Half of jobless refuse work paying less than benefit

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Around half the unemployed will turn down work if it leaves them worse off than being on benefit, a new study published yesterday suggests.

But the work ethic remains strong: almost a quarter of the unemployed take jobs knowing that they will be worse off as a result.

The study shows that money is far from being the only consideration when people decide whether to take a job or remain on benefit, the authors conclude.

"The picture is much more complicated than the simple view that financial incentives alone decide whether people take work," Janet Ford of the University of York's Centre for Housing Policy said. "They do predominate, but not in every case."

The wage aspirations of the unemployed were modest. Main breadwinners were usually looking for net earnings of between pounds 130 and pounds 160 a week, or had taken jobs paying that amount. For most that only just covered their bills, food and clothing, leaving them little better off than on benefit.

Home owners with mortgages were most likely to work out what they needed to live on but still take jobs which paid less than their outgoings - a course which left them at greater risk of poverty and debt, as there is no in-work benefit to help owner-occupiers with housing costs.

Many tenants assumed they had to meet housing costs in full once in work, when in fact housing benefit helps. But the study casts doubt on the effectiveness of the in-work benefits which are increasingly being used to underpin low-paid jobs.

Half of those eligible for family credit and housing benefit - the chief in-work benefits - were not claiming them. Reasons given included difficulty in claiming them in the past, a strong desire to be free from benefit, the "hassle" of claiming, and the belief that work should pay a living wage.

The findings suggest that recent rises in rent and therefore benefit levels do not necessarily increase work disincentives. "However they greatly add to the risk that those taking low paid jobs will find themselves no better or even worse off," Ms Ford said. And further increases might alter the decisions in favour of not working.

Into Work? is available from Joseph Rowntree Foundation, 40 Water End, York YO3 6LP

More than 4 million people are out of work - twice the number officially unemployed, according to analysis of government figures published yesterday, writes Barrie Clement.

Many of the "economically inactive" are members of an underclass which is three times the size it was 20 years ago, and whose members have given up looking for work.

On examining official data, the left-leaning Employment Policy Institute found that 19.1 per cent of households have no working adults, compared with 6.5 per cent 20 years ago.

The Government statistics show that 4.5 million individuals of working age lived in workless households in 1994, compared with 1.2 million two decades previously.