The myth of 'us' and 'them' why we all need the welfare state
Transcription from https://www.youtube.com/watch?v=IZU0zfA4E9I
There are two classes of people in the world: those who divide people into two classes and those who do not. Robert Benchley
Professor Peter Whiteford, Sociologist Australian National University
Good afternoon. Some time ago I read the American writer Robert Benchley who remarked that the world can be divided into two sorts of people: those who divide the world into two sorts of people and those who don't. There's a lot of stereotypes around about all sorts of different things but in Australia recently some of those common stereotypes have been about our Welfare State, so what do I mean by the Welfare State
The Welfare State is all of the programs and policies that we have to protect people at different stages of their lives
So they include things like: hospitals and Medicare (assistenza sanitaria pubblica) services for the frail aged services for people with disability and a wide range of Social Security payments so o Age Pensions, o disability pensions, o payments for carers (badanti) and parents, o payments for children o and also payments for the unemployed Now some of those programs are very popular but when you add them all up they account for more than half of what all levels of government spend in Australia, so they're the biggest set of items that the government provides and as a result they also account for about half of all the taxes we pay. As I said some of those programs are very popular but some are less popular so we all like Medicare and most of us seem to be in favor of Age Pensions, but in particular payments for the unemployed and payments for people with disability and some of the other payments, we often see them as
“them” versus “us” Now in different countries different people have described to them and us in different ways, in the United Kingdom media have talked about strivers versus skyvers some politicians in the United States have spoken about makers versus takers, it's interesting they like to rhyme in both those places. In Australia we've often had debate about lifters versus leaners and also about taxpayers versus beneficiaries,
it's the idea that the world can be divided into two sorts of people into the essentially the worthy and the unworthy
A lot of this is based on a misunderstanding of both the purposes of these social programs and how they're actually distributed. As I said we often have a lot of stereotyping, of people who are unemployed, the most common stereotype is that they're not actually looking for work. There's also people on Disability Support pension and one of the most common stereotypes is that actually they're not really people with disability.
One of the most amazing front pages of a newspaper in 2014, at beginning of 2014, this was literally (proprio, veramente, per davvero) the front page picture, which compared two images of a queue of young people on the left-hand side and a pretty iconic picture, for those of us who above a certain age, of a wounded soldier being helped in New Guinea.
Basically it pointed out that in New South Wales in 2014 the number of people who are on a Disability Support pension was nearly the same as the number of people injured in the Second World War. Now statistically this is actually sort of like comparing apples and pineapples. It's not a valid comparison, I won't go into why, particularly, but I'm having to talk to people about it later, but the main thing is that .. well ‌ what happened afterwards is the press council criticized ‌ had an adverse judgment against the newspaper not on the ground of statistical sloppiness but on the grounds of not being an accurate depiction of what was happening in many people's lives. The other thing .. I'm not sure you'll be surprised if I point out that the people on the left-hand side of this picture are not actually Disability Support pension in New South Wales, they're not actually in Australia: it's a picture of Swedish University students but thought the purposes of the comparison it served the editors of the newspaper. But
why do we have welfare provisions including Disability Support pension? Now there are a number of reasons for welfare. I'm going to talk mainly about the first two. 1. there's the life course … it's been referred to earlier today …
2. there are risks that people have in their lives 3. social programs are also actually an important aspect of economic management 4. and of course they're also about reducing poverty and inequality. Now everyone in this room, and in fact everyone in the world, and indeed everyone who ever lived, has at least one thing in common: we all started off life in the same way, we all started off life in a situation of complete vulnerability, we're all for quite a number of years dependent on our parents We all started off and for most of us, not for all of us, our lives also end in vulnerability. life in a situation So at the beginning of our lives and at the end of our lives, we have these pretty predictable periods of complete when we're going to need the support of other vulnerability people. The length of time that people need support “…” in childhood has increased over time, as young people spend more time in school and education and of course lots of people are living longer. it's one of the great
achievements of the 20th century, but more people were living to become frail elderly. Now these life course the life course is predictable, as I said, we know in advance that we're going to have these periods of predictability, but what's unpredictable are risks, now risks have been around, again, since the beginning of human history so we have natural risks, and we've seen some, we have them today so like hurricanes and cyclones, tropical storms, earthquakes, we’ve a fires, floods and famine (carestia), so natural risks have been a part of human life since before we formed societies, but in addition as we industrialized particularly, the 19th century onwards (in avanti, in poi), we created new risks. Our societies became a lot richer but they also had new risks as we built factories, there was always a risk of being injured on a farm but we created the risks of being injured in the factory. We also created unemployment: unemployment exists when we have advanced labour markets, when we have people who spend most of their lives, well a lot of their working lives, in paid work. What So we have these new risks and in fact over the course of the 19th century different societies, as they got richer, developed mechanisms to deal with those risks. So the 8-hour a day, as we that has just been referred to, the eight-hour day was basically invented in Australia in the 1850s, we were the first jurisdiction to have the eight-hour day, and over the course of the 19th century old-age pensions were introduced first in parts of Europe, Societies but Victoria and New South Wales and New Zealand were developed also pioneers, so we developed these mechanisms to deal with them, to deal with risks. mechanisms
We also created unemployment
Now what we also have, as I said, is the life course. If we look at the distribution of spending across the life course these are estimates by people who at the time when they
to deal with those risks
did it were at the ANU (Australia's National University) but are now at the University of Melbourne, this is an estimate of social spending by years of age. It's not in total how much gets spent, it's the average amount per person, so you can see that it starts off with a bump in the early years, mainly because we have childcare, we have primary school and secondary school and then universities and TAFE s (technical and further education)- and then it's flat over the course of most people's working lives, but it starts to increase significantly after the age of 65. Now on average if you're a hundred years or over we're spending about $75,000 a year per person aged a hundred years and over, there are only about three and a half thousand people over the age of hundred years in Australia but we're spending about significant numbers on people under the age of one, they're about three hundred thousand people babies before the age of one, so in fact we spend a lot more at early ages than we do at older ages but that's going to change over time as the population ages. Now if you did a chart of taxes by age what you'd find is the opposite of this, you'd find that we pay taxes during our working lives, and obviously children and people over 65, don't pay that much in income tax but they pay GST (Goods and Services Tax - imposta su beni e servizi) but of course the important thing is that children grow up and when they get jobs become taxpayers and people over the age of 65 also used to be taxpayers during their working lives. Now as I said there are a range of risks that just as we need to look at the distribution of spending across the life course, to understand the nature of risks we need to look at what happens over time and we need to follow people through time in order to assess the likelihood (probabilitĂ ) of risks. This is a series of snapshots of a boy and a young man from the age of six to
seventeen. Those of you who have seen the movie, boyhood, will know this is in fact a series of stills (fotogrammi) from that movie. This is actually the same person who was filmed over 12 years, so he was an actor but they kept coming back to him year by year to make the movie. So there are certain sorts of statistics that essentially are movies. So in Australia we have a survey since 2001, that's called HILDA: it's the Household (famiglia) Income (reddito)and Labor Dynamics in Australia survey, and what it's done is it's followed people in about 7,000 households, every year since 2001. Every year it goes back to these people where they’re asked about their income, they’re asked about their earnings, their hours of work, they’re asked about their health, they are asked about their wealth and a whole range of other things. So if you were 25 year old at the start of the survey you'd now be over 40, if you're a 50 year old you'd probably now be receiving an age pension now. When you follow people over time you get a very powerful picture of what happens in people's lives. Now when you do that, you find, as you f ollow people over time there're some good news and there’re some bad news. First the bad news: everything that can go wrong in people's lives is more common than we think, over the time. The good news is: it's less intense than we think, it doesn't last as long. Now what happens is that people experience periods of illness or injury, they experience unemployment. In Hilda if you were, over the first 10 years something like 40% of individuals experience a serious illness or injury and about two-thirds of house
people also have a member of their immediate family or a close friend who experiences a serious illness or injury. When you look at the labor market you find that the risks are even more common. We often think about the unemployment rate, the number of people who are unemployed each month, at the moments between 700,000 and 800,000 but over the course of a year there's something like about two million people in Australia who experience a period of unemployment. There's about 4 million people who have a change in their labour market status, either they move from part-time work to full-time work or vice-versa or from unemployment to employment or vice versa. Now when people’s circumstances change, their incomes change and that's when the Social Security system comes in. Now again when you look at the Social Security system, what you find is that over time you get a very different picture of how many people are affected by Social Security.
So if you look at the left-hand side of this chart, in the, if you take the number of people who on the 30th of June are receiving a Social Security payment in 2015, amongst working age people, that below the age of 65, it was about one person in six, over the course of the year about one in three households have somebody, contained somebody, who were receiving a Social Security payment.
Now Hilda, as I said, has been going for about 16 years, in the first nine years of the survey two-thirds of households in Australia included somebody who received a Social Security benefit at some stage. This is an age pensions and it's not family payments, it's unemployment payments, youth payments, disability payments, and carers payments. The most recent survey came out earlier this year and follows people over the first 15 years and you can see the percentage goes up to about 70 percent. So the longer this survey goes on, the more common this is going to be. Now the reason is, as I said is that things change in people's lives now the stereotype we have of people on welfare is that they’re long-term welfare dependent they're “them�. What you can see is if you if you look at this this survey the proportion of people who stayed on welfare and got virtually all of their income for nine years is 1.2 percent of the population so between the two-thirds or with a seventy percent who pass through and the 1.2 percent who stay on welfare for a very long period of time there's enormously complicated patterns which have to do with the enormously complicated patterns of people's lives. Now what that means is that the idea of them and us is in fact we're all them, right? You know this is going to happen to the vast majority of us over our working lives. The American economist, he won a Nobel Prize for economics, Paul Krugman described the American government as an insurance company with an army on the side, that essentially is what most modern State are: insurance companies with an army on the side. The reason why we need to move beyond the myth of them and us is that actually we're all in the same boat, we're all in this together.
We're all in the same boat we're all in this together