The New Deal Gets Britain Off The Dole

The sign on the brick building just off Clapham Common in South London says "Maritime House." There are no ships or sailors in sight, but the newly revamped quarters of the Jobcentre Plus are a refreshing change from the usual grungy and sometimes intimidating British unemployment offices. The colors are bright and cheery, and case officers sit at desks arranged in an open plan, rather than behind plexiglass windows. "It definitely looks better," says Susie, a 24-year-old medical office temp searching for a higher-paying job. "It was depressing the way it was."

She was scanning through a menu of jobs on an EDS (EDS )-supplied console. Among the positions on offer: a pawnbroker's assistant at $17,000 per year and a truck driver at $524 per week.

Scintillating stuff? Hardly. But jobs nonetheless -- jobs for Britons who might otherwise find it hard to enter the workplace. The new welfare centers are the latest gambit in Prime Minister Tony Blair's war on unemployment. The government is plowing $3.4 billion into the centers, which will eventually number 1,000. Since taking power in 1997, his Labour government has launched a flurry of programs under the New Deal banner aimed at putting the unemployed to work. "Long-term unemployment is damaging to the economy and to the individuals who suffer from it," says Jonathan Portes, Deputy Director for Strategy at the Department of Work and Pensions. "We want to end it by ensuring that people have a responsibility and an opportunity to work."

Blair can claim substantial success in his quest to get Britons off the dole. Unemployment, as defined by the International Labor Organization, has fallen from 7.2% in 1997 to just 5%, the lowest among the G-7 countries. No wonder the job centers have received a steady stream of visitors from the Continent, including Germany's Economics & Labor Minister Wolfgang Clement, who stopped by one in southwest London in June.

Britons age 18 to 24 were one of the first groups targeted by the New Deal. The government has put out the message that it will no longer stand for young people sitting at home and collecting welfare benefits without making any serious attempt to look for a job. Those receiving benefits are now required to stop by one of the employment centers for advice on what type of jobs might suit them and to brush up on skills such as filling out applications. If the candidate doesn't find work within four months, he or she is given a choice of training schemes or work assignments. To stimulate job creation, the government offers subsidies to companies that hire New Deal graduates.

There is no denying that long-term joblessness among British youth has been virtually eradicated. But a lot of credit probably goes to the strong economy. Howard Reed, co-author of a recent study on the scheme and an economist at the Institute for Fiscal Studies, a London think tank, thinks that the New Deal is adding about 17,000 jobs for youths per year. He found that young people who participated in the scheme were 11% more likely to get jobs than those who did not.

Britons who have landed work through the New Deal give it a rousing endorsement. Heidi Samaras, a 34-year-old hairdresser and mother of two from Banbury, northwest of London, who was stuck on welfare for more than two years, recently received $510 to buy clippers and brushes and set herself up as a roving hairdresser. Now she is making $255 over the course of a 16-hour week, plus she receives a $680 a month subsidy for working. "They've been fantastic," she says of her job-center advisers. "I wouldn't have known what to do." Britain's welfare-busters are on a winning streak.

By Stanley Reed in London

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