Notes on the Front

13 responses to “The Unemployment Crisis: A Modest 0.7% Response”

1. 

   tells.it.like.it.is

   November 26, 2012

   Typos:
   s/What Kind of Wor/What Kind of Work/
   s/The list goes one/The list goes on/

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2. 

   tells.it.like.it.is

   November 27, 2012

   You calculations seem a fishy too …
   “A second calculation can be based on the ESRI’s estimate of the impact of Government wage consumption on the economy. €1 billion expenditure would result in GDP rising by €1.28 billion.”
   But this isn’t €1 billion in fresh wage spending, instead circa half of it is just a re-branding of current welfare spend.
   So I think you should half the project deficit reduction to €300 million, no?
   Also …
   “Employers’ PRSI … This could increase revenue by approximately €50 million, if half of all jobs come via the voluntary sector”
   Where does the voluntary sector get its funding? Much of it comes from direct grants from the HSE etc. Simply recycling this money back into the state coffers gives no net gain (and forces the voluntary groups to cut budget for other things to find the extra PRSI payments).
   Also you don’t seem to have accounted properly for the non-wage costs of taking on this army of 50,000.

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3. 

   Ciaran

   November 27, 2012

   Michael,
   Best of luck with these proposals. Alas, ideas like these are waved away by those who espouse the idiotic maxim: ‘government can’t create jobs, only the private sector can create jobs’. You’ll also have a tough time convincing certain people that direct public subvention of employment is an economic benefit, even though they have no similar problem with the IDA or Enterprise Ireland sponsoring every two-bit ‘entrepreneur’ who promises, with crossed fingers, to ‘create’ a small amount of jobs over a large timeframe.
   Shops don’t refuse the disposable income of people in receipt of payment from public funds, but one gets the feeling that it is an exercise in futility attempting to tell some people otherwise, particularly those who buy into the ‘crowding out’ myth.

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4. 

   Michael Taft

   November 27, 2012

   Ciaran – thanks for that. I share your pessimism but one must keep working on alternatives; the stagnation that is setting in (the OECD projections about a global recession and the poor Irish estimates) means that eventually we’ll have to start looking at new ideas.
   tell.it.like.it.is – First, there is explicit reference to a 15% top up for training/administration. That is why 50,000 jobs created would result in a headline cost of 1.049 billion. This breaks down to €2,738 or a total of €137 million.
   Second, such investment could be categorised as temporary wage consumption (if the employees are treated as direct state employees) or temporary non-wage consumption (the state purchases services from community/voluntary groups in the form of employment payment). It wouldn’t be treated as a social transfer since it isn’t. The employment of any person results in reduced social protection spend – either current or future. It doesn’t change because it is public, private or voluntary.
   Third, you may find a redirection of expenditure or an enhanced ability to generate new revenue by an increase in employment in this sector. This will depend on an organisation-by-organisation basis. That is why I didn’t include this.
   At the end of the day, cutting long-term unemployment by 25%, putting 50,000 people back to work – that can’t be anything but positive. I’m sure you would agree with that.

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5. 

   tells.it.like.it.is

   November 27, 2012

   “First, there is explicit reference to a 15% top up for training/administration.”
   Sure, but my feeling is that this is too low to account for all the non-wage costs, especially when the likelihood is that these 50,000 workers would be very widely dispersed, often into organizations that are not already tooled up to receive an infux of new employees.
   “It wouldn’t be treated as a social transfer since it isn’t.”
   Sure, but it doesn’t matter what it’s called from the point of view of calculating the economic impact.
   If give you two fishes today and call a social transfer, then tomorrow employ you for a wage of two fishes & a loaf of bread, your net gain on which to base new economic activity is limited the loaf of bread.
   “At the end of the day, cutting long-term unemployment by 25%, putting 50,000 people back to work – that can’t be anything but positive”
   Sure, but I’m arguing for a more accurate costing of the enterprise, not against its essential goodness.
   It could be pure motherhood & apple pie, but if the true costs are prohibitive, it will never happen.

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6. 

   CMK

   November 27, 2012

   Talk of ‘prohibitive’ costs for creating employing using the state as an employer of last resort is bonkers, truly bonkers. We’re paying out billions upon billions every year to unsecured bondholders with barely a murmur in our media and with an impressive omerta among our right wing economists who spring into action instantly whenever public spending to create employment is mentioned. tells.it.like.it.is admit that your preference is for half a million unemployed as a tool to leverage down the so-called ‘costs’ of employment? You’ll emote about the human impact at unemployment but you’ll argue against, with a fanatical vehemence, government doing anything to try to create employment. What that says to me is that you are an ideologue of the worst stripe: you’ll adherence to the esoteric and abstract nostrums of neo-classical and neo-liberal economics take precedence over doing anything to relief what is now, for decent people [which excludes the vast majority of right wing economists], an unemployment catastrophe.

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7. 

   tells.it.like.it.is

   November 28, 2012

   @CMK
   Almost the very first step in doing something about it, is to figure out what that something will cost.
   Not to emote (your phrase) about the billions paid to bondholders, then go on a march, and afterwards settle down for a nice pint with a bit of mutual-backslapping on the side.
   Those billions seem to have been re-purposed as the ultimate discussion-stopper on any other costs incurred by the state.
   Should the taxpayer continue to pay an allowance to cover female night attire for Army cadets?
   “Quit that crazy talk! Don’t ya know we’re paying billions to bondholders! All other costs are therefore untouchable and unmentionable!”
   Back to the real world …
   If Michael is interested in proposing realistic solutions, then his supporting calculations must be open to scrutiny.
   Of course, suggestions to create employment emanating from the union camp would be far more believable if the main agenda of ICTU over the past couple years hadn’t been to run down public service employment in the most expensive way possible in order to protect the benefits enjoyed by older public servants.

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8. 

   Ciaran

   November 28, 2012

   ‘tells.it.like.it.is’,
   I think the billions being repaid to international loan sharks is a pretty convincing ‘discussion-stopper’. Certainly more so than irrelevancies like allowances for night attire for female soldiers, or any other petty examples to which you want to divert the discussion.
   Michael’s above proposals amount to a much better solution to the unemployment and economic crises that have afflicted this country, than anything else that’s been tried so far, which has amounted to nothing more than taking huge amounts of money out of the economy, demonising those in receipt of social welfare payments, as well as transparent attempts at union-busting.
   The fact that Michael’s proposals entail the use of public money may horrify you, but I think it’s obvious that austerity based on Swabian housewife myths have never worked, here or in any other country, at any time.

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9. 

   tells.it.like.it.is

   November 28, 2012

   @Ciaran
   “Certainly more so than irrelevancies like allowances for night attire for female soldiers”
   Problem is those “irrelevancies” add up to €1.5 billion per annum in allowances, of which a mere 5% was on chopping block for this year, and 10% for next.
   The final savings came in at less than 0.25%, once the insider lobby got its hands on the proposals.
   Now if Michael’s calculations are correct, the projected savings on those “petty examples” would have funded more than 10,000 ELR positions!
   “Michael’s above proposals amount to a much better solution to the unemployment … as well as transparent attempts at union-busting.”
   No, the main direct state impact on employment during the crisis had nothing to do with “union-busting”.
   In fact the unions were the primary co-conspirators with the state in running down public sector headcount in order to shore up the insiders’ benefits.
   So on the one hand the unions demanded and got the most expensive reduction-in-force possible. A billion handed out tax-free in gratuities, huge additional pension costs, surplus staff redeployed to make-work positions.
   Next we turn around and start up a massive program of public works?
   Surely it would have been far better to either (a) not run down public sector numbers in the first place, or better still, (b) selectively let go surplus staff but then hire larger numbers of graduates into frontline positions where they are needed.

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10. 

    Ciaran

    November 28, 2012

    ‘tells.it.like.it.is’,
    There’s more to union-busting than strike-breakers cracking heads at lock-outs. I’m thinking more of Richard Bruton’s attack on the rights of workers in service industries, as well as other general attempts to lower the standard of working conditions, in order to placate IBEC, ISME, SFA, Chambers Ireland and the other business representatives / unions.
    The “€1.5 billion per annum” worth of allowances is still dwarfed by the amount we’re paying in odious debt to the bond pirates. Many of these allowances are merited depending on the job, while others are antiquated and wasteful. However, the point is that getting rid of the latter category of allowance is something that should be done simply as a matter of good housekeeping (for want of a better word), regardless of the economic climate. Getting rid of all of the allowances may end up being counter-productive in terms of service provision – provided, of course, that public service provision is your chief concern, rather than getting one over the unionised public serpents.
    Also, I presume you’re referring to Croke Park when talking about the unions’ ‘co-conspiracy’ with the State. Whatever else about their conduct during this period, running down the public sector workforce was never their intention : they’ve always sought to avoid compulsory redundancies. And if they have shorn up “the insiders”‘ benefits, well guess what? Those insiders are their members, and they’re meant to defend their interests, and prevent the race to the bottom desired by the neoliberal right. You don’t seriously think the Government would lift the recruitment embargo if the unions had agreed to all the cuts and diminished employment rights demanded of them, do you?
    Also, I’m not sure what you mean by “make-work positions”, though I have no doubt you’ve got at least one pertinent example up your sleeve. Suffice to say, I’m sure there’s no such problem in the private sector, with every non-executive director and stock/property portfolio-holder working their fingers to the bone for the good of the nation.
    “Next, we turn around and start up a massive (sic) program of public works?”
    Well, I know it be such a shame after all the good work done in demoralizing a large part of society, but, to answer your question : yes.
    Still, glad to see you don’t buy into the notion that we have an overstaffed public sector.

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11. 

    tells.it.like.it.is

    November 28, 2012

    “Also, I presume you’re referring to Croke Park when talking about the unions’ ‘co-conspiracy’ with the State.”
    Yes.
    “Whatever else about their conduct during this period, running down the public sector workforce was never their intention : they’ve always sought to avoid compulsory redundancies.”
    So it turned out that compulsory redundancies (and to a lesser extent outsourcing) were the only forms of headcount reduction that the unions sought to avoid.
    By contrast, they actively pursued the forms of headcount reduction that were most advantageous to the insiders – early retirement, voluntary redundancies, and non-recruitment – but least advantageous to service users and to the next generation of public servants.
    That headcount reduction was never the unions intention is simply not believable.
    There were many other ways to skin the payroll-reduction cat, with different sets of winners and losers in each case. Many of the alternative approaches would have led to less damage to service levels and less reduction of total headcount.
    Yet by pure chance the form of payroll reduction most beneficial to the insiders just happened to fall into the union’s lap in the middle of that long night of negotiation in Croke Park.
    “Also, I’m not sure what you mean by “make-work positions”, though I have no doubt you’ve got at least one pertinent example up your sleeve.”
    I refer you to the recent redployment of that small army of VEC CEOs to newly invented desk jobs. An alternative would be to recognize that these positions were redundant, let the surplus staff go, and use the funds thus freed up to hire 3-4 graduate teachers for each CEO.
    Instead we have non-recruitment of the (good value) staff that we need and retention of the (massively overpaid) staff that we don’t.

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12. 

    CMK

    November 30, 2012

    @ tells.it.like.thinks.it.is
    Almost the very first step in doing something about it, is to figure out what that something will cost.
    Sound advice: it’s a pity the government didn’t do that before they started bailing out the banks. Of course, it’s always interesting to hear the bailouts being defended, the opened ended costs of the bailouts being ignored, by people who in the same breath condemn a couple of million being paid for carer’s or some other essential public service.
    Not to emote (your phrase) about the billions paid to bondholders, then go on a march, and afterwards settle down for a nice pint with a bit of mutual-backslapping on the side.
    Ah, the complacency of someone who had never had to march for anything in his/her life. Right wingers are beyond parody.
    Those billions seem to have been re-purposed as the ultimate discussion-stopper on any other costs incurred by the state.
    Well, like, yeah, dude. We’re constantly being lectured that ‘we’re spending more than we’re taking in and we have to borrow a billion every month to pay for a bloated public sector’ [see Patricia Callan of ISME on ‘Primetime’ last night and Sean Murphy of Chambers Ireland on ‘Primetime’ on Tuesday night. Hilariously, they both used almost the exact same formula of words]. We’re having to borrow a billion a month because we’re handing over two billion every month to pay bondholders for bankrupt banks and to pay the interest on the debts that we’ve been forced to incur to pay for these banks’ recklessness. I know that the right-wing consensus is that the bank bailout has ‘moved on’, but it’s a factor in the state of the public finances now, today, and probably for the next generation. Demands to cut public spending – because we have to borrow to fund that spending – while ignoring that we have to borrow more to pay back financial institutions – is clear evidence that ideological thinking has irreversibly diminished any capacity to provide real analysis of this crisis.
    Should the taxpayer continue to pay an allowance to cover female night attire for Army cadets?
    A beautiful sentence! It captures very succinctly all that is completely rotten with our current economic orthodoxy. It focuses on an entirely negligible part of public spending – a fraction of the public budget given to support profitable businesses – and is dismissive of the needs of female public servants. And indeed completely disregards that those public servants have made a commitment to place themselves in danger should they be requested to do so. Not the kinds of danger that denizens of the IFSC might encounter like a scalded tongue from a latte that is a tad too hot. It’s, you know, real danger with guns, bad guys and stuff.
    If Michael is interested in proposing realistic solutions, then his supporting calculations must be open to scrutiny.
    Michael’s solution is reasonable, humane, an example of what this society badly needs and his costings are open to scrutiny. If only the decision on the bank bailouts and NAMA were as transparent. But, of course, they were focused on saving those who really matter, while spending money trying to alleviate the human catastrophe of mass unemployment is a waste of money and, moreover, the very idea itself must be harried and nit-picked to death.

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13. 

    tells.it.like.it.is

    December 1, 2012

    @CMK
    “It focuses on an entirely negligible part of public spending”
    As pointed out earlier, the sum of those individually negligible spending items adds up to €1.5 billion per annum.
    “… is dismissive of the needs of female public servants.”
    Female public servants have no additional needs in the night attire department than male public servants.
    Neither are their needs any greater or lesser than the night attire requirements of women or indeed men outside that sector.
    We all need PJs, the question is whether it makes any sense at all to provide such PJs on the state’s dime to anyone.
    “And indeed completely disregards that those public servants have made a commitment to place themselves in danger should they be requested to do so … real danger with guns, bad guys and stuff.”
    In other countries people are exhorted to “support the troops” either by funding the purchase of ever bigger guns, or else by campaigning against such troops being deployed into intractable foreign wars.
    Never have I heard that we should honour their service by buying the soldiers (only the female ones, mind) new pajamas.
    Are these jammies bullet-proof? How could the possesion of new PJs possibly make a wit’s difference to their safety when on deployment?
    Unless of course you’re talking about the indigenous bad guys, closer to home. Most of those formerly associated with the bad guys have long ceased to be of concern to the security forces, either stalking the corridors of power themselves (the ex. WP gang) or else just a heartbeat away (the Shinners).
    “… the very idea itself must be harried and nit-picked to death.”
    Pointing out a 50% margin or error on the one of the main funding planks is hardly nitpicking.

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