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Who pays for the free lunch?

July 19th, 2011

Changes to the law which require work in return for welfare payments, are sharply criticised by left-leaning commentators. They suggest that the requirement is inhumane, and predict that the planned public work programme will prove costly and inefficient. A right-wing pundit writes that Hungary has no choice but to abolish unconditional benefits, because of the economic crisis. But a liberal journalist also welcomes public incentives which promote self-reliance.

As a result of recent amendments to the labour code, from September the period for which unemployment benefit can be paid will be slashed from 270 to just 90 days.

After three months, the unemployed will have to participate in public labour projects, such as the construction of football stadiums, dykes and dams, to be eligible for further state support. An unemployed person will no longer be able to turn down a job offer far from his or her home, if accommodation is provided by the state. Local councils will also be allowed to withhold benefit from unemployed people who live in squalor – a move widely regarded as an attempt to persuade Hungary’s large Roma population to make more efforts to keep their homes and yards tidy.

The real cost of public labour

In the left-wing daily Népszabadság, Attila Szabó Kapitány accuses the government of “reviving the tradition of labour camps. But “labour camps are expensive,” he adds, and “ to provide accommodation for public workers may cost billions, if the government really intends to provide humane conditions.”

As the new law requires only part-time employment, workers engaged in public work programmes may receive significantly less money than their current benefits, Szabó Kapitány remarks, and adds that those who provide barrack accommodation and construction tools may benefit from large-scale public projects.

As for the quality of the work they will actually be able to perform, the left wing commentator doubts that those who cannot find jobs at the moment will be able to reach high standards on public works in future.

Incentive or stigmatization?

In a commentary on the same subject, the leftist Népszava suggests that the right-wing government is “transforming labour issues into policing matters” with its new labour code. The daily refers to previous announcements of the government that retired policemen will be employed to supervise public works schemes. Népszava suggests that the new law creates the impression that people living on welfare are unemployed because they are too lazy to work.

Gábor Tamás writes in the left-leaning Magyar Narancs that Hungarian food producers may  face labour shortages if the unemployed start working for their welfare benefits. According to the statistics, approximately 300,000 to 400,000 benefit recipients perform temporary work on the land to add to their meagre welfare payments. The new labour code may create a situation in which there is no one left to pick fruit and vegetables. Labour costs will increase and foreign workers may also be needed in rural areas, Tamás concludes.

“It is not at all clear whether the government really wants to encourage welfare recipients to work, or just wants to threaten them,” Balázs Romhányi, head of the Budgetary Responsibility Institute, says in an interview in Magyar Narancs. “Does the government really want hundreds of thousands of people to clean streets and build stadiums with non-21st century methods? Or does it want to push the unemployed to find work?” Romhányi believes that even according to the government’s own most optimistic estimates, there is little hope that there will be sufficient growth to create enough jobs for those currently unemployed.

There is no free lunch

“The more absurd the criticism, the more inclined I am to trust the new public labour code,” writes Gábor Borókai, editor-in-chief of the right-wing weekly Heti Válasz.

Borókai admits that the success of the new policy is far from certain. There is no guarantee that it will “provide the 300,000-400,000 Hungarians currently applying for benefits with meaningful activity,” nor that the work carried out by them will be of acceptable quality. But he dismisses suggestions that the jobless ‘will be sent to forced labour camps under police supervision’ as “out of touch with reality.”

Instead of fear-mongering, “it should be made clear that public money paid to those who are unable to find jobs needs to be earned by someone else. So it is desirable that they find work as soon as they can. Both reason and financial necessity demand nothing less, in a country drowning in debt and bedevilled by economic crises.”

State incentives are not illiberal

Right-wing commentators are not completely alone in supporting the public work projects. “In a liberal democracy there is nothing wrong in expecting some public work in return for benefits, or making welfare payments conditional on sending kids to school,” László Seres suggests in Hírszerző.

According to the liberal blogger, by applying such constraints, the state is trying to force the unemployed back onto the labour market and make them more independent in the long run. He criticizes human rights activists and social workers who find any kind of state intervention unacceptable which aims at driving individuals towards self-reliance, and who consider state incentives to increase individual responsibility as the malign initiatives of the middle classes “who are unwilling to confront poverty.”

“By expecting nothing from those who receive benefits, we send them the message that they are left on their own. The complacent insistence on ‘rights’ and ‘freedoms’ implies the entrenchment of their status and is paramount to leaving the homeless in the tunnel. After all, they have a right to be homeless, don’t they?” the liberal analyst concludes.

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