there is no way of paying for it. At least a tax cut would not mean the cost of everything that includes labor (including child-care in particular) to rise accordingly.

I am sure that some will reply saying "but look at the huge companies, they can surely afford to pay more". Maybe some of them can, although you would expect very low unemployment if there was a huge profit in employing additional people. There is also the slight problem that they don't need to because labor is cheaper in most of the rest of the world, and labor by the lazy illiterate especially so. Have you noticed how the stock markets have been soaring over the last decade because companies make so much money?

Yes, exactly and child-care is a great example. The cost of child care is 1. Low skilled labour and 2. Land.

Benefits push up 1 and 2 (as do payments to bankers and landowners, which are just as important).

.

Edited December 7, 2010 by (Blizzard)

[Damik]

Right- so in a world choc full of bent bankers, moronic regulators, BTL specualtors, property flipping MPs, Liar loans ect ect- you have finally identified the cause of the problem- people who claim housing benefit.

Yes I can see it all clearly now- Wayne and Tracy form the hub of vast conspiracy to inflate the cost of housing, sucking into their evil scheme an innocent and well meaning financial sector and a trusting Government.

And the really cunning aspect of Wayne and Tracy's plan is that none of the money can be traced back to them! instead it is paid out to their landlord- no doubt he too is but an unsuspecting dupe in the web of deception these two fiends have constructed.

You have got to be kidding me.

some basic math for you:

the root of the problem is the ever increasing cost of the welfare system as there are 3 positive amplifying feedback factors built-in:

- more and more people turn to the welfare as it is much more convenient than the work on minimal wage

- there is a strong incentive to have more children on welfare to increase your welfare income

- house benefit and tax credits artificially inflate the living costs of everybody else

and the welfare is paid by the tax payer ...

Edited December 7, 2010 by Damik

[leicestersq]

I'm struggling to find a connection between 'lavish' benefits and the fact that people who work full time cannot afford to look after their kids- surely the issue is that wages are too low for these people?

If every single benefit was stopped this would have no impact on the income of the low paid worker, would it? They would still be earning too little to look after their kids.

It would make a huge difference if benefits were stopped.

Firstly the low paid worker would not be subject to as much tax, both direct and indirect. What they would earn would go much further.

And also we would see that those on benefits would get jobs, increasing the total production of the nation. If by getting jobs, the national output were to increase by say 5%, then on average everyone, including those currently not doing anything on benefits, would be on average 5% better off! Of course this wouldnt be distributed evenly amongst the population, but we would notice it not having to carry these dead weights around.