Recipients of cash welfare benefits need better incentives to enter the workplace argue politicians and lobby groups after new figures show that having a job does not always pay.
The figures from the Employment Ministry reveal that a single parent receiving cash welfare benefits is only 923 kroner better off a month in full-time employment, while those with two children would receive 997 kroner more a month if they found a job.
The small benefit from working may well be lower, however, as work related costs, such as transportation, are not included in the calculations.
The figures only add to the woes of the Employment Ministry, which in the past 18 months have registered 66 percent more unemployed people in the category of those least likely to enter the workforce – category three, or ‘those outside the workforce’.
In response, the employment minister, Mette Frederiksen, proposed several new measures to reintroduce cash welfare benefit receivers back into employment.
One test initiative would target the long-term unemployed – those receiving cash welfare benefit for at least 47 weeks a year over two years – providing them with a 600 kroner tax-free bonus per month if they find employment.
But the proposal was not well received by all, with some politicians arguing the wrong group was being rewarded for finding employment.
“You are rewarding those who stay unemployed and don’t enter into employment or education,” Tom Behnke, a Konservative MP, pointed out to metroXpress newspaper.
Ellen Trane Nørby, MP for Venstre, agreed with Behnke’s appraisal.
“This is another example of [the government] saying one thing and doing another,” she told metroXpress. “It’s going to be more expensive to take the bus and train and people have to pay more in tax and charges. In that way there’s less incentive to start work and 600 kroner a month isn’t going to change that.”
Frederiksen responded to the criticism arguing that the 600 kroner bonus needed to be viewed as one of many new proposals.
“You can either let the numbers grow or you can try and tackle it,” Frederiksen told metroXpress. “I want to make it mandatory to seek education for under 30s receiving benefits and I want tougher assessments of those receiving benefits about whether they are available for work because in my eyes being on benefits shouldn’t be an opt out.”
Thinktank Cepos also argued that better incentives are needed to get people back into work.
"The government should also pass a reform of the entire benefit system in order to ensure that people moving from public assistance to a typical, low-wage, unskilled position gain at least 2,000 kroner a month,” Cepos chief economist Mads Lundby Hansen told The Copenhagen Post.
Prime Minister Helle Thorning-Schmidt joined the debate at her weekly press conference on Tuesday, arguing that Denmark’s welfare system needed reform.
“If you are a cash welfare benefit receiver you have to be able to take a job from one day to the next,” Thorning-Schmidt said. “No one should be in a position to choose between benefits and a job.”
Thorning-Schmidt also said she was shocked to learn that so many cash welfare benefit recpients were unwilling to find work, as was reported by on the front page of Jyllands-Posten on Tuesday.
Jyllands-Posten cited a study by Denmarks Statistik and reported that 33.9 percent of women, compared to 5.8 percent of men, on cash welfare benefits said they did not want to work and while six out of seven men said they had sought employment in the past two weeks and were ready to start work in the next two weeks, only half of women had the same response.
But the figures were promptly denied by Danmarks Statistik, which argued that the figures were drawn from small studies of 250 people, not the 15,000 first reported.
“They are running a very strong story on a very flimsy basis,” Carsten Ulrik Zangenberg told Journalisten.dk. “We have never published this, so I’m disappointed that this has been represented as something Statistics Danmark has been involved in.”
While Jyllands-Posten apologised for running the story, Johanne Schmidt-Nielsen, MP for government support party Enhedslisten, said both Thorning-Schmidt and Frederiksen owed the unemployed an apology.
“The prime minister could have used one of her many spin doctors to check the story before judging the unemployed as lazy,” Schmidt-Nielsen told the Ritzau news bureau. “It’s not the prime minister’s job to conduct a bourgeois smear campaign against the unemployed.”
