I know anecdotally that our lending has a much wider impact than just the economic one which arises from creating a new business and getting someone out of the benefits system (using a recognized economic impact tool, the impact is ten times the funds we lend). For example we know that even if a business doesn’t work out for our clients, they are usually in a better position to move forward and often find jobs when they had previously struggled. We have also seen improvements in well-being generally both for them and their families, even when, at least initially, they may not be financially better off. Measuring these other impacts is a challenge so I was pleased to see some proof that a strategy of enabling people to change things for themselves rather than offering programmes of help is a good thing in other studies outlined in “Good Economics” by Abhijit V Banerjee and Esther Duflo.
In this book they talk about the importance of dignity and agency in turning things around for people who are unemployed and poor. Research in the US has established that one of the reasons why many Government programmes intended to help the unemployed into work are not taken up is that people are suspicious of handouts and don’t want to be patronized. We have found this too.
One example of good practice studied, from France, is ATD Fourth World, an organization which is run by people who have experienced extreme poverty, many of whom are still poor. It has become a sophisticated voice for the poor and the issues they confront, and has achieved this by valuing and listening to the contributions of everyone. One of the businesses ATD have started is in the east of Paris – Travailler et Apprendre Ensemble which provides people in poverty with jobs, but in a way which enables them to work through and round any difficulties or issues they are facing, and continues to support them. It has proved effective in enabling people to turn their lives around because, according to the chief executive, instead of giving them things or money, it is asking them to contribute.
The founder of ATD (a French Catholic priest) believed that “extreme poverty is not the result of the inferiority or inadequacy of a group of people, but of systemic exclusion. Exclusion and misunderstanding build on each other. The extreme poor are robbed of their dignity and agency.” In lending people funds to start a business, Purple Shoots is giving agency to its borrowers and its self-reliant group members which enables them to use the skills and talents they already have to build a better future for themselves. This is in contrast to how they have often been treated in the past by people who don’t believe in their ability to achieve anything.
Another French example is a programme called “Young Creators” run in the mission locale of the city of Senart. This was established to help young people set up their own businesses – but their approach was very different from unemployment agencies in France. The typical approach of unemployment agencies is to identify as quickly as possible something that the young person could possibly do, usually some sort of training programme, and send them there. The presumption is that the unemployment counsellor knows best and the young person is sanctioned if they don’t comply (sounds familiar!!) This approach usually fails – but inexplicably is still pursued (as it is here with all age groups).
The Young Creators programme acknowledges that the people they are working with have been told all their lives what to do, have probably also been told that they are not good enough and so arrive with extremely low self-esteem, suspicious of anything that is offered to them. Their methodology is to spend time with every individual listening to their ideas, talking it through, looking at alternatives, tackling any flaws in the plan etc. It doesn’t always lead to that person starting the original idea – they may decide on a different pathway or on an employed role which will fulfil them – but the outcome for almost everyone they work with is a positive change. Banerjee and Duflo’s study concluded that the Senart initiative worked because of the deep respect for the dignity of the young people it offered – many of them had never been taken seriously by anyone in an official position before. At Purple Shoots we take every proposal put to us seriously and spend time with each applicant – even if we don’t go on to provide funding, we have at least given everyone a fair hearing.
The book gives other examples from US and India but the principles behind all the initiatives they discuss in this part of the book are the same – and they are the ones that underpin our activity at Purple Shoots: that every individual is valuable and has something to offer and something to contribute. Whilst some people may have problems, they are not the problem themselves and should be seen for who they are and treated with respect and dignity. Our approach has changed the lives of many people in Wales because we have provided the means and the opportunity for them to change things for themselves.
One of the best illustrations of the right way to support people into meaningful work (or perhaps of what not to do) was given in Mauricio Miller’s book “The Alternative” where at one point he tells the story of his mother – an immigrant from Mexico to the US, arriving with no money but as a skilled seamstress she believed she would find opportunity to work – but instead she became the subject of endless (and expensive) programmes of help and training courses provided by well-meaning policy makers seeking to “help” the unemployed, when in fact if they had lent her the money for a sewing machine, she wouldn’t have needed any of it.
In the policy making around levelling up and building back better, I hope that policy-makers remember that everyone deserves respect and should have an opportunity to contribute what they can. If they come up with the usual solutions, and fail to change our sometimes punitive benefits system, nothing will change and many people will remain trapped in poverty who could have contributed to our communities and economy.