The Concept of Social Security Stems - Essay Example

How the Social Security System Encourages Dependency The welfare is generally seen as an that redistributes wealth to its people. There are two major forms of wealth redistribution in a state. First, there is the indirect redistribution in the form direct taxes and indirect taxes levied upon its citizens. The second mode of redistributing wealth to its people is the direct assistance to it people. Social security benefits are considered as one of the best example of redistribution of wealth in a given country. There are a number of reasons why a government provides social security services to its people. First, social security is a form of relief from poverty. In the event where a person losses his or her job, the state shall come to its rescue by providing replacement income. The second reason why a government would provide social security is that it is a means of social protection. Not only will the social security system provides protection against poverty, it gives a person some peace of mind that he or she will not suffer from deprivation in the event where he or she gets sick or losses his or here job. The third reason why social security is provided is that it is a means of redistributing income back to the people. People who have less or have inadequate income can benefit from this system. The very concept of social security stems from the idea of mutual cooperation between the government and its citizens. As part of the commitment of the government to protect its people, the social security system in but a transitory thing where people gets assistance while they get back into their feet after they fall into “bad luck”. Although the concept of social security is a noble idea that is supposed to help people instead of making them dependent on the system, there instances in the past as well as in our present society that would lead us to believe otherwise. Government records on social security would tell us that there are a growing number of people in the United Kingdom who are becoming government dependents. To prove this point, let us look into the activities in the areas of employment and social security from 1997 to January 2006. Between 1997 and 2001, the unemployment rate of the country fell from 7.2% to 4.9%.1 However, in the next five years that followed this progress, there is no significant change or improvement in the unemployment rate of the country. Where there is no increase or decrease in statistics, we can safely conclude that there have no significant improvements during these years in terms of employment. Considering the number of people who are supposed to join the workforce after finishing school within this period of time, the stagnation of the rate would reflect negatively on the overall scenario of the time. In fact, many observers would say that development plateau in the succeeding year before a slight increase in the unemployment rate is notices between November 2004 and January 2006. During this time there is an increase in the unemployment rate from 4.6% to 4.7%.2 Where before the unemployed people in the United Kingdom have been approximately 1.4 million between the years 1997 to 20013, it ballooned into 1.41 million with an increase of 22,000 individuals between the years 2001 to 20054. What is more significant in this slight increase in the employment rate is that studies showed that where before there is a greater number of women who leave the workforce during their child-bearing years, now there is almost an equal number of men and women who leave the workforce at their prime age of 25-54 years old (Faggio. G. and Nickell S 2003). According to studies, there are a number of reasons why there is a marked increase in men who leave the workforce during their prime years (Faggio. G. and Nickell S 2003). One of the reasons cited is that more men are now pursuing higher education. Howe, the overwhelming reason why there is an increase in men and women who leave the workforce during their prime years is that they have some long-term illness that prohibit them to engage in some productive undertakings such a career or a job (Faggio. G. and Nickell S 2003). This really alarming to see since this is a clear sign that somehow, people see the social security system as a milking cow to support them for a period of time. In terms of income replacement, such free income is very attractive to some people that they will tend to stay as social welfare beneficiary for as long as possible. It is common for people nowadays to rely on their “replacement income” for the maximum period of time allowed by the government since it is very tempting even if the income replacement rate lower than the previous income enjoyed by the beneficiary, most beneficiaries would still want to stay as beneficiaries of the program since it is very convenient for them. This is the reason why more and more people are reluctant to get back into the workforce immediately after they have lost their jobs. What is more alarming than the fact that there are more and more people who are not in a hurry to get back into the workforce is the increasing number of people who are claiming for incapacity Benefit. Since May 1997, there is a noticeable extra 32,000 individuals who are on welfare who claim under the Incapacity Benefit (IB) bringing the overall total number of people who are dependent on the government to 2.1million5. From that time until the year 2004, there have been great increases in the number of people who are claiming Incapacity Benefit. In a study conducted in August of 2004, the number of claimants has significantly increased to approximately three times the number of claimants since 1997.6 As the number of people who are claiming Incapacity Benefit increase, many sectors begun to question the validity of such situation. In the past years, the healthcare system of the country have improved greatly that more and more people are becoming healthier. The fact that more and more people are claiming Incapacity Benefit each year would lead us into thinking that people might be abusing the system. Proof of the contention that people are abusing the system is that more and more young people are now claiming Incapacity Benefit as compared to the past when most of those people who claim under this provision are older men (Cackett and Green 2005). Another proof that people may be abusing the system is that there are an increasing number of people who are claiming Incapacity Benefit due to mental disorder7. One could not really help but wonder if such claims of being mentally incapacitated is really true considering that it is often very difficult to a physician to really determine as to whether or not the person is really mentally incapacitated or simply pretending to be. On the other hand, the increasing number of lone parents in the country has been the cause of concerns over the years. A good number of these lone parents are now relying on the social security system on child benefit (Gregg, P. and Harkness, S 2003). In 1998, the government introduced the New Deal for Lone Parents (NDLP), which is a voluntary program available to lone parents who are working less than 16 hours a week (Gregg, P. and Harkness, S 2003). Although there were about 769,000 individuals who participated in the program by December 2004, only about 47% or 365,000 individuals who found work through the program (Cackett and Green 2005). There are no data available as of now on how many of those lone parents who found work were able to land a long-term job. However, according to experts, it is estimated that the majority of those lone parents didn’t really find long-term work and went back into their old status as government dependents. The concerns about dependency actually reach down further into the whole system. There have been many discussions about how our welfare system has encouraged dependency of people to the government. By nature, people always respond to incentives. When the government increased the Incapacity Benefit to beneficiaries, more and more people fund good reason to stay under the welfare system. Why would they need to work when they can actually earn more money and not really do any hard by simply staying under the social security program? The increases in the out-of-work benefits contribute a lot as come on for people to become social security dependents. Note that from 1997 to 2004, there has been considerable increase in out of work benefits. Where before, the average out of work benefit have been £58, now it have increased to an average of £918. In the case of lone parents, there is also a significant increase in benefits from £79 per week in 1997 to £114 per week in 20049. In effect, we seem to be tolerating people who want to stay in the welfare system by providing them incentives to stay that way. Accordingly, there are two main causes of dependency in the social security system, first is bad luck and second is foolishness (Oliver, 1999). Although people really don’t have any control over he fact that they have misfortunes, people do have some control on their attitudes. The social security system of the government is not intended to support a person for a lifetime simply because he or she does not want to go back to work. On the contrary, the social security system aims to help the person go back into the workforce by helping him or her over the rough spots so that he or she could get back on his or her feet the soonest possible time. Although the intention of the English social security system may be based on sound reasons of cooperation and income redistribution, one cannot help but think how much it has promoted dependency on the government. Whether consciously or unconsciously, the government is actually promoting a misery among people who are benefiting from the welfare system. Note that by giving incentives to those who are unemployed, the single parents and those claim to have permanent disabilities, we are in fact encouraging people to leave the workforce and simply live off on what the government could give them. Such situation is not only detrimental to the economy but also dehumanizes the person who falls into such trap. Why would dependency dehumanize the person? You must understand that people who are on welfare is accepting the fact that her or she is unable to support her or himself. Such undignified admission of incapacity to provide for him or her self is actually an ingredient to misery. The more you tell yourself that you are unable to do something, the more that it will come true and would eventually cripple you emotional and mentally. On the part of the children, the fact that their parents are not working has some negative connotations. The lack of a role model in the home who is working and earning to keep the family economically sound would give a negative message to the children. As such, there is a big possibility that the children would begin to see the government as a source of free income and support. This is not really a healthy attitude and it will eventually lead to some negative impacts sooner or later. Although there have been reforms instituted by the government on the social security system, there are still many ways that such free support to people who are having “bad luck” or those who are just simply indulging in foolishness can be abused. Although many people may not have realized it, the abuse of the system in will not only lead into several negative impacts on the government coffers but also in a state of misery for the person who is abusing the system. As Henry Ford once said, “the recipients of charity are usually destroyed – for once you give a man something for nothing, you set him trying to get someone else to give him something for nothing.” (Ford 1930). The same sentiment was echoed by Octavia Hill when she said that “the lavish and sudden rush of ill-considered gifts . . . is deadly. It is the cause of a steady deterioration of character pitiable to watch” (Whelan 1998). It is therefore such a pity that a thing that started out as something which is really intended for the good of people have been misused by some people which resulted to their own harm. References Books and Journals 1. A B Atkinson, (1995), The welfare state and economic performance, in Incomes and the welfare state, Cambridge University Press 2. C Pierson, (1991), Beyond the welfare state, Cambridge: Polity. 3. Cackett, B. and Green D. (2005) Work and Benefit Dependency since 1997 4. Faggio, G. and Nickell, S., (2003) ‘The rise in inactivity among adult men’ in Dickens, R., Gregg, P. and Wadsworth, J. (ed) 5. Gregg, P. and Harkness, S., (2003) ‘Welfare reform and the employment of lone parents’ 6. Henry Ford with Samuel Crowther, Today and Tomorrow (1930) Cambridge, Mass.: Productivity Press 7. Oliver, Daniel (1999). Let us not Promote Dependency. The Freeman Vol. 49 No. 11 Foundation for Economic Education 8. Quoted in Robert Whelan, ed., Octavia Hill and the Social Housing Debate: Essays and Lectures by Octavia Hill (London: Institute of Economic Affairs, 1998), pp. 93, 116. Websites 1. http://www.statistics.gov.uk/downloads/theme_labour/LMS_FR_HS/WebTable09.xls; view historical data set: figures for March-May. 2. http://www.statistics.gov.uk/pdfdir/lmsuk0305.pdf 3. http://www.statistics.gov.uk/downloads/theme_labour/LMS_FR_HS/WebTable09.xls; view historical data set: figures for March-May. 4. http://www.statistics.gov.uk/pdfdir/lmsuk0305.pdf 5. http://www.statistics.gov.uk/statbase/tsdtables1.asp?vlnk=lms; Select FR13, then select BEBN: LFS: Econ Inactive: Long Term Sick: UK: all: 000s: SA and follow the links. 6. http://www.dwp.gov.uk/asd/asd1/ib_sda/ib_sda_qtly_aug04.xls 7. http://www.dwp.gov.uk/asd/asd1/workandpens/2004/Individual_Benefit_Statistics.pdf 8. http://www.dwp.gov.uk/asd/asd1/workandpens/2004/Individual_Benefit_Statistics.pdf; Section on Individual Benefits: Income Support. 9. http://www.dwp.gov.uk/asd/asd1/workandpens/2004/Individual_Benefit_Statistics.pdf; Section on Individual Benefits: JSA. Read More