Monday, January 12, 2009

Governement blesses jobless, but cannot see the elephant...

Companies to get £2,500 for each long-term jobless recruit | Politics | "The government is to give firms that recruit people unemployed for more than six months 'golden hellos' of up to £2,500, in a move that provides £500m to keep employers hiring.

The unexpected initiative, which will be announced at the government's jobs summit this morning, is the latest to tackle rising unemployment, predicted to hit 3 million by the end of the year. Last week, the skills secretary, John Denham, announced measures to increase apprenticeships by 35,000 and a system of internships to ensure students unable to find employment still find training."

While we should welcome any move to reduce the scourge of unemployment, Government could do mush more by having a radical look at the benefit system. It is not difficult.
1 At present benefit is paid on condition that the claimant does no work.
2 There is a huge amount of work that needs to be done to save energy, help the community, and improve the environment.
3 Tribunals can be set up which will give accreditation to enterprises that fulfill the criteria in 2 above.
4 Claimants who find work in accredited enterprises can take their benefit into work with them. This is technically known as a Earnings Disregard, and already happens with pensions.
5 The employer makes the new workers' pay up to the going rate for the job. He is not allowed to displace old workers with the new system.

The net effect is that instead of SS money being a grudging sop to stop people dying of starvation, it becomes a Green Wage Subsidy, a positive stimulus to the economy - reducing unemployment, opposing global warming, benefiting society and environment.

What's more, it contains an important component of the Citizen's Income, in that the CI also is not withdrawn when the citizen goes to work. Unfortunately it came a cropper in green Party Conference because... well, because it was not CI.

Give us strength.

More on this here.


Glenn Vowles said...

Great post Richard. I particularly like the point about the huge amount of work that needs to be done. I've always thought of it like this: we've worked very hard for many decades messing up the world therfore there is a great deal of work to be done to stop this, put it right and get economies and societies into s stable, secure and sustainable condition.

DocRichard said...

Hi Glenn, thanks for commenting.
"Work" both in the physical sense, and the economic sense, both increase the order in a system. Work is against the Second Law of Thermodynamics. As is biological life. But militarism and climate changing processes assist the Second Law, and therefore are species of anti-work, and orthodox economics is not economics at all, it is dyseconomics.

All explained fully here:

Anonymous said...

Taxes act as a disincentive - the economists call it Pigovian, or somesuch.

The obvious thing to do then, is to remove all taxes on work, including employees' and employers' NI, on incomes below say £15 or £20K pa.

To keep it neutral, wack the taxes on eco-horror luxury goods like wide-screen tellies and cars instead.

DocRichard said...

Dona, you're not wrong.
MfSS: EC720 National Insurance is a form of income tax in disguise. As it is only levied on "earnings" (i.e. wages and self-employment income), it means that "unearned" investment income is currently taxed at a lower rate than "earned" income.

EC721 Under a green taxation system, National Insurance will be abolished as a separate entity and merged into general Income Tax. The distinction between "earned" and "unearned" income will no longer be used to determine different methods of taxation.