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Saturday, June 09, 2007

Social Sector Experts

I am what they call a 'social sector expert'. I have a masters in social policy, and over 20 years experience working in the social sector, of which 15 years were 'hands-on' work with low income families or individuals, and older citizens. Plus a few years of doing voluntary work in hospitals. Having also have a few moments of financial struggles myself I have a good idea what it is to be poor (though I have always had the hope to be able to get over it). I understand that very poor people, and especially those who are long-term poor, perhaps even coming from generations of poverty, have quite a different outlook on life compared to the average middle-class person, and even the ex-poor MP or government official. The latter have been able to escape from their situation by one way or another; the long-term poor are so used to struggling that they can be extremely risk-averse, and prefer to continue in their situation, on low state benefits, rather than take a job (in which they fear they may not succeed because society has been telling them they are no good, and if they are fired the benefits system will make them worse off), or even, gasp, start a small business. Just read Lynn Hanley's book 'Estates'. I would not start a small business either - my attempts at this have always been unsuccessful. Some people have got it and others haven't. So, governments saying that small businesses are the best way out of poverty (for the nation) may not be the best advice to the very poor, who, in the case of business failure, then find themselves with huge debts. And of course they retreat back onto their benefits. In passing, an article I recently read about young people in Berlin stated that some young people won't take jobs because it would offend their unemployed families. That's the kind of thing we have to battle against when trying to address poverty! Poverty is not just absence of money, it's in the mind.

So I am increasingly surprised when I come across people describing themselves as 'social sector experts', and I find they are economists. Often they come from nice middle class homes (do children from poor families become economists? that would be an interesting topic to a study...), and have never done a 'decent day's work' since leaving university (apart from reading or writing studies based on other studies), as Sam Galbraith recently memorably said about Charles Kennedy. And they have had little contact with poor people. A great basis for dealing with the poor!

Of course there is no doubt that social sector expenditure needs to be paid for, and it needs to be sustainable, but they should also take into account that social sector expenditure (for health, education and social protection) is a direct economic contributor (There's an EU document that states this, COM (2000) 379, but many people of course think the EU is a bit namby-pamby. Those people usually come from a very developed country with a really high poverty rate). A country with a poorly educated workforce will not be able to attract industry. A country with a poor health service, or one where people have to pay directly for treatments, has people not receiving treatments, becoming unable to work, unable to earn money and spend it, leading to poverty not only of themselves, but of those around them. A country with a poor social protection system, such as the UK, ends up in a situation where everyone is putting their money into property out of fear for the future, constantly driving up the price of property, and pricing young people out of buying their own place. One of the richest countries in the world, Switzerland, has one of the lowest rates of property ownership - because people can rely on their pensions in their old age. In passing it's worth mentioning Esping-Andersson's work (a Swedish expert whose classification of welfare state models is a classic) where he states that poverty is directly linked to poor performance at school, thus blighting the life chances of children before you even start.

Economists look at social protection in a different way. Yes, they want to alleviate poverty, but preferably at minimal cost to the state or to employers. You hear comments like 'goodness, the state spends x per cent on the social sector', or, in a country where employers spend 5% on social insurance contributions, 'we cannot possibly increase those contributions'. Well, folks, it needs to be done. In most advanced welfare states (and it's worth mentioning that Finland, one of the most highly advanced welfare state, is also one of the world's most efficient economies), the state and employers invest heavily in social welfare, to enable people to work on the one hand, but also to protect them against adversity.

A 'social sector expert' (an economist) tells me that the greatest challenge is to identify those who may be entitled to services, eg with the help of biometrics, like in the health system. Well, actually, no. That's only the greatest challenge in countries that do not have universal health coverage; in other countries that does not really matter because you are either universally insured or able to use the health services as a resident (though usually you have to play by the rules of the country and sort out your paperwork). So what would be the point of identity fraud? How often can you get an operation for appendicitis? In the social (cash) benefits sector actually the greatest challenge is, particularly in economies with large informal sectors or high poverty levels where people have more than one job, trying to establish the actual income/wealth of individuals or families, in order to pay the correct amount of benefit. You don't want to pay more because you don't want the benefits system to cost more than it has to, and you don't want people to stay on benefits for long and become dependent.

Of course it was the economists of the world bank that influenced the countries out east to introduced the short, sharp shock of closing inefficient industries and laying off thousands and thousands and thousands of people. I wonder what is the total sum of people laid off in the former Soviet Union and Eastern Europe during the early 90s as a result of their advice? No doubt the industries needed to be renovated/updated etc, but there was no investment, there were just closures. And a few people got very very, obscenely, rich, whereas many others continue to exist on below subsistence levels.

Economists? Keep them away from me!

2 comments:

varske said...

I think that people who grew up poor and dragged themselves out of it tend to spend all the rest of their life making sure they are not dragged down again. They want to have as little to do with poor people as possible as it is all too painful. So dealing with the poor is left to do gooding middleclasses with no hang-ups and not much imagination.

I still remember the bitter humiliation of having the Headmistress offer me a secondhand school blazer, saying: I am glad you have got it; your mother is not feckless with money like the others. I had to bite my tongue not to say that when you don't have a lot of money, school uniform is a long way down the priorities. She had probably no idea what constant juggling went on with money in poor families.

But economists always deal with the poor as a group rather as individuals so they are inevitably more detached. I dont think anyone has ever studied "economic preferences as displayed by poor family groups", on the assumption that "no choice" is not very interesting. But poor people do make choices all the time, about whether or not to eat etc.

violainvilnius said...

exactly, it's the constant juggling that goes on - that's exactly what a Georgian foster parent said to me recently when asked about her expenditure. And it only needs a little upset, like a week off work when you don't have good sickness coverage, or the car breaking down if you need it to go to work, or even a school trip and everything falls apart.

You are right, too, about people being treated as a group by economists - without taking into account the individual experience of constant, grinding, poverty where every toothache is a catastrophe...