I laughed. Until I read Gordon Campbell's piece on Key's Welfare Reforms.
"To the young unemployed, it must seem be a bit like getting lectures on sobriety from an alcoholic uncle."
Not funny at all.
Monday, August 15, 2011
Funny - but not at all.
I laughed. Until I read Gordon Campbell's piece on Key's Welfare Reforms.
"To the young unemployed, it must seem be a bit like getting lectures on sobriety from an alcoholic uncle."
Not funny at all.
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How it could be done, focusing on employment. Rather than looking to the US, we should appreciate what Germany did in 2008 when the economic downturn hit. From an The Guardian article:
"The model here is Germany. It has used a "short work" policy to keep the unemployment rate down – at very low cost to the government. Its unemployment rate today is 0.5 percentage points lower than it was at the start of the downturn, even though the German economy actually has grown less than the US economy over this period.
There are many different packages that fit the short work scheme, but the basic story would be that rather than having a firm lay off 20% its workers, the government encourages the firm to cut their work time by 20%. The government directly replaces 60% of the lost wages (12% of the total wages); it has the company replace 20% (4% of total wages); and leaves the worker taking home 4% less and working 20% fewer hours.
The cost should be about the same as the unemployment insurance benefit that workers would have received if they were laid off, but the short work policy keeps them employed. This has two major benefits. From the standpoint of employers, they have workers available whose hours can be quickly increased if demand picks up. This saves them the need to find and train new workers.
From the standpoint of workers, this keeps them employed and tied to the workforce. They maintain their skills (Germany also offer training subsidies that can be used in many cases), and they don't run the risk of becoming unemployable as a result of long-term unemployment. This is especially important in the US context where a large share of the unemployed have now been without work for long periods. If nothing is done to increase employment soon, many of these workers may never find jobs again. The model here is Germany. It has used a "short work" policy to keep the unemployment rate down – at very low cost to the government. Its unemployment rate today is 0.5 percentage points lower than it was at the start of the downturn, even though the German economy actually has grown less than the US economy over this period.
There are many different packages that fit the short work scheme, but the basic story would be that rather than having a firm lay off 20% its workers, the government encourages the firm to cut their work time by 20%. The government directly replaces 60% of the lost wages (12% of the total wages); it has the company replace 20% (4% of total wages); and leaves the worker taking home 4% less and working 20% fewer hours.
The cost should be about the same as the unemployment insurance benefit that workers would have received if they were laid off, but the short work policy keeps them employed. This has two major benefits. From the standpoint of employers, they have workers available whose hours can be quickly increased if demand picks up. This saves them the need to find and train new workers.
From the standpoint of workers, this keeps them employed and tied to the workforce. They maintain their skills (Germany also offer training subsidies that can be used in many cases), and they don't run the risk of becoming unemployable as a result of long-term unemployment. This is especially important in the US context where a large share of the unemployed have now been without work for long periods. If nothing is done to increase employment soon, many of these workers may never find jobs again. "
Jonesy - your idea trumps anything National have come up with. The cynical say that Key's free market ideology requires that there be a 'tail' of unemployed in order that the rest of the system works, and therefor he's not going to address the isue of unemployment in New Zealand at all. Do you think that view has relevence?
Robert,
There was a similar scheme set up here in NZ at the start of the recession - by National.
I don't know all the details because I didn't end up using in - it seemed more appropriate to larger employers than me.
Perhaps you could do some research and enlighten us with the comparisons.
It would make a welcome change from you default National = Bad, Labour = Good position
Thanks
Ross
I agree with the cynical view of National's structuring of the employment market. I don't see it as cynical though, more realistic. National's core supporters are the rich and priveleged, as opposed to the wantabee's who voted for them last time. For the rich and priveleged to maintain their position there needs to be a gradient to the working poor and the unemployed.
Witness the degree of inequality in NZ.
Really Ross?
We don't hear a lot about it.
RG and Joensy - what a load of old claptrap.
National did set up a scheme similar to your Germany example. But the real issue is it will never address the issue of youth unemployment. You know the one exacerbated by the Labour abolishment of youth rates.
Has anyone ever mentioned to you that communism is a failed experiment? By your marxist rantings about the "rich" wanting to keep the poor downtrodden it appears you need to get out more. The people that really want to keep the poor downtrodden are the socialists - like those in Liabour. They want to maintain a large underclass as a voterbase. They know from bitter experience overseas that when the country becomes more prosperous, people see the error of their ways and stop voting for the left.
What the "rich" really want is for people to become more prosperous and everyone to become "rich". Everyone benefits when that happens.
You guys really need to get those chips off your shoulders.
Paranormal
"your marxist rantings about the "rich" wanting to keep the poor downtrodden it appears you need to get out more. The people that really want to keep the poor downtrodden are the socialists"
That is funny paranormal, on so many levels. Can't bring myself to expand any more than that but thanks for the frivolity. Today's been serious, council-wise and I needed something light.
Would you have been happier if I had said something like 'All animals are equal, just some are more equal'?
Paranormal
That's not original is it paranormal? How abut something original. I know you were brought up on a farm but...
We all know it's not original, but knowing the source surely puts it in context?
Paranormal
Context, yes.
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