Sunday, August 02, 2009

Fancy names for failed ideas

Job Ops and Community Max. Flash new names for government work creation schemes just announced by John Key.

First consideration must be given to the opportunity cost of taking the tax to fund these schemes. Better if the money is left with the private potential employer in the first place. It's pretty illogical to tax the employer and then turnaround and say, if we give it back, could you provide a job?

However the reality is the scheme is going ahead.

I agree with the central idea that if money is going to be chucked at young people, best get a return for it. Best make it an 'investment' in them for all our sakes.

But one has to assume that money is still going to be chucked for no return because no mention has been made of restricting access to the dole, sickness benefit, dpb, ema or independent youth allowance.

No mention of sanctions if young people refuse a placement.

Maybe that is to come but I am not holding my breath. Are you?

Finally there is nothing new under the sun with these sorts of schemes. In the final analysis what they actually achieve is a distortion of the labour market. There are no free lunches and there are no free jobs. Other potential employees unfortunate enough to be older than 24 will be disadvantaged by not attracting a subsidy. They are most likely to be low-skilled Pacific, Maori, and migrants.

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