Radstats: THE FAMILY POLICY TRILEMMA: THE CONSEQUENCES FOR LOW-INCOME FAMILIES IN LIBERAL WELFARE REGIMES

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THE FAMILY POLICY TRILEMMA: THE CONSEQUENCES FOR LOW-INCOME FAMILIES IN LIBERAL WELFARE REGIMES(1)

Hartley Dean

Introduction

This short paper is concerned with the policy choices faced by post-industrial democracies as they bear upon the changing relationship between paid employment and family life. It will begin by explaining theoretical accounts of the policy choices in question, before describing recent policy reforms that have taken place in the UK and reporting the findings of a small-scale qualitative study of the experiences of low-income working families in the UK. It concludes with a brief discussion of the underlying tensions that policy makers must address.

Policy choices

Although 'globalisation' is a complex and contested concept (Held et al 1999), it is generally agreed in the European context that the phenomenon is associated with at least three processes: growing social inequality, threats to full employment and constraints on the fiscal autonomy of nation states. One influential interpretation that focuses on the policy making process in advanced post-industrial economies emphasises not so much trends in international capital markets and the manufacturing sector, but the significance of domestic service sector employment (Iverson and Wren 1998). According to Engel's law, as productivity in manufacturing increases so will the quantity of services consumed: not only financial, business and technical services for the global economy, but also low productivity social reproductive and provisioning services that may be provided in the domestic public and/or private sectors (see also Jordan 1998). It is in the service sector(s) that scope for employment growth may be generated. This presents policy makers with a three-way choice or 'trilemma', whereby it is impossible simultaneously to promote wage equality, employment growth, and a balanced budget. Drawing on Esping-Anderson's (1990) typology of capitalist welfare regimes, Iverson and Wren (1998) suggest that social democratic regimes (characteristically, the Scandinavian countries) will seek to promote jobs and wage equality by expanding or maintaining high quality public services, albeit at the expense of a balanced budget; conservative-corporatist regimes (characteristically, the continental European countries) will maintain wage equality and fiscal discipline through collective bargaining, albeit at the expense of employment growth; while liberal regimes (characteristically, the English speaking countries) will maintain employment growth and fiscal discipline through privatisation and labour market deregulation, albeit at the expense of wage equality.

In the meantime, responding to feminist critiques of his typology of welfare regimes (e.g. Langan and Ostner 1991; Lewis 1992, Sainsbury 1994), Esping-Andersen (1999) has admitted that his original formulation failed to give a sufficient account of the way that state welfare bears upon individuals' relations within families as well as with the labour market. He now argues that it may be changes in the household economy that will impact most upon the future trajectory of welfare regimes, but he insists none the less that his original model can accommodate the different roles ascribed to the family as well as the market and the state.

Whereas the classic welfare state was supposedly premised on the 'traditional' male-breadwinner household, changing gender roles within households have entailed not only increased labour force participation by women, but also less stable family formations and a changing mode of social reproduction with important implications for the sustainability of welfare regimes (e.g. O'Hara 1995, Lewis 2000). It is not simply that the male-breadwinner household form may no longer be culturally acceptable, it has become economically unviable for certain families in some post-industrial societies. Families have been adapting to capital's functional requirement for flexible labour and to the realities of the service economy. Policy makers accordingly face another 'trilemma', parallel to the employment policy trilemma: it may not be possible simultaneously to promote functional families, full adult labour-force participation and restrained social spending. We might anticipate that social democratic regimes would be inclined to maximise labour force participation and family life through the promotion of extensive childcare provision and benefits for working parents, albeit that this requires high social spending; conservative-corporatist regimes would be inclined to promote family life and to moderate social spending by measures that bolster the family wage and sustain 'traditional' self-supporting family patterns, albeit that this might constrain women's participation in the labour force; while liberal regimes would be inclined to maximise labour force participation and minimise social spending through the promotion of market led economic growth, albeit that this may exacerbate the stresses and insecurities experienced especially by women and within low-income families (e.g. Wheelock 1999).

Esping-Andersen acknowledges that the limitation of his typology is that 'parsimony is bought at the expense of nuance' (1999: 71) and certainly the characterisation I have outlined does no justice to the complexity of the substantive variations that exist between actually existing welfare regimes (Lewis 1992, Siarof 1994). My purpose here, however, is to discuss the nature of the family policy trilemma in the context of a particular 'liberal' welfare regime, namely the UK.

The case of the UK

Though characteristically liberal in their economic policies, Conservative governments in the UK during the 1980s and '90s had been ostensibly prepared to sacrifice labour force participation in order to preserve the 'traditional' family, while seeking to 'transfer power and responsibility wherever appropriate from the state to the family' (Bottomley 1994). The New Labour government elected in 1997 has adopted an approach to supporting families (Home Office 1998) that pays more heed to the diversity of family forms, and is committed to enabling parents in general and mothers in particular to combine paid employment and family life. This approach is however situated in the context of a policy of 'welfare-to-work': the premise has been that paid employment is the best route out of poverty and the best form of welfare (DSS 1998). The objective of full employment has been redefined in terms of 'employment opportunity for all' (Treasury 2000: ch.4)

New Labour's declared intention, therefore, is not to switch from a liberal to a social democratic strategy, but to seek a 'Third Way' (Giddens 1998) by which it hopes to minimise inequality, maximise opportunity and employability within the labour market, while adhering none the less to 'prudence' in public spending. The assault on wage inequality has entailed the welcome introduction of a national minimum wage (NMW), albeit at a level well beneath the European 'decency threshold', and an enhanced form of in-work cash benefit, the working families tax credit (WFTC), albeit that there is evidence to show that in-work benefits can trap people in low-paid work and trap governments into perpetuating a low-wage economy (e.g. Bryson et al 1997). Welfare-to-work has entailed 'New Deal' programmes directed to specific groups - including lone parents and the partners of unemployed people - in a bid to encourage and support them through training and work experience into the labour market. The government has also sought to increase spending on education and to promote 'life long learning'. None the less, it is a strategy that does not of itself create permanent jobs, so much as stimulate labour supply and fuel competition especially for relatively low-paid/low-skilled entry level jobs in the service sector. Though welfare-to-work has been proclaimed at least a modest success (e.g. Millar 2000), there is as yet little evidence that social inequalities are decreasing (Gordon et al 2000) or that the strategy is likely to break the 'low-pay/no-pay cycle' for those at the periphery of the labour market (Stewart 1998).

In a bid to assist families New Labour has pursued two further initiatives: the National Childcare Strategy (NCS) and a drive to promote 'family friendly' employment (DTI 2000). The NCS entails, on the one hand, the provision with WFTC of childcare tax credits (CTCs) that meet part of the costs of registered childcare for lower-income working parents and, on the other, a raft of measures intended to increase the provision of childcare through funding for nursery classes in schools and out-of-school clubs for older children, and the creation across the country of childcare partnerships involving local authorities, the voluntary and commercial sectors. The impact of the NCS to date has been modest: the number of children aged 0-8 per registered childcare place declined from 7.5 in 1999 to 6.9 in 2000 (Daycare Trust 2000). However, additional future funding for the creation of childcare places has been promised (Treasury 2000).

Legislation to promote 'family friendly' employment under New Labour has to date extended little further than was minimally necessary to comply with EU directives on working hours, parental leave and part-time working. Beyond this the government had sought merely to encourage employers through its Work-Life Balance Campaign to explore, disseminate and adopt best practice. A range of proposals relating to maternity, paternity and parental leave were advanced in a Green Paper (DTI 2000) and it would appear at the time of writing some of these may be enacted following the General Election. However, the proposals represent a cautious compromise between the interests of business and the needs of families and will result in a level of provision for parents at work beneath that of most of Britain's European partners.

While welfare-to-work policies are increasing the pressure on mothers in particular to (re-)enter the labour market, there are potentially countervailing messages from government about the importance of parental responsibility, including the introduction of the Sure Start programme intended to provide intensive support for the parents of young children in poor neighbourhoods, and the creation of a National Family and Parenting Institute. Public opinion in the UK and indeed across Western Europe would seem increasingly to accommodate the reality of working parenthood (Scott et al 1998), but remains ambivalent about full-time work for the mothers of pre-school children. Qualitative evidence suggests that mothers with young children may be torn between competing expectations (e.g. Duncan and Edwards 1999).

It is too early to say how New Labour's attempt to address the family policy trilemma might fare, but in order better to understand the context into which its policies have been introduced, I now turn to the findings of a study of low-income working families recently conducted in the UK.

The experiences of low-income working families(2)

This was a small-scale qualitative study involving interviews with 47 low-income working families in South East England. Accounts focusing on various aspects of the study have been published elsewhere (Dean 2001; 2002; Dean and Shah 2002). The sample contained a mixture of two-parent and lone-parent families with varying numbers of children and children of different ages. Respondents were employed in a variety of occupations, for a variety of employers (both large and small) and in a variety of sectors (both public and private), but predominantly they were working in the service economy. The interviews were conducted in late 1999/early 2000 during the transition from family credit, an earlier in-work benefit scheme, to the new WFTC. The interviews explored the perceptions and strategies of the families in relation to the total package of resources upon which they depended and the combination of domestic, informal and informal work which they undertook. Additionally, interviews were conducted with six of the respondents' employers.

It emerged that hardly any of the families were fully in command of their day-to-day survival strategies. Less than a third said they were 'managing okay', as opposed to just 'getting by' or 'struggling'. A few could call on income from informal sources (such as undeclared employment) and some on practical support (such as help in cash or kind - including childcare) through social and kinship networks. But in-work benefits were important to their survival, even though the gains such benefits provided were often off-set by reductions in other means-tested benefits (like housing benefit), and a shortage of affordable childcare often meant the families could not benefit from the new CTCs. The most important source of childcare was informal care by relatives and kin or, more rarely, friends and neighbours (cf. Ford and Millar 1998): sometimes this was through choice, but often it was because formal childcare was not affordable. Half the sample were home-owners and those with substantial mortgages - who can receive no help with housing costs unless they become eligible for social assistance benefits (income support or income related job-seeker's allowance) - were clearly struggling in spite of WFTC.

Respondents were largely ignorant of the complex details of government policy with regard to support for low-income working families and the promotion of work-life balance, but they were generally both keenly aware and supportive of the intention that parents, including mothers, should where possible seek paid employment. There was also a strong sense that in-work means-tested benefits were preferable to out-of-work benefits, not because the former are being recast as 'tax credits' or because they can be more generous than the latter, but because they are less stigmatising: the gap that is being deliberately forged between in-work and out-of-work means-tested benefits potentially fuels the sense of insecurity experienced by low-income working families.

The greatest of the pressures faced by families in our sample stemmed from their vulnerability in the face of a precarious low-wage service sector labour market. It appeared, particularly among those working for small local employers, that parents were prepared to accept low wages and to demonstrate considerable loyalty in return for a very modest degree of flexibility in working arrangements. Additionally, some felt extremely insecure about the extent to which they were competing for low paid work with other potentially excluded workers, including (in at least one instance) illegal or undocumented workers, and this deterred them from asking for time off or for changes to their working hours, even when they were entitled to do so.

Larger employers had ostensibly well developed 'family-friendly' employment policies, but it emerged first, that these were not necessarily well implemented at a local or operational level and secondly, that they were more likely to benefit higher paid than low-paid workers. On the one hand, responsibility for implementing policies was usually devolved to local managers and often a 'macho' working culture sustained itself in spite of policy directives: some mothers reported having to leave or change jobs because of unaccommodating managerial attitudes. On the other hand, employers emphasised the importance of the 'business case' for work-life balance measures - not only in policy terms, but on a case-by-case basis. Inevitably therefore, they were more inclined to offer parental leave or childcare subsidies to valuable highly skilled workers than to expendable low-skilled workers.

Plainly, there are limits to the inferences that may legitimately be drawn from a qualitative study of this nature. None the less, the research was able to access frank accounts from a variety of low-income families and to obtain new insights into the ontological insecurities to which they may be subject. The findings suggest a number of potentially fruitful lines of future inquiry for quantitative investigators and the analysts of secondary data, both with regard to the dynamics of low-income families' experiences in relation to the labour market and, for example, to the substantive practices of different kinds of employer across the low-wage service sector.

Conclusions

What I have identified as the family policy trilemma is evident here in a number of tensions. First, there is a fundamental tension between on the one hand policies that perpetuate a low-wage economy and on the other the New Labour government's stated intention of ending child poverty (DSS 1999). The government acknowledges that, when it comes to enabling employees to combine paid work and family responsibilities, 'best practice is unlikely to permeate the whole economy and frequently does not reach the lowest paid' (DTI 2000: 6), but it neither links this problem with the consequences for the alleviation of family poverty, nor is it prepared to legislate to create the regulatory powers that might redress the problem.

Secondly, there is very clearly a tension between the New Labour government's desire to appease private business interests as a means to secure a private sector contribution to employment growth and its wish to protect the interests of families and family life. While the government argues that indeed there is a business case for making sure that the skills of women, when they have children, are not lost to employers and to the economy, it is reluctant to legislate for fear that statutory regulation might 'undermine best practice or stifle innovation' (DTI 2000: 6). It even seeks ways of exempting small employers from the effects of such legislation as is contemplated, notwithstanding that it is small employers that dominate the most peripheral extremities of the labour market. In the absence of any significant attempt to reverse the legislative disempowerment of the British trade union movement that occurred during the 1980s, there is little prospect of any countervailing political pressure to that of the business lobby.

It must be concluded that under New Labour the UK remains primarily a liberal welfare regime that is concerned to promote job growth through supply side measures that increase competition for low-wage jobs largely in the private service sector. It is unwilling to create service jobs in the public sector since this would risk unbalancing the budget. It is reluctant to regulate private employers in order significantly to raise wages and/or to impose 'family-friendly' employment practices since this might impede job growth. It is the security of families - and especially low-income families - that is effectively jeopardised by this strategy. There is significant social spending to support low-income working families both through the NCS (the full potential of which has still perhaps to be realised) and through the WFTC, which does redistribute income to the lowest paid, albeit subject to a means-test.

The WFTC, however, also serves as an indirect subsidy to employers. In the British context, in-work benefits had been tried and rejected once before. The 'Speenhamland' poor relief system introduced to parts of England in the eighteenth century had sought to supplement the incomes of farm labourers in order to ensure they could feed their families at a time when wages had dropped below the cost of living. This was roundly condemned by laissez faire economists of the age, who complained it distorted the functioning of a free labour market, and in 1834 it was swept away in favour of the draconian workhouse regime instituted under the Victorian Poor Law (de Schweinitz 1961). Ironically, perhaps, in the age of global capitalism in-work benefits are now held to represent an incentive rather than a disincentive for low-skilled labourers and they are supposed to allow low-paying employers to compete more rather than less fairly than they might otherwise have done. This method of subsidising employment is preferred to the creation of better-paid and better-protected jobs in the public sector, presumably because of an ideological resistance to an extension of the public sector.

It is unlikely, however, that any ideological intention attaches to the tendency that may be speculatively inferred from the study described above, namely that the combined effect of strong 'welfare-to-work' and weak 'work -life balance' measures will be to fuel class inequalities between families. There is a distinct likelihood that such advantages as formal childcare provision or subsidies, career breaks and time off work may all be available to secure middle-class working parents, while working parents with few skills to offer may remain dependent upon informal childcare and minimal concessions granted by reluctant employers.

At the heart of the family policy trilemma lies the ideal of working parenthood. This implies the prevalence of dual earner households on the one hand and working lone-parent households on the other - or, using Lewis' (2000) term, an individualised adult worker model. The model - though it comes no nearer to the complex realities of family life than the male-breadwinner model ever did - is capable of attracting some complex and unusual political alliances. It embodies a principle that elevates formal freedom in the labour market above 'traditional' family values and is potentially attractive to liberal feminists, libertarian socialists and neo-liberals, but unattractive to welfare feminists, 'ethical' socialists and neo-conservatives. It also creates an arena in which class and gender interests intersect since it involves a potential trade off between gendered relations of dependency and capitalist relations of exploitation. Policy makers plainly cannot afford but to address the changing interface between the labour market and the household economy, but the test for any welfare regime will be the extent to which it can effectively ensure security for all working families, in spite of the vicissitudes of the service economy and the demand for fiscal restraint.