14 July 2015

Only half of people get jobs when leaving a benefit

“New data obtained by the CTU shows that less than half of people who come off a benefit are known to have obtained work,” says CTU economist Bill Rosenberg. “In 2014, MSD records show only 46% obtained work. We therefore cannot assume that falling benefit numbers means people coming off benefits found work.” The data was released to the CTU last month by the Ministry of Social Development under an Official Information request.

“Even adding on the 11% going into full time study means that as many as two out of five people leaving benefits aren’t going into work or study,” says Rosenberg.

“The release of information also showed that not only does the Ministry not know for sure how many of its clients found work, it has no way of knowing what quality of work they find,” Rosenberg says. “Do they get zero hour, casual, or low paid work, or go onto 90 day trials – or do they find good sustained jobs with prospects for skill development and rising incomes? The MSD’s 2013 annual report on the benefit system commented that a high proportion of people leaving a benefit returned within a year and listed as likely factors seasonal work, casual, low paid work or 90 day trials. Such comments are missing from the 2014 report even though it observed a high rate of clients returning to Jobseeker benefits despite improved labour market conditions.”

“Ministers of Social Development regularly make statements proudly announcing a reduced number of people on a benefit, saying more people are getting into work or study. The two do not necessarily match. Many people leave a benefit without getting work, and those who get work may be in insecure, poorly paid jobs,” Rosenberg commented.

“It also provides a strong caution regarding the so-called ‘Investment Approach’ which assumes that getting people off benefits is always good. It isn’t always good, particularly if people don’t find good quality jobs, and it ignores the good that comes of providing people with income at difficult times in their lives.”

ENDS

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