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Triple premium for chasing away unemployed

30 January 2007 - The Fourstar company in some cases gets paid three times for supporting job seekers. In addition, work programmes for the unemployed do not connect well to the labour market. This is the conclusion of the Amsterdam Accounting Office in a very critical report on the Municipal Work and Income Department (DWI).

Fourstar manages to get paid additional premiums by referring jobseekers to Workstar, a subsidiary of the same company. In specific cases, the municipality even pays the company three times to help one and the same unemployed person find work: “€800 to Fourstar for a labour market qualification, €1.200 to Fourstar for a placement in Workstar and €3.000 to Workstar for placement in a regular job”.

Fourstar is mainly known for the so-called ‘work first’ work programmes, which make the unemployed perform simple tasks such as tagging or packaging. According to Workstar, this provides them with relevant work experience: there would be a demand for the ‘packaging and repackaging skills’ they gain in their work.

However, many participants call the work pointless. The Accounting Office agrees: the programme ‘largely fails to connect to the labour market’. The DWI as well more or less acknowledges that the programme is not intended to teach participants skills, but mainly to discipline them and to discourage social assistance take-up.

Earlier, the Bijstandsbond (an organisation of social assistance recipients) criticized Fourstar, because it would use the unemployed to earn money in an opportunistic way. The Bijstandsbond not only pointed to the use of subsidiaries, but also to the fact that job seekers were used to change vacant buildings into classrooms for Fourstar.

In addition, labour conditions would be unsafe. A participant in a work programme lost the tip of his thumb in a saw accident. The programme was later shut down by the Building Inspection Department because of fire hazard.

The Accounting Office report deals with all the municipal work programmes, which encompass much more than just the Fourstar programmes. In sum, the municipality would pay on average 17,000 euro for every social assistance recipient that is provided with a regular job. This equals the costs of one and a half year’s benefits. Of the participants, only 11% find work.

The City Administration has promised to adopt the majority of the report’s recommendations. The Accounting Office still has its doubts and advises the city council to ask monitor the administration critically. In a response to the report, Piet van der Lende of the Bijstandsbond says that the ‘failure of the present policies has been duly demonstrated’.


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