4 - Supporting People Into Work: A Brief History

Summary

So far we have discussed the importance of productivity to pay rates and the quality of work, demonstrating the need to improve productivity in the everyday economy through better management, and focusing on good work as a means of doing so. Now, we shall look at the other side of the employment relationship: namely, the power that people have over the nature and quality of the work they do. Examining the state's actions across a range of policy areas, we ask whether they empower or disempower the unemployed and low paid.

We start by examining policies to support people into work, and how these have developed over time. Normally, these policies are examined in very simple terms through their effectiveness or otherwise in enabling entries into work. Today, however, with job quality, low pay and limited pay progression being a much more important part of the UK labour market story, it becomes important to examine how policies to support people into work affect the quality of work people move into, and what happens to people after they have entered the workplace. We start by looking at the history of such policies, then examine the realities of today’s offer, and finally look at better ways to approach this crucial area of policy.

BEVERIDGE AND THE 1940S

Since the beginning of the modern National Insurance system on 5 July 1948, the state has provided both unemployment insurance and welfare payments to workless families without other sources of income. Although the purpose of these financial transfers has been to prevent extreme poverty, there was also recognition of the need for recipients to minimize their draw upon the state by looking for work.

Both Beveridge and the wartime government agreed that people who were unemployed should receive support from a placement service to help them find work (Clarke 1944), and that unemployment insurance should not be paid unconditionally and indefinitely. However, there were differences in views about what should happen after the expiry of the initial period. Beveridge said that “Unemployment benefit will continue at the same rate without means test so long as unemployment lasts, but will normally be subject to a condition of attendance at a work or training centre after a certain period” (Beveridge 1942).