The vast majority of people want to work, and the political trope of a massive cohort of long-term, unmotivated welfare dependants draining public coffers is a myth, Q&A’s program on equity heard on Monday night.
The semantic dichotomy posited by politicians across the world: lifters versus leaners, the taxed countered by the not taxed, strivers against shirkers, did not exist in the real world, argued the president of the World Medical Association, Sir Michael Marmot.
“I think the evidence shows pretty clearly that the vast majority of people would rather be in work than on welfare,” he said. “There may be a small number of people who would like to game the system and have a life on welfare, but most people would rather go into work.”
Marmot said governments all over the world were convinced that if unemployment benefits were made too generous, people would have no incentive to go back to work. “It makes sense but it is wrong. When we look across Europe, the countries with the more generous unemployment benefits have the lowest unemployment levels.”
The head of the Australian Council of Social Service, Cassandra Goldie, said the proportion of people with a long-term dependence on welfare was “very, very small”.
“At any given time in terms of that working-age population, for people whose main source of income is social security, it is about 5%. That includes people who have a significant disability or are currently full-time caring – all those circumstances where there should be income support to help you through that period.”
Goldie said welfare payments were a “social and economic investment – not a cost”.
“Last year the business communities, all the business peak bodies, the unions and the community sector came together and said on social, moral and economic grounds, that payment must be increased. It is a barrier to helping people to do their bit to get employment.”
Deborah Cobb-Clark, professor of economics at the University of Sydney, said people’s contributions to society went far beyond the simple economics of paid work and that policymakers needed to take a more gestalt view of ‘the economy’.
“We do have a lot of people in society that take on unpaid work in the work of caring roles and I think that’s an important contribution, we do have a number of people who look after children or who look after the elderly, or who are doing volunteer work that’s really important, it doesn’t get counted when we think about employment.
“We should be thinking about ways to make the welfare system, to help support people in achieving their goal, whatever their goals are for their lives. And I … agree that, I think, very few people have a goal of sitting around and just collecting a cheque.”
Marmot quoted international studies that drew attention to a massive, growing inequality across the globe. He cited an experiment from the UK where people were asked what the income ratio of the highest-earning to the lowest-earning in their society should be. The average answer was 6:1 – they thought the highest-earning person should earn six times the lowest-earning person. When asked what they thought the ratio really was, people answered 12:1. The answer actually is 350:1.
He posited taking one year’s income of the top 25 hedge fund managers in New York – about $25bn – and transferring it to the African country of Tanzania, population 48 million, which also has an income of $25bn.
“If you conducted the thought experiment of transferring one year’s income from these 25 hedge fund managers to Tanzania, not simply to give them money but to pipe clean water, pay clinics, school teachers and the like, it would make an enormous difference. And the hedge funds wouldn’t miss it because they’ll make a billion next year.”
Marmot was criticised as living in “fantasy land” for his proposals for radical restructuring of existing economic systems.
He countered: “What sounds unrealistic today becomes realistic tomorrow. I don’t accept for one moment, I don’t think it is in fantasy land, wanting a fairer society”.
