Employment subsidy?

Sandvich

It's one thing I thought about reading the "Let's force people on the dole to work" thread. It's not a super practical idea but it could be nice if it could work somehow.

Basically, a lot of places can't afford to keep people on, and the government can't afford to keep them on the dole. We can't really drop minimum wage either.

What about a Middle ground?

For example imagine if you could hire someone at 100 euro less than the minimum wage. This would be pretty baller; if you had 4 openings that might suddenly jump to 6. Or at worst, you pick up someone for cheap and end up having to pay less.

This is the the principle that people have for dropping the minimum wage. In real life, this isn't going to work.

But at the moment what we have already is that people on minimum wage are actually entitled to certain benefits. Effectively, employers have to pay less to guarantee an employee a decent standard of living.

What if we looked into more measures like this?

The government can't afford to do this, but it also can't afford to keep people on the dole. I know on disability anyway you can in theory work so many hours a week while still keeping certain benefits.

Wouldn't the smart thing to do, to extend this principle? Offer more grants to small businesses to hire people. As long as this works out as being less than the dole; you save money and add to the economy.

Or start up a scheme where businesses can apply for so many "subsidised" employees. They pay them say 200-300 a week and the Welfare department/HSE or relevant government body spots them the rest(and they keep some of their benefits such as rent allowance perhaps), because quite frankly it's better than giving them the full dole.

This would promote small business growth, where we badly need it, reduce the welfare bill just as effectively as cutting the dole without depriving anyone of quality of life, get more people into employment, and send the message the government is actually getting off their ass and doing something about unemployment.

There'd need to be strict measures so they don't just fire people and pick someone up off the dole, but I'm not sure how that would work out.

If this is possible or impossible, I'd like to know exactly why, and if any of what I say could have some merit. Or what other ideas people have for improving emplyoment, since nothing is going to improve until we do.

I think my basic point is that the government should be somehow focusing on creating employment, and it's by no means an impossible task, just difficult.

liammur

Government seem too focused on Anglo to be even considering initiatives like yours.

AlekSmart

Too true and I think our old friends, the Germans,have made great use of this Employment Subsidy principle whereby the State would ass ist an employer to retain staff by either reducing the Employers levies or by direct transfer of subsidy....with actual full scale lay-off being genuinely seen as the last resort.

Sensible approach ?...perhaps,but as liammur points out,our Government is now fatally entangled in a net of increasingly criminal weave all focused on keeping a relatively few "Good Sorts" supported whilst feeding the lower orders to the sharks !

Sandvich

I'd nearly consider emailing this to some TD or some ****e, for what load of good it'll do. Maybe it'll give them a talking point for the next election at least.

Welease

The plan has some merit, and these sort of incentives have been used before, but it's not the panacea that some would imagine.


- Expanding the workforce in small business's through schemes such as this don't grow the small business sector.. Growth comes through more revenue generation. If you raise costs (by hiring) you need to raise revenue in order to maintain a balance.
- Companies in Ireland are not failing due to a lack of staff, they are failing because their current revenue does not cover the current costs. Adding extra costs by hiring further employees widens the gap. Growth has to come in the form of revenue generation in order to keep these business viable.
- In order to expand, companies need to have potential revenue they can go after, this is difficult in a flat/contracting market. They also need to have resources or credit with which to perform an expansion.. It will be a while before they see a return on their investment, with credit restrictions many don't have the ability to attempt expansion.
- Wage costs (esp. at minimum wage levels) may be one of the smaller barriers to employing staff. The employment costs, PRSI, taxes), capital and non capital costs including training, machinery, insurances, desks, heating, lighting, pensions, etc etc etc will often dwarf the salary portion. Again, all this money needs to be recouped via increased revenue, which is difficult in a contracting economy.

If we want to help business's succeed, then costs need to be driven down (rates, electricity, etc), red tape eliminated, credit start flowing and an environment which allows business's to develop needs to exist.. Then business's would be in a position too consider taking on more employees.

whatawaster

I think it would be much simpler to begin to phase out Employers PRSI (drop by 10% per annum) and to begin to drop out the minimum wage (by 10% per annum)

Right there is more incentive for employers to hire people

Count Dooku

whatawaster wrote: »

I think it would be much simpler to begin to phase out Employers PRSI (drop by 10% per annum) and to begin to drop out the minimum wage (by 10% per annum)

Right there is more incentive for employers to hire people

and for people switch to dole

whatawaster

Count Dooku wrote: »

and for people switch to dole

I'd also cut the Dole by similar amounts, and tighten the rules for those on it long term.

AlekSmart

I'd also cut the Dole by similar amounts, and tighten the rules for those on it long term.

As whatawaster notes the reduction of Social payments is a definite requirement but probably the element which most terrifies the Government.....The working/middle classes are deemed to be far more docile and compliant than the several hundred thousand generally youthful and capable Social Payment recipients who might just react negatively to the ending of their income stream.

However it`s not for nothing that the Army General Staff has been involved in cabinet briefings and associated inter-agency meetings :eek:

Sandvich

whatawaster wrote: »

I think it would be much simpler to begin to phase out Employers PRSI (drop by 10% per annum) and to begin to drop out the minimum wage (by 10% per annum)

Right there is more incentive for employers to hire people

This way takes less money out of the economy, though. That's always been the dilemma. This way makes us more competitive without taking any money out of people's pockets, or the government's pockets(relative to what they're spending now).

whatawaster

Sandvich wrote: »

This way takes less money out of the economy, though. That's always been the dilemma. This way makes us more competitive without taking any money out of people's pockets, or the government's pockets(relative to what they're spending now).

In the short term, maybe. But we do have a 20bn deficit, which will be difficult to eradicate without taking money out of the economy, unfortunately.

In the medium-long term, the lower barriers to employment creation should mean more people in work, and, overall, more money circulating in the economy.

Sandvich

I don't know why people assign infinite importance to the national debt, but not personal/private debt.

There is a huge issue here, outright cutting dole and minimum wage means a lot of local businesses buy it.

I think when the economy recovers a bit after engaging in similar measures to what I propose, it would be a much better idea, but we really need to fight the cost of living somehow to make that practical. Somethings need to be better regulated, some things maybe less regulated.

As it is our personal debt is crazy high and the average Irish citizen cannot borrow from the Germans.

timespast

whatawaster wrote: »

I'd also cut the Dole by similar amounts, and tighten the rules for those on it long term.

We have an unemployment rate of around 13%? (I'm sure those figures have been massaged)

I think it's becoming more apparent that a growing number of people are believing the unemployed are the main problem ......... I think it's nonsense to believe that the majority of unemployed people do not want to work.

People want to work.....ok the vast majority want to work.

The Govt's policy on job creation is "keep your head down and pretend we know what we are doing"

Over the years this FF Govt. and yeah FG and Labour previously thought we'd keep on trucking nicely and with the assistance of the media we'd have a great time for years to come.

Do you remember Lisbon 2 ? ...... even Enda and his lads were promoting
"Yes to Lisbon.....Yes to Jobs"

We all knew Lisbon was a farce and we all knew we were screwed.....Jeez, even FG and Lab supporters were saying in the last election "This is the election to lose"

The problem now is what do we do?

If we can throw Billions into Anglo ( yeah and we know FF were protecting their buddies) then we should do something for Business and those that have lost their jobs.

Employers PRSI, Employment subsidies, re-education and how about subsidies for transport for manufacturers.....perhaps Transport co's can be helped out ( so long as they pay their drivers a decent amount and not farcical amounts for eastern european drivers....unfair to all)

Some will say that's impossible.....yet make excuses for Banks, developers etc.

As mentioned elsewhere...... I hope we don't become a right wing thinking people.

Blaming the unemployed is like blaming the patients for the state of the health service. (I said that elsewhere already)

Can I have my revolution now?

timespast

Sandvich wrote: »

I don't know why people assign infinite importance to the national debt, but not personal/private debt.

There is a huge issue here, outright cutting dole and minimum wage means a lot of local businesses buy it.

I think when the economy recovers a bit after engaging in similar measures to what I propose, it would be a much better idea, but we really need to fight the cost of living somehow to make that practical. Somethings need to be better regulated, some things maybe less regulated.

As it is our personal debt is crazy high and the average Irish citizen cannot borrow from the Germans.

If you know a willing German I'd love to hear from them...Im in **** street.

These aren't my words but I wish they were........ "How come we can Nationalise the debt but not the Wealth?"

He has a point.

Sandvich

You know, I'd just like to point out how ridiculous it is that the right wingers on this board are all over the threads that involve taking it out on those on the dole or public servants, most of which only reduce the debt and don't help the economy at all, possibly quite the opposite.

Whereas this is a thread for submitting ideas of what to actually do to create jobs and fix the economy without having to rely and such measures. Where as these guys now? If I'm wrong, then tell me why.

I don't know why they keep pretending they're honest people with honest concerns. If they even began to gave a toss about fixing the country they'd be all over this thread as well.

Scarab80

Sandvich wrote: »

You know, I'd just like to point out how ridiculous it is that the right wingers on this board are all over the threads that involve taking it out on those on the dole or public servants, most of which only reduce the debt and don't help the economy at all, possibly quite the opposite.

Whereas this is a thread for submitting ideas of what to actually do to create jobs and fix the economy without having to rely and such measures. Where as these guys now? If I'm wrong, then tell me why.

I don't know why they keep pretending they're honest people with honest concerns. If they even began to gave a toss about fixing the country they'd be all over this thread as well.

I don't think your idea will work because you have not addressed the reason why businesses are laying off staff, namely that there is not enough business activity to justify the amount of employees. Hiring more employees does not increase the amount of customers coming through the door.

The only way to increase business activity is to increase the amount of money in the economy by,

a) borrowing funds from outside the country, previously we did this privately now we are doing it through the state.

b) increase in foreign direct investment - this can be achieved by direct subsidy from the state or by increasing competitiveness, either through reduced costs (wages, energy, rent, rates, lower bureaucracy etc) or increased value (well trained, hard working employees, better infrastructure etc).

c) Encouraging Irish savers and high net worths to switch investment from overseas funds to direct investment in irish business. This can also be done by the banking system lending money on deposit to business.

d) Increased exports from traditional irish businesses through sales push or developing irish businesses who produce new goods wanted by the rest of the world

e) Reduced imports - buy irish or develop indigineous industry to replace imports (eg. energy generation)

Of course everyone wants to create jobs, even the government - it means more tax for them doesn't it - the problem is that creating jobs is a lot easier to say than to do.

At least with the work for the dole scheme - apart from having the benefit of weeding out fraudsters - people can provide public service, something that is always in demand, probably more so in a recession, and does not depend on how much money is in the country.