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Welfare, savings and impoverishment… May 6, 2014

Posted by WorldbyStorm in Culture, Economy, Irish Politics, The Left.

A fascinating piece on BBC radio in their Analysis slot with psychologist and public affairs professor Elda Shafir who has studied scarcity and how that impacts on the cognitive ability of those who are poor [scroll down the page, it’s close to the top at the moment]. The findings are well worth considering and it’s an intriguing listen. But I was also fascinated by how the following was brought into the mix:

What about welfare? You hear the phrase ‘benefits culture’ a lot in the UK and it often seems to be implying that people stay on benefits for a lifetime or through generations out
of choice because they’re not motivated. That might be the case, mightn’t it?

Isn’t it amazing how deeply rooted the concept of the feckless is these days, and it is not difficult to see how useful it is for the right as a tool in terms of managing perceptions of public policy. Shafir answers in a robust fashion:

Yeah, it might be the case. I see no evidence for it and I see tons of evidence for the opposite. So you know are there some who have endorsed a certain culture which leads them not
to want to find work? Sure it’s possible. Everything we know from research, everything from labour economics to decision making, to other areas, people prefer to work you know for the
right wage as opposed to not work. People try very hard to do things well. And look we have the evidence
– a lot of these people who don’t do well when they’re poor strongly would do things a lot better when they’re less poor,
and that’s part of what the studies show.

And this exchange is interesting too.

If you’re right and if people who are you know stuck on benefits are there not because they don’t want to work and don’t want to make the effort but because they are trapped in a scarcity mindset, what then can policymakers do to change the way benefits are delivered that would help break that cycle?

Well it’s everything from how benefits are delivered to how difficult my daily life is.

And he continues:

It’s back to transportation, to childcare, to banking. What can you do to make people’s lives better? … [If you can] design their lives in a way that allow them to thrive, you’ll be able to tell which are the ones who are able and trying and motivated to succeed as opposed to those who are not. And then the answer, we’ll see whether it’s 10 per cent or 20 or 30 who are not trying hard enough. As long as you design a context that’s guaranteed to lead me to failure because the banks are not reliable, because the loans are too high, because I can’t manage childcare, transportation or anything else – everybody will fail. You can’t tell anything about the motivation or the capacity.

And Shafir makes some useful points about how it is necessary to have savings, to be able to ‘absorb you know a rainy day’.

I’ve noted before, just how difficult it can be to get the monetary gains from having cash/savings up front – in relation to, for example, magazine or paper subscriptions. For those able to pony up a hundred euros or whatever there are significant discounts over paying the cover price. And it is these seemingly small but very tangible financial issues that further impoverish people who have little enough to begin with.

But add those to unreliable and under-resourced infrastructures, whether financial, educational, transport and so on and it is not difficult to see how life itself becomes for many many all but impossible.

If it seems that the game is loaded, well… of course it’s loaded. That’s the point.


1. CMK - May 6, 2014

A most interesting discussion and analysis – will follow up later. I would add one observation drawn from personal experience: that the more financially under pressure one is, the less capable one is of either financial planning or thinking long, which would include savings and pensions. I think from a class-war perspective incessant austerity has the benefit of stripping every single spare cent from working people to the point where this no financial ‘fat’ left; and we see this with people using their savings to pay bills, pretty soon the savings will be gone but the bills will remain, what then?

There was the ‘affluent worker’ thesis in late 60’s sociology based on studies of workers enjoying the long post-war boom.

Austerity, from what I can see, has the implicit objective of stripping any possibility of affluence away from ordinary workers. Here, for instance, for many the LPT or the water tax might have gone to savings or in to modest private pensions. Now those sums have to be handed over to the state, who will, in turn, hand them over to the bondholders.

Given that we have at least two decades of austerity at the present levels of intensity it is pretty clear that the possibility of comfort, modest affluence or making provision for the future will be denied to the vast bulk of the working population. Map that across Europe, as it is European policy, and you have an enormous political problem for the legitimacy of capitalist polities. Something the capitalist parties, which their short term view of everything and their faith in the ‘market’, seem completely unaware of.


2. ejh - May 6, 2014

It’s back to transportation

Not yet, but I bet they’re considering it


3. CL - May 6, 2014

Being poor is hard work. And it drains so much time and energy that there is little left for political involvement,-which is why the better off and the rich control the political agenda.


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