The Unintended Consequences of Compulsory Social Policies: marginalising effects of the Dutch Jobseekers Employment Act

Henk Spies

Utrecht University, The Netherlands

Dept. of General Social Sciences

(Draft summary, please do not quote without permission)

The Jobseekers Employment Act and it’s backgrounds

Social security in the Netherlands has witnessed a paradigmatic shift over the last decade, from protection - by providing income or services to those who are unable to earn a living - to participation - by stimulating people to take care of themselves by means of paid work. The Youth Employment Act that became operative in 1992 constituted the introduction of a ‘workfare’ policy in the Netherlands: after being unemployed for 6 months young people no longer had a right to a minimum income (a benefit) but to a minimum job. For the older long-term unemployed there were also training and employment programmes, but participation in these was not compulsory. Since then these separate policies converged, resulting in the 1998 Jobseekers Employment Act (JEA) in which most of the preceding policy measures have been integrated, and that aims ‘to stimulate long-term unemployed people, and especially the young, to participate in activities that promote entry into the labour market and prevent social exclusion’.

There are four principal options: (1) schooling and training, (2) subsidised employment with a regular employer, (3) working on secondment in an additional job with a regular employer in the public or private sector on the basis of a contract with a municipal work organisation, and (4) social activation. Participation is compulsory: refusal to participate and drop out are sanctioned by exclusion of the right to a benefit for one month.

Several theoretical notions underlie the compulsory nature of the policy. Firstly, the notion that unemployed people behave as ‘homo economicus’. In the early 1990s the image of the ‘calculating unemployed’, who make a rational decision of remaining or becoming dependent on benefit, came to dominate public and political discourse in The Netherlands. The image of 'homo economicus' is convenient and encouraging to policy makers, as it suggests that peoples' behaviour can be easily influenced through financial incentives and disincentives. Thus, sanctions will prevent participants to drop (or: opt) out.

Secondly, the revival of the notion that full employment, or rather an increase of the percentage of the population participating in paid work, is a necessary condition to maintain the social security arrangements of the welfare state. Drawing on Durkheim’s classical analysis of the division of labour in society, work - again - came to be considered to be the only institution that could still create solidarity and prevent societal disintegration. Also, drawing on Jahoda’s classical study of unemployed people in Marienthal, the meaning of work to the individual is increasingly called to mind. This notion of the importance of paid work serves as an important moral justification of the compulsory nature of the policy.

Thirdly, the notion that social policy had focused too much on 'care' when it should have been offering opportunities for self-sufficiency. Thus, dependency has been stimulated. Through an activating labour market policy unemployed people should be assisted to re-enter the labour market. A paternalistic approach, with firmer surveillance and tougher benefit sanctions, is considered necessary to break the cycle of dependence (‘learned helplessness’) and to overcome clients’ incompetence.

Within the Jobseekers Employment Act, the option of working on secondment in an additional job with a regular employer in the public or private sector on the basis of a contract with a municipal work organisation for young unemployed people, can be considered to be the option in which the notions outlined above have been put into practice most consequently.

On the basis of empirical research on participants and drop outs of this programme, it can be concluded that although the programme may have emancipating effects for some participants, it leads to marginalisation of others.

Marginalisation processes

Marginalisation results from several processes. Firstly, the introduction of the Youth Employment Act in 1992 (a predecessor of the JEA) was meant to substitute ‘traditional social assistance’ (i.e. income maintenance) for young unemployed people. Consequently youth benefits were lowered, as allegedly no one would be dependent on these benefits, as everyone would participate in the YEA. However, in practice only a quarter of all young unemployed people actually participates in the programme. The others (including those participating in schooling and training and in social activation) are still dependent on - now substantially lowered - benefits.

Secondly, with the incorporation of the Youth Employment Act into the Jobseekers Employment Act, young unemployed people no longer automatically have a right to a contract of employment with a municipal work organisation. The first years the YEA was operative, there was a massive problem of ‘empty contracts’. Young unemployed people after six months of unemployment had to be offered a contract of employment, although not sufficient placements were available. Since the introduction of the JEA in 1998, participants only get a contract after a placement has been realised. Although in current economic conditions sufficient placements are available, this nevertheless has led to a deterioration of clients’ position to negotiate - and increased the pressure to accept a placement offered. This increases the likelyhood of drop out, as increasingly participants get jobs they do not aspire (e.g. there still is a lack of technical jobs).

Thirdly, in spite of the consequence of loss of income participants do drop out. Approximately a quarter of the outflow of the programme consists of ‘negative’ outflow that gets sanctioned. A little more than half of the participants leaves the programme for ‘positive’ reasons (regular job or education), and the rest for all kinds of ‘unclear’ reasons (moving house, reaching age limit a.s.o.).

When we compare those who drop with other participants, it becomes apparent that these drop outs generally have less favourable social backgrounds than other participants. They mention problems with their parents more often, were in contact with institutions for public assistance, both ‘compulsory’ help (resulting from judicial decisions) or ‘voluntary’ help (e.g. social work) more often than other participants. Consequently, the policy seems to fortify unequal chances that already exist before people enter the programme.

A closer look at how and why participants drop out reveals that rational, economic considerations hardly matter. Problems that participants mention with regard to their jobs are (among others) that they find the work boring, that they have nothing to do or only get the worthless work. These problems spring from the fact that participants are not allowed to do work that is normally done as a regular job. The work has to be meaningless, at least in an economic sense. Many participants complain that they do not learn anything from it. Other aspects of gaining work experience, such as keeping agreements, working regularly, dealing with collegues and hierarchical relations, they can only see as ‘boring rules’ that have no purpose. An important problem is that the jobs available are mainly administrative jobs. Although many participants do not know exactly what kind of work they want to do, there is (especially among the drop outs) a group which wants to do technical work - where ‘technical’ do them means ‘something with your hands’. They also prefer a workshop to an office.

These problems seem to be the main reasons for dropping out. A typical development is that participants start to break their agreements, they do not appaer at an appointment, or are late, oversleep for work and so on. After some warning notices this development ends with dismissal. The respondents are not always able to give a coherent explanation for their behaviour, but it is clear that they have a general feeling of dissatisfaction, and that they lacked respect in the work they did.

After being dismissed and excluded from the right to a benefit, young unemployed people are left to their own resources. In many cases they become completely dependent on their parents, family or partners. However, the social relations of these people are vulnarable, as they generally have more ‘problematic’ social backgrounds. It is therefore highly questionable whether, and for how long these social relations can be counted on for subsistence. Some respondents mentioned that they had intensified their criminal activities after being excluded from the right to an unemployment benefit.

Compulsion reconsidered

The theoretical notions that underly the compulsory nature of the policy seem to be problematic in the light of empirical evidence. Participants can hardly be characterised as ‘homo economicus’. A drop out rate of 25% indicates that rational, economic considerations for many are not very important, as dropping out is the worst option in an economic sense. Respect seems to be at least as important as a motivation.

The importance of participating in work is emphasised in this employment programme almost to the extent that ‘any job is better than no job’. However, the most important problem that many participants mention, is that they find their work meaningless and boring. It seems that meaningfull activity is more important to them than the formal fact of having a (second rate) job.

Although it may be true that social policy in the past has focused too much on care instead of offering opportunities for self-sufficiency, many participants complain that the current policy does not provide them with these opportunities either. They think the wage is too low and that they are approached paternalistically.

In the design of the Jobseekers Employment Act, the element of compulsion seems to be built in as a safeguard to the systems functioning. In a more individual, client centred policy the ‘systems functioning’ would not depend on compulsion, but rather on a (mutual) commitment to a goal that is determined in interaction between consultant and client, on the basis of a clients specific situation. In such a policy compulsion, under strict conditions, could still serve as a means to start a learning process, by breaking open a cycle of dependency and learned helplesness - if such a situation occurs. A necessary condition, however, is that compulsion has to be sufficiently ‘vague’ to leave room for negotiation on the exact content of what is being asked. For example, the requirement that one should do something in return for a benefit, can be a starting point for a discussion between consultant and client on how better social integration can be achieved, in compliance with individual needs and circumstances. This way people are made ‘accessory’, or co-responsible for the outcome of the policy, which may be a necessary condition for a policy that acknowledges the need for respect and meaning in peoples lives.