Support for WISEs is a profit in disguise

The Flemish government is wise to invest in WISEs (work integration social enterprises). Each disadvantaged person employed creates a benefit of €12,228 per person per year. This means the government makes a 52.6% return on its investment.

Social jobs (sociale werkplaatsen) is a Flemish policy that employs nearly 10,000 people in activities including catering, gardening, logistics, bicycle repair, cleaning, ironing, energy efficiency – and recycling.

The ESF Social Economy Thematic Network went to in Vilvoorde, just north of Brussels, last Thursday, to visit one of these recycling businesses, Televil, and discovered how cost-effective work integration social enterprises (WISEs) are.

Altogether, Flanders is covered by 141 Kringwinkel second-hand shops, which collectively turn over €51m per year. They collect 73,000 tons of refuse a year, and manage to reuse 32,000 tons of it. This work employs 5,423 people, of whom 85% are disadvantaged. 57% of their turnover comes from sales, with the remaining 43% coming in the form of subsidy. But this subsidy is really a profit in disguise.

A very illuminating cost-benefit analysis shows how society gains from employing disadvantaged people in recycling. Each worker employed brings a benefit of €12,228 a year. The benefits break down as follows:

• €3,793 to the government, because unemployment benefits saved and taxes paid exceed the support costs (a return on investment of 52.6%%)
• €5,350 to society, through the added value of the work done
• €3,085 to the individual, because wages less the cost of going to work are greater than unemployment benefit foregone

The following table gives a fuller analysis:

Further information:
Download Samen Sociaal Tewerkstelling’s Portfolio 2018