# "No jobs mantra suits the work-shy and welfare abuser"



## Brendan Burgess

Excellent [broken link removed] by Stephen O'Byrnes in today's Irish Times.



> *OPINION* : It’s time to reassess the unemployment crisis and the balance between work and welfare
> 
> 
> JOAN  BURTON’S recent comment that social welfare is a “lifestyle choice” for  some people, and her warning that those refusing to take up training or  employment opportunities could face welfare cuts, drew the predictable  hostile response from predictable quarters. But little else. It was a  brave stance for a Labour Party Minister, and one that challenges the  prevailing national narrative about unemployment.
> ...
> 
> But is the jobs market really as grim and bleak as these headline figures suggest?
> ...
> Is it not surprising there continue  to be so many foreign nationals working in hotels, restaurants, high  street stores, supermarkets, corner shops and garage forecourt outlets? I  have nothing against these people (quite the contrary), but why are  more and more of these jobs not now being appropriated by Irish  nationals?
> 
> 
> ...But with the Government investing so much in reviving and  expanding the retail and hospitality sectors, from raiding private  sector pension funds to cutting VAT and reforming antiquated workplace  regulations, it is important to ask if an expansion in the jobs market  will lead to a reduction of tens of thousands on the Live Register, and a  consequent reduction in the State’s social welfare bill, or simply an  expansion in the number of overseas workers.


----------



## Brendan Burgess

It had occurred to me whether the unemployment rate was a fair reflection given that so many more non-nationals are working in Ireland compared to the 1980s. 

I don't like the government's jobs initiatives and it is worrying that the new jobs created may well have no impact on the unemployment numbers if the jobs created are filled by immigrants.


----------



## DB74

Does Mr Byrne believe that we should just sack the foreign nationals who hold the jobs in hotels, restaurants, corner shops etc and employ Irish people in those same jobs to solve the jobs crisis?


----------



## Brendan Burgess

Hi DB

Have a read of the entire article. I only extracted some of the Key Points.

Brendan


----------



## jhegarty

DB74 said:


> Does Mr Byrne believe that we should just sack the foreign nationals who hold the jobs in hotels, restaurants, corner shops etc and employ Irish people in those same jobs to solve the jobs crisis?



That suggests that Irish people would take those jobs.

I suggest that many people (I said many , not all) would not.


----------



## JoeB

The minimum wage is too high, I don't know why Fine Gael reversed the cuts. Surely wages that are too high are part of the problem. I think it was just a purely populist move by FG, not related to our economic situation, or to what is good for our country.
(If FG wanted to break election promises why not that one?)

Social welfare rates are too high.

I explained this to a guy who applied to me for a job, with no experience of cabinet making. I explained that I could employ experienced people at little more than the minimum wage.. mostly Polish lads it must be said, but from my point of view there's little difference.

So there is no lower wage available to pay him! He offered to work for free!, in order to gain experience which is essential to get a job in a hands-on cabinet making workshop.


----------



## Gekko

jhegarty said:


> That suggests that Irish people would take those jobs.
> 
> I suggest that many people (I said many , not all) would not.


 
Which would be a lifestyle choice.

I'm no fan of Joan Burton, but her proposal to cut the dole of those who refuse to take jobs or to train was common sense.

There's a "pro waster" agenda in this country and the above article tackles it bravely.

It's simple.  If someone on the dole turns down a job, their dole should be cut by (say) 33%.  If they do it again, it should be cut by a further 33%.  And if they do it again, they should lose the remaining payment.


----------



## Brendan Burgess

jhegarty said:


> That suggests that Irish people would take those jobs.
> 
> I suggest that many people (I said many , not all) would not.



I think that is one of the main points of the article that we have become work-shy for the following reason: 



> Because when rent supplement and a medical card are taken into account, they are better off on the dole,



It's not just rent supplement, it's the Mortgage Interest Supplement as well. 

If welfare rates were brought into line with Northern Ireland or the UK, a lot of Irish people would lose their work-shyness pretty sharply.

Brendan


----------



## Complainer

Brendan Burgess said:


> If welfare rates were brought into line with Northern Ireland or the UK, a lot of Irish people would lose their work-shyness pretty sharply.


Do you mean 'welfare rates' or 'welfare system'? If you're going to compare against UK or NI rates, then compare the cost of living in UK/NI, the supports available through the NHS, the free school books and (in some areas) free school meals etc. Please don't pick and choose which bits of the system you compare.


----------



## Firefly

Brendan Burgess said:


> If welfare rates were brought into line with Northern Ireland or the UK, a lot of Irish people would lose their work-shyness pretty sharply.
> Brendan



+1 Brendan.


----------



## Sunny

How about we make Stephen redundant and offer him a job in a meat processing factory despite his qualifications and many years experience? Lets see how keen he is then to just forget about his career and take the first job offered. 

Why are we spending a fortune on free third level education if we have loads of jobs that don't require qualifications? Why have we spent years telling people that further education is the answer if we are just going to stick them in lower paid manual jobs or else punish them by cutting their social welfare.

By all means cut the social welfare rates but don't judge people from your (not directed at anyone) ivory tower as to why they are reluctant to forget about their careers just so they can get a 'job'. If I lost my job tomorrow, I wouldn't grab the first opportunity in gardening that came along. I would spend time trying to find a job in the area that I am qualified in. Fair enough, I shouldn't be given an unlimited amount of time to do it but I should be given an opportunity without being punished. It doesn't make me work shy. 

Also I am not sure why foreign nationals were brought into the article. They live here and they have jobs so what's the point? Would pointing out the number of vacancies in shops, restaurants, supermarkets etc not be a better argument to show how work shy the Irish are rather than pointing out how many foreigners seem to have jobs here. There are also a lot of foreign nationals on the dole.


----------



## DerKaiser

I'm not sure we have to brand people on the dole wasters in order to justify cutting the overall level of the dole with cuts focussed on those refusing to take jobs or places on training courses.

Most of the people on the dole now probably paid decent levels of tax for a number of years, so no point in insulting them.  Is it not enough just to say we'll cut benefits without resorting to name calling?


----------



## Chris

I agree that both high minimum wage and high welfare entitlements are at the core of the problem, as they do not discourage people to remain on welfare. Why would a couple with two kids and rented accommodation give up net income of €30000 for one of them to take a minimum wage job paying less than €18000 a year? Germany faced this problem for many years and it wasn't until they capped unemployment entitlements at 12 months and introduced the so-called €1 jobs that unemployment declined. Incentivising people to do absolutely nothing is the totally wrong approach, which in my opinion is reflected in the amount of foreign workers in low paying jobs.


----------



## shnaek

Add to that the exemption from a property tax that will increase year on year. Dole income is tax free, so when you add tax on top of that, you need to be earning a very decent wage indeed to make it worth your while going to a job that you, perhaps, dislike. 

Given the choice between working a job you dislike or earning slightly less to be free all day to do as you choose, the choice for an entitlement-based people is a simple one. 

The difficulty is distinguishing between those who really want to work but can't, and those who have never wanted to work. Our society won't allow us to make those distinctions. We are simply not allowed to point the finger at anyone in a society that values equality no matter what the cost, over responsibility.


----------



## JoeB

There are two forms of social welfare... the one where your benefits are funded by the tax you yourself paid, and the other, that's available to everybody.

The 'available to everyone' one should be cut, and benefits should be issued in the form of vouchers. If we're giving people money for food and essentials then that's what they should be spending it on.

The 'funded by your tax' one should be updated. I wouldn't mind a system where someone is on 70% of wages for 6 months, then 45% for 6 months,.. then reduced to the standard rates.

There is a perception that our social welfare system is been abused. There are cases where people would be worse off having taken a 30K a year job,.. this is patently silly.. in Poland you'd take home approx 3,000 Euro for an entire year working in Tesco.


----------



## shnaek

DerKaiser said:


> Most of the people on the dole now probably paid decent levels of tax for a number of years


And that is why we should have a graded system, where those who paid decent levels of tax for a number of years get higher payments to start off with. And those who have never paid tax get lower payments.


----------



## shnaek

JoeBallantin said:


> The 'available to everyone' one should be cut, and benefits should be issued in the form of vouchers. If we're giving people money for food and essentials then that's what they should be spending it on.
> 
> The 'funded by your tax' one should be updated. I wouldn't mind a system where someone is on 70% of wages for 6 months, then 45% for 6 months,.. then reduced to the standard rates.


Hear hear


----------



## Chris

Complainer said:


> Do you mean 'welfare rates' or 'welfare system'? If you're going to compare against UK or NI rates, then compare the cost of living in UK/NI, the supports available through the NHS, the free school books and (in some areas) free school meals etc. Please don't pick and choose which bits of the system you compare.



First of all, none of the things you mention are free in the UK, people pay for them through taxation and they pay heavily for them. Secondly, you have mentioned on numerous threads that there is no point in just looking at welfare rates while not taking cost of living into account, when comparing welfare entitlements in the UK and Ireland, and you are absolutely right. But I have pointed out on numerous occasions that JSA alone is 250% higher in Ireland than in the UK, and that at no stretch of the imagination is the cost of living 250% in Ireland than in the UK.


----------



## Chris

shnaek said:


> And that is why we should have a graded system, where those who paid decent levels of tax for a number of years get higher payments to start off with. And those who have never paid tax get lower payments.



The only way that this would work fairly and economically is if the whole system were to actually function like an insurance where the system becomes a funded one not a pay-as-you-go/ponzi one.


----------



## Sunny

shnaek said:


> And that is why we should have a graded system, where those who paid decent levels of tax for a number of years get higher payments to start off with. And those who have never paid tax get lower payments.


 
I know a French banker who was made redundant in London. Moved back to Paris and pulled in a six figure social welfare sum because of the graded system. Can you imagine the headlines here?


----------



## Mpsox

A few weeks back I spent a number of days on the road and then in the UK for business. I stopped in a number of places for dinner and in a lot of cases, the staff (who were very nice and professional) were all non-nationals and in many cases, probably non-EU citizens. Same was at the airport when I made the mistake of getting a breakfast in their rip off canteen. 
Walking around the town where I live, I can see signs in pub windows for lounge staff and the local Abrekabra always seem to have a poster in the window looking for staff. Why can't these employers fill their vacancies and are they forced to employ workers for overseas because Irish people wont work in these jobs?

To me there are 2 reasons, number one being that there is no financial incentive for people to take up a low paying basic job because of the way the system is structured. Why work 20 hours a week when you can get the same money doing nothing?. However, I also can't help wondering if a lot of people also believe such jobs are "beneath" them since we all got a bit carried away in the Celtic Tiger years.?


----------



## orka

DB74 said:


> Does Mr O'Byrnes believe that we should just sack the foreign nationals who hold the jobs in hotels, restaurants, corner shops etc and employ Irish people in those same jobs to solve the jobs crisis?





Sunny said:


> Also I am not sure why foreign nationals were brought into the article. They live here and they have jobs so what's the point?


A major point in the article, which I agree with, is that the government is spending money (reducing its tax take via VAT reduction, levying private pension funds etc.) to create jobs - and there is no point doing that if the jobs will not be taken up by people currently on benefits - the scheme may just attract more immigrants if they are the only ones willing to do the jobs.  So we'll still have the same people on the dole but there will have been a cost to the state.


----------



## Gekko

Sunny said:


> If I lost my job tomorrow, I wouldn't grab the first opportunity in gardening that came along. I would spend time trying to find a job in the area that I am qualified in. Fair enough, I shouldn't be given an unlimited amount of time to do it but I should be given an opportunity without being punished. It doesn't make me work shy


 
Why?

If there's a gardening job available in the interim, you should be compelled to take it.

The problem is the disparity between the minimum wage and social welfare payments.  If the minimum wage is €324 per week (€8.65 per hour x 37.5 hours), nobody should be getting total social welfare payments of more than (say) €200 per week.  That'd soon put manners on the layabouts.  And of course those who can't work should be looked after appropriately.  This discussion is about those who refuse to work.


----------



## Sunny

orka said:


> A major point in the article, which I agree with, is that the government is spending money (reducing its tax take via VAT reduction, levying private pension funds etc.) to create jobs - and there is no point doing that if the jobs will not be taken up by people currently on benefits - the scheme may just attract more immigrants if they are the only ones willing to do the jobs. So we'll still have the same people on the dole but there will have been a cost to the state.


 
I somehow doubt immigrants are sitting in some foreign Country looking at the latest vacancies in Supermacs saying we must go there. Immigrants will come anyway and they are entitled to work just as much as anyone. If Irish people take all the jobs, we will just have a load of unemployed foreign national workers.


----------



## orka

Sunny said:


> I somehow doubt immigrants are sitting in some foreign Country looking at the latest vacancies in Supermacs saying we must go there.


No - but a lot will rely on anecdotal evidence from friends/family already here.  If the message is 'you'll find a job no problem' vs. 'not so easy to get a job anymore', that will have an impact on the numbers coming here.


----------



## Firefly

Gekko said:


> Why?
> 
> If there's a gardening job available *in the interim*, you should be compelled to take it.



This is the point. You take something on a short term basis until you can get something better again. It's not like it's for an eternity. It's interesting to see that the 'usual' suspects against reducing benefits are those in the 'safest' of jobs. I can't help wonder why? Is it because they fear that they share the same employer and their own pay might suddenly seem so high?


----------



## DB74

Sunny said:


> If Irish people take all the jobs, we will just have a load of unemployed foreign national workers.



The difference being that we can refuse entry/permits to the 2,926 Brazilian workers (for example) that were issued PPSNs in the first 6 months of this year.

I would be hugely in favour of a graded social welfare system


----------



## Complainer

Chris said:


> First of all, none of the things you mention are free in the UK, people pay for them through taxation and they pay heavily for them.


Correct, they are not free and they are paid for through taxation. I never mentioned the word 'free' in my post, so I'm not sure why you bring this up as a retort to my post?



Chris said:


> Secondly, you have mentioned on numerous threads that  there is no point in just looking at welfare rates while not taking cost  of living into account, when comparing welfare entitlements in the UK  and Ireland, and you are absolutely right. But I have pointed out on  numerous occasions that JSA alone is 250% higher in Ireland than in the  UK, and that at no stretch of the imagination is the cost of living 250%  in Ireland than in the UK.


That's not the point I've been making. I've mentioned on numerous threads that there is no point in just looking at welfare rates while not taking the 'big picture' into account. Cost of living is just one feature of that 'big picture' - overall supports available from the State such as NHS and education is another part of that 'big picture'.

On the more general issue, I find it strange that it seems that we continue to issue and renew large numbers of work permits, given our current economic situation.


----------



## DB74

Firefly said:


> This is the point. You take something on a short term basis until you can get something better again. It's not like it's for an eternity. It's interesting to see that the 'usual' suspects against reducing benefits are those in the 'safest' of jobs. I can't help wonder why? Is it because they fear that they share the same employer and their own pay might suddenly seem so high?



Surely it's people in the not-so-safe jobs who are more in favour of retaining the current benefit system.


----------



## Sunny

DB74 said:


> The difference being that we can refuse entry/permits to the 2,926 Brazilian workers (for example) that were issued PPSNs in the first 6 months of this year.


 
But you can't limit the amount of Europeans. So we refuse entry to 2,926 Brazillians. Are you saying those 2,926 jobs should go to Irish people on the dole rather than Polish immigrants for example?

You are moving the discussion onto immigration policy.


----------



## Firefly

DB74 said:


> Surely it's people in the not-so-safe jobs who are more in favour of retaining the current benefit system.



That's what I would have thought too, but some of those in safe, government jobs appear to have the same viewpoint.


----------



## Sunny

My job is anything but safe and I think social welfare rates should be cut across the board including pensions and things like child benefit should be targeted rather than universal. I just don't agree that an article like this proves that Irish people are work shy and wasters just because they are on the dole and not working in meat processing factories.


----------



## DB74

Sunny said:


> But you can't limit the amount of Europeans. So we refuse entry to 2,926 Brazillians. Are you saying those 2,926 jobs should go to Irish people on the dole rather than Polish immigrants for example?
> 
> You are moving the discussion onto immigration policy.



Whatever way you look at it, we shouldn't really be issuing work permits to non-Europeans so that they take up jobs that people in the EU can do just as well.

Suppose there are 100 jobs available and there are 300 applicants, 100 from Ireland, 100 from EU, & 100 from outside the EU. You'd be mad to employ the people from outside the EU because then you have to pay social welfare to the other 200. At least you can send the 100 from outside the EU home.


----------



## Sunny

DB74 said:


> Whatever way you look at it, we shouldn't really be issuing work permits to non-Europeans so that they take up jobs that people in the EU can do just as well.
> 
> Suppose there are 100 jobs available and there are 300 applicants, 100 from Ireland, 100 from EU, & 100 from outside the EU. You'd be mad to employ the people from outside the EU because then you have to pay social welfare to the other 200. At least you can send the 100 from outside the EU home.


 
Where do you think all our junior doctors come from? Permits are not just issued to anyone. They are demand driven.


----------



## DB74

Sunny said:


> Where do you think all our junior doctors come from? Permits are not just issued to anyone. They are demand driven.



I'm not talking about high-skill level jobs like doctors. I'm talking about lower level jobs.

Are you claiming that there isn't one Irish person who could do even one of the jobs of the 2,926 Brazilians mentioned in the article?


----------



## Sunny

DB74 said:


> I'm not talking about high-skill level jobs like doctors. I'm talking about lower level jobs.
> 
> Are you claiming that there isn't one Irish person who could do even one of the jobs of the 2,926 Brazilians mentioned in the article?


 
I have no idea. I don't know what they do. I do know that your local fast food restaurant can't provide a work permit to a non-european for flipping burgers.


----------



## DB74

Sunny said:


> I have no idea. I don't know what they do. I do know that your local fast food restaurant can't provide a work permit to a non-european for flipping burgers.



I understand that.

I just find it hard to believe that we don't have suitably qualified European people to do jobs that these immigrants are coming in to do.


----------



## Gekko

Sunny said:


> things like child benefit should be targeted rather than universal


 
I heard Joan Burton make an interesting point in relation to this recently. Child benefit is paid to to everyone through the social welfare system to suit the less well off in society.

A single income family are generally entitled to a personal tax credit of €1,650 for the non working dependent spouse. The family should also be entitled to a similar level of credit for a dependent child. However, granting such a credit through the tax system wouldn't be of assistance to those without taxable income. As a result, everyone gets a cash payment of €140 per month or €1,680 annually through the social welfare system which more or less equates to a personal tax credit.

Joan's point was that in the interest of fairness, families would have to be granted tax credits for children in the event that they were denied child benefit and that this would make any change revenue neutral. And this is from a Labour Minister so it's not Margaret Thatcher-esque stuff.


----------



## DB74

Well then why don't they pay the child benefit gross as is and reduce the tax credits for everyone

That way those under the tax threshold will see no difference while those above it will effectively pay tax on the benefit


----------



## Protocol

We are a memner of the EU and we have signed up to free movement of people and workers.

So we can't take issue with thousands of Poles, etc. here.  Also, they pay tax/PRSI and so are entitled to JSB like any Irish worker.

However, as I walk around Irish cities I can't get over the amount of non-EU workers here, *while we have 300,000 unemployed*.

Workers in shops, cafes, petrol stations, etc. all from outside the EU.  We simply can't continue with this.

If we are to reduce unemployment from 300,000 then we can't allow anymore non-EU workers in.


----------



## Protocol

It's not politically correct, but with 300,000 unemployed and 450,000 on the Live Register, we simply can't be allowing Brazilans in to work in meat plants, Filipino nurses, Indian doctors, etc.


----------



## Protocol

DB74 said:


> Does Mr Byrne believe that we should just sack the foreign nationals who hold the jobs in hotels, restaurants, corner shops etc and employ Irish people in those same jobs to solve the jobs crisis?


 
I don't think we should sack existing non-EU workers.

But don't allow any more in!! * We have 300,000 unemployed!!!*


----------



## Gekko

DB74 said:


> Well then why don't they pay the child benefit gross as is and reduce the tax credits for everyone
> 
> That way those under the tax threshold will see no difference while those above it will effectively pay tax on the benefit


 
That wouldn't be fair.

Her point was that the €1,680 payment that an income earning family receive equates to the personal tax credit that the family should/would receive if for whatever reason they were no longer entitled to a child benefit payment.


----------



## DB74

Gekko said:


> That wouldn't be fair.
> 
> Her point was that the €1,680 payment that an income earning family receive equates to the personal tax credit that the family should/would receive if for whatever reason they were no longer entitled to a child benefit payment.



Dual income families where both earners pay tax at the top rate receive the same payment as single-income families under the tax net

Someone who already earns enough to be in the tax net shouldn't receive the payment tax-free


----------



## Sunny

Protocol said:


> We are a memner of the EU and we have signed up to free movement of people and workers.
> 
> So we can't take issue with thousands of Poles, etc. here. Also, they pay tax/PRSI and so are entitled to JSB like any Irish worker.
> 
> However, as I walk around Irish cities I can't get over the amount of non-EU workers here, *while we have 300,000 unemployed*.
> 
> Workers in shops, cafes, petrol stations, etc. all from outside the EU. We simply can't continue with this.
> 
> If we are to reduce unemployment from 300,000 then we can't allow anymore non-EU workers in.


 
How many of all those people you saw on your walks are Irish citizens? Did you ask them their nationality? Were they foreign students working part time which they are perfectly entitled to do?


----------



## tvman

JoeBallantin said:


> The 'funded by your tax' one should be updated. I wouldn't mind a system where someone is on 70% of wages for 6 months, then 45% for 6 months,.. then reduced to the standard rates.
> 
> .



I think the idea of an income related, reducing, social welfare payment is a good one and it's often proposed. But I haven't seen any analysis of the cost of it. I would imagine that it would cost far more than our current system (absent any reduction in the numbers claiming due to it's incentive effect) given the long term rate would have to be at least half of the current rate to allow recipients survive and the short term rates would be a multiple of the current rate.

Estimating the cost would be pretty complex because you would need to have a good understanding of the composition of the recently unemployed, which is obviously continuously changing. It would be a worthwhile project for the ESRI though.


----------



## Protocol

Sunny said:


> Were they foreign students working part time which they are perfectly entitled to do?


 
Yes, some could be in this situation.

That is a scheme with plenty of abuse of the 20-hr rule.


----------



## Sunny

Protocol said:


> Yes, some could be in this situation.
> 
> That is a scheme with plenty of abuse of the 20-hr rule.


 
Well then police the scheme. Lets not go down the BNP route and start a kick out the foreigners or force them out campaign. As far as I know, there are very few if any new permits given out anymore unless necessary (doctors).


----------



## orka

Protocol said:


> we simply can't be allowing ... Indian doctors, etc.


Slightly off-topics but... Our health system would be in big trouble if we couldn't recruit non-EU doctors who are often the only ones willing to take up the non-training positions in some of our rural hospitals.  You can't just pluck someone from the dole queue and put them to work as a doctor and I don't think we have any unemployed doctors.  Our own graduates often head overseas rather take up some of the less attractive junior doctor positions here.


----------



## Brendan Burgess

The article is about the relative attraction of welfare rates over minimum wage jobs.  It has nothing to do with Indian doctors. 

As has been pointed out many times, if we have high welfare rates, there is no incentive for people to work for the minimum wage, which is itself very high. 

My respect for Joan Burton would rise dramatically if she follows through with her common sense talk. And if she combines it with huge cuts in social welfare rates to make working more attractive to Irish people. 

If working in a meat plant or a retailer or a hotel is beneath someone, that is fine. But they should not be getting social welfare. 

brendan


----------



## gaf1983

*Interesting article*



DB74 said:


> Whatever way you look at it, we shouldn't really be issuing work permits to non-Europeans so that they take up jobs that people in the EU can do just as well.
> 
> Suppose there are 100 jobs available and there are 300 applicants, 100 from Ireland, 100 from EU, & 100 from outside the EU. *You'd be mad to employ the people from outside the EU* because then you have to pay social welfare to the other 200. At least you can send the 100 from outside the EU home.


 
As others have pointed out here, no, work permits aren't issued for fast food workers, however, other non-EU immigrants, such as non-EU students are entitled to work up to 20 hours per week during term time and 40 hours per week during their holidays. This is an area that's abused by employers and employees alike, but it seems like the authorities are paying a blind eye or at best lip service to this problem.

Regarding your comment, you say "*You'd *be mad to employ the person from outside the EU because you'd have to pay social welfare to the other 200." Who is the "you" that you refer to? If you're referring to the government/taxpayer of course you're right, however the reality is that the "you" in question who makes the decision about hiring is the employer, and they're often more likely to go for a non-EU worker who may be willing to do the job for less than the minimum wage.

There is nothing stopping the government reversing the granting of the right to work to international students - such rights were removed recently in Britain:

Google: :"Student visa curbs 'not based on evidence' timeshighereducation", 26 July 2011

(I'm not allowed post URLs yet. There is also an interesting discussion in the comments section below the article).

However, this could cause knock-on effects for the education sector who often rely on the fees international students pay to subsidise their other courses. The average cost of living for a student in Ireland is €7,000 per year, so it might be quite harsh to remove students' rights to support themselves while they are here, so if the right to work while studying was completely removed then this could cause serious problems for the third-level sector who would then only be able to attract the very wealthiest non-EU students. (I should declare a conflict of interest here: I work for an English Language School with a number of non-EU students who are living in Ireland on student visas).

I completely agree that Fine Gael were wrong to reverse their decision on the minimum wage. Clearly it is set too high at the moment, if scrupulous employers are forced to turn down inexperienced workers in need of experience and unscrupulous employers rely on sub-minimum wage labour in order to keep their businesses in operation.


----------



## Sunny

As I said, I think social welfare should be reduced across the board but do people honestly believe there are 400k jobs out there just waiting to be filled by lazy work dodgers. Let's discuss social welfare rates but lets have a realistic discussion on it and not just think a halving of social welfare will suddenly lead to a 50% drop in the live register or something.

Every decision made in this area has consequences. It's not a stroke of a pen decision.


----------



## Chris

Complainer said:


> Correct, they are not free and they are paid for through taxation. I never mentioned the word 'free' in my post, so I'm not sure why you bring this up as a retort to my post?


You actually did, here is a direct quote: "the free school books and (in some areas) free school meals etc"
You also refer to free UK services in another thread: http://www.askaboutmoney.com/showpost.php?p=1186754&postcount=35
Quote: "Public servants and social welfare recipients in the UK have the NHS to suppoort them, with free primary health care, free prescriptions, no need to buy private health insurance unless you want a fancy room."



Complainer said:


> On the more general issue, I find it strange that it seems that we continue to issue and renew large numbers of work permits, given our current economic situation.





DB74 said:


> I just find it hard to believe that we don't have suitably qualified European people to do jobs that these immigrants are coming in to do.



Well from feedback that Purple has provided on this site and from having talked to hotel, restaurant and other small business owners in the town I live in it seems that they overwhelmingly employ foreign nationals because most applicants are foreign and unlike the Irish counterparts are willing to work for wages that are lower.


----------



## Sunny

Chris said:


> Well from feedback that Purple has provided on this site and from having talked to hotel, restaurant and other small business owners in the town I live in it seems that they overwhelmingly employ foreign nationals because most applicants are foreign and unlike the Irish counterparts are willing to work for wages that are lower.


 
Without wanting to speak for Purple, I very much doubt he said that he employs foreigners because they are willing to work for lower wages than their Irish Counterparts. I have heard him discuss skill shortages among the Irish workforce.


----------



## Firefly

One other thing to note, is that if social welfare is dramatically reduced then lower paid wages will likely fall towards the minimum wage as there will be an increase in the demand for them.


----------



## Complainer

Brendan Burgess said:


> My respect for Joan Burton would rise dramatically if she follows through with her common sense talk. And if she combines it with huge cuts in social welfare rates to make working more attractive to Irish people.


Given that we have over 400k unemployed at present, where do you expect the jobs to come from for these people?


----------



## Brendan Burgess

I don't think that there are 400k people unemployed? Isn't that the number for the live register? 

They will compete with non EU citizens for the work that is there if they have to do so to live. 

In general, if the costs of doing business in Ireland are reduced, Ireland will become more competitive and more jobs will be created. 

It won't abolish unemployment but it will reduce the Social Welfare bill and it will help employers to create jobs.

Brendan


----------



## Purple

The reason we employ foreign nationals (both EU and non-EU) is because they apply for a job and they are the best candidate. If the best applicant for a particular job is Irish then they will get the job. Where someone is from or what their colour, creed or sexual orientation is is irrelevant. 

Where I work we’ve just taken our second pay cut in 12 months. That’s what we’ve had to do to stay busy and viable. What people deserve and what they can live on doesn’t come into it. What the business can afford to pay in the issue. The same applies to welfare rates etc. I’m not going to say that people on welfare get too much but I can say with certainty that the country can’t afford to pay out what it’s paying.

Over the last 10 years lots of non-Irish nationals took jobs that Irish people didn’t want so why should they be kicked out now because suddenly the Irish guy finds he’s willing to lower himself to do it?(BTW, there's no such thing as a "Non-National; everyone is from somewhere). If we want to limit the number of non-EU national coming here then that’s fine but we still have a skills shortage that won’t be filled with unemployed brickies, plumbers or carpenters any time soon.


----------



## potnoodler

why dont we just abolish the minimum wage and end all social welfares payments across the board , according to some this is the answer to creating half a million jobs, out of where and what.
Interesting article in the Sindo this was that 20% of private sector workers are on part time hours(course that would have to analyzed)


----------



## Jim2007

Brendan Burgess said:


> no incentive for people to work for the minimum wage, which is itself very high



Here in Switzerland unemployment benefit is restricted to 18 months, provided you have been in employment for the last two years.  The unemployment benefits are usually set at between 70% and 80% of your final month's pay cheque, to a max of about €7,500 per month.

During the benefit period you are not or required to take a job outside your profession or too far from home, but you are required to show proof that you have applied for at least 3 jobs per week.  During that period a government agency similar to FAS will assess your employability, in terms of your current skills and the market situation.  If they determine that you need retraining, it will be offered, but if you refuse, then your benefits are stopped.

If after the 18 months are up, you still have not found a new job, then you are on your own - there are no further welfare payments!  You can then either take what ever work is going or try and see if your local community authorities are willing to support you, this will normally only be done if you can show you are destitute and have tried every other option, including living of the relatives, in such cases you will normally be required to make yourself available for what ever work the community required doing, be that digging ditches or cleaning latrines!

In hard times, this usually means that foreigners will return home after the unemployment benefit runs out and the Swiss will take whatever jobs are on offer.

Jim.

PS - I guess I should also add that there is no redundancy payments or unfair dismissals over here - an employment contract is just like any other.  As long as the employer sticks to the terms of the contract, meaning the notice period, there is nothing you can do, no matter how long you have been employed by the company.


----------



## Complainer

Brendan Burgess said:


> I don't think that there are 400k people unemployed? Isn't that the number for the live register?
> 
> They will compete with non EU citizens for the work that is there if they have to do so to live.
> 
> In general, if the costs of doing business in Ireland are reduced, Ireland will become more competitive and more jobs will be created.
> 
> It won't abolish unemployment but it will reduce the Social Welfare bill and it will help employers to create jobs.


Another poster suggests "300,000 unemployed and 450,000 on the Live Register". Do you know how many non-EU citizens are employed here? I'm just wondering how many posts would you expect to be open for this competition?

And would you like to set your expectation for the 'Ireland will be more competitive and more jobs will be created' impact. I'm wondering who these jobs will be 'more competitive' than? Presumably we're still not going to be more competitive that eastern Europe, India or China for manufacturing posts. So what kind of minimum wage jobs are going to be created. Let's say we cut JA & JB by 30% - how many jobs would you expect to be created (given that employers can get interns for free, courtesy of the State's latest corporate welfare program)?


----------



## Brendan Burgess

Complainer said:


> . Do you know how many non-EU citizens are employed here? I'm just wondering how many posts would you expect to be open for this competition?



I don't, but it seems substantial. Or maybe they are all in very visible positions such as retail and restaurants.  



> I'm wondering who these jobs will be 'more competitive' than? Presumably we're still not going to be more competitive that eastern Europe, India or China for manufacturing posts.



Probably not. There are other advantages to basing industries in Ireland. If we can provide a lower cost base, then some companies will manufacture here.  Lower costs across the board would make Ireland more competitive and more attractive to keeping existing industry and attracting new industries. Do you think otherwise?  Are are you suggesting that perhaps we should have a minimum wage of €15 per hour as it doesn't matter?


----------



## Purple

We’ve lost nearly half of our manufacturing jobs since the high point in the early 90’s.
Many of these job losses were due to technological advancements that rendered plants or even industries obsolete. Examples of this are Fruit of the Loom in the North West and Packard Electric in Tallaght, Dublin.
There are far more examples of companies just moving to lower cost locations. The fall of the Iron Curtain and the opening up of China made much of this inevitable. The rest is the disturbing part; businesses that have moved to the UK, Germany and Holland because they are cheaper and/or better than us. 
In the 1980’s there was no Eastern Europe or China to move to; they were closed for business. We were the Poland of the day, we just had to get into the party and it was inevitable that we would level up economically. Now we are the ones who are too expensive and the new kids on the block are eating away at us from the bottom up. I don’t know what the solution is but as long as we are more expensive than mainland Western European competition that is better located and technically superior to us we haven’t a chance.


----------



## Firefly

Complainer said:


> Let's say we cut JA & JB by 30% - how many jobs would you expect to be created (given that employers can get interns for free, courtesy of the State's latest corporate welfare program)?



Of course it's hard to say without the fact in front of us. One thing is certain though...our 18bn per annum borrowing requirement would fall.


----------



## Shawady

I spoke to my friend that is unemployed recently and I thought I might give some of his details here out of interest.
He has 3 children and neither himself or partner work. They get €400 a week social welfare. When he last worked two years ago he was based in Dublin (he lives in a satelite town). If he got a job in Dublin now he would spend approx €100 on petrol.
He told me he wants to work but there is no way he could take a low paid job. He would be worse off.
He also said that extras like the medical card and back to school allowance are quite valuable to them.


----------



## shnaek

Jim2007 said:


> Here in Switzerland unemployment benefit is restricted to 18 months, provided you have been in employment for the last two years.  The unemployment benefits are usually set at between 70% and 80% of your final month's pay cheque, to a max of about €7,500 per month.
> 
> During the benefit period you are not or required to take a job outside your profession or too far from home, but you are required to show proof that you have applied for at least 3 jobs per week.  During that period a government agency similar to FAS will assess your employability, in terms of your current skills and the market situation.  If they determine that you need retraining, it will be offered, but if you refuse, then your benefits are stopped.
> 
> If after the 18 months are up, you still have not found a new job, then you are on your own - there are no further welfare payments!  You can then either take what ever work is going or try and see if your local community authorities are willing to support you, this will normally only be done if you can show you are destitute and have tried every other option, including living of the relatives, in such cases you will normally be required to make yourself available for what ever work the community required doing, be that digging ditches or cleaning latrines!
> 
> In hard times, this usually means that foreigners will return home after the unemployment benefit runs out and the Swiss will take whatever jobs are on offer.
> 
> Jim.
> 
> PS - I guess I should also add that there is no redundancy payments or unfair dismissals over here - an employment contract is just like any other.  As long as the employer sticks to the terms of the contract, meaning the notice period, there is nothing you can do, no matter how long you have been employed by the company.



And Switzerland is one of the countries into which money is flowing, and which is regarded worldwide as a successful and competently run county. So why are we running around with nonsense ideas like tolling by-passes instead of just copying one of the best run countries on the planet?


----------



## Sunny

shnaek said:


> And Switzerland is one of the countries into which money is flowing, and which is regarded worldwide as a successful and competently run county. So why are we running around with nonsense ideas like tolling by-passes instead of just copying one of the best run countries on the planet?


 
Do you want to pay me 80% of my salary for 18 months if I lose my job? Happy days. The cost of this system is enourmous and the Swiss pay for it in other ways.


----------



## shnaek

Sunny said:


> Do you want to pay me 80% of my salary for 18 months if I lose my job? Happy days.



Up to a limit of 7,500 per month, as the OP indicated. We could choose a lower limit. 



Sunny said:


> The cost of this system is enourmous


Source?



Sunny said:


> and the Swiss pay for it in other ways.


What other ways?


----------



## Complainer

Firefly said:


> Of course it's hard to say without the fact in  front of us. One thing is certain though...our 18bn per annum borrowing  requirement would fall.


Without some decent economic analysis, the impact is far from certain.  There would indeed be a saving on welfare spending. There would also be  reduced VAT and customs and excise arising from reduced spending. The  reductions in retail spending would lead to lower corporation tax income  and reduced employment in retail. The reduced employment would mean  reduced employment taxes, reduced knock on spending, and increased  welfare requirements. 

So really, how much would we be saving, and at what cost?



Brendan Burgess said:


> I don't, but it seems substantial. Or maybe they are all in very visible positions such as retail and restaurants.


In all fairness, I think we need something a bit more than 'it seems substantial' to base a major decision like this on. I have no issue with cutting out the issueing of work permits for all but the most specialised roles, but we really need to know how many posts are involved here to justify this change. And we'd really need to know the knock-on economic impacts of this proposal - if we're going to stop non-EU nationals from working part-time while studying here, I'd expect this to have a major impact on the industry of private colleges that has sprung up in recent years. So really, how much would we be saving?



Brendan Burgess said:


> Probably not. There are other advantages to basing industries in  Ireland. If we can provide a lower cost base, then some companies will  manufacture here.  Lower costs across the board would make Ireland more  competitive and more attractive to keeping existing industry and  attracting new industries. Do you think otherwise?  Are are you  suggesting that perhaps we should have a minimum wage of €15 per hour as  it doesn't matter?



I'm still not getting any idea from where you expect these low-skill low-wage jobs to come from. You could cut welfare/minimum wage by a factor of ten and we still won't be competing with eastern Europe or China, so we're not going to get manufacturing jobs. Where are these jobs going to come from?

What I suspect will happen is that we will have more people employed, but on lower salaries. So just for example, instead of having 100,000 people employed at €9 per hour, we will have 110,00 employed at €8 per hour. There will be no net economic benefit to the country, though there may be significant benefit to the owners of their respective businesses.

Is this really about creating jobs, or is the recession just being used as an excuse?


----------



## orka

Complainer said:


> What I suspect will happen is that we will have more people employed, but on lower salaries. So just for example, instead of having 100,000 people employed at €9 per hour, we will have 110,00 employed at €8 per hour. There will be no net economic benefit to the country...


There would be 10,000 people fewer on the dole - how would that not be an economic benefit to the country?


----------



## Firefly

Complainer said:


> Without some decent economic analysis, the impact is far from certain.  There would indeed be a saving on welfare spending. There would also be  reduced VAT and customs and excise arising from reduced spending. The  reductions in retail spending would lead to lower corporation tax income  and reduced employment in retail. The reduced employment would mean  reduced employment taxes, reduced knock on spending, and increased  welfare requirements.
> 
> So really, how much would we be saving, and at what cost?



You're correct there would be adverse knock-on effects if social welfare rates were reduced. The policy economists at the dept of Finance should have adequate econometric models to calculate, with some precision, the effect of reducing social welfare by 5%, 10%, 20% on the overall tax take, just like I'm sure they do when they introduce various other tax changes in each budget. In any case, given our relatively high social welfare rates, the solution is hardly to raise them any further...


----------



## Jim2007

Sunny said:


> Do you want to pay me 80% of my salary for 18 months if I lose my job? Happy days. The cost of this system is enourmous and the Swiss pay for it in other ways.



No I don't think so.  The salary deduction is 1.1% of salaries capped at 106,000pa and the employer contribution is the same 1.1%, so a total of 2.2%.

But the big think is that it is limited to 18 months and the fact that after that you get a big zero!!!  And I think that is a big part of it, because after 18 months, you have no choice but to take what ever is going, regardless of your qualifications or expectations.

Jim.


----------



## Jim2007

shnaek said:


> And Switzerland is one of the countries into which money is flowing, and which is regarded worldwide as a successful and competently run county. So why are we running around with nonsense ideas like tolling by-passes instead of just copying one of the best run countries on the planet?



Hold on a minute, not everything is done so well!!!  Take pensions for instance, it is not possible to live on a state pension and some people who have little or no savings are forced to move to places like Spain, Portugal or the south of Italy to live out their lives in exile.

Jim.


----------



## Gekko

The biggest issue seems to be the gap between the minimum wage and the total benefits package received by someone who's out of work.

It would therefore make sense (and save money) if claimants were allowed to keep certain other non jobseekers allowance/dole type payments in the event that they take up employment.

It's a joke if returning to work is financial suicide for someone.


----------



## Jim2007

Complainer said:


> I'm still not getting any idea from where you expect these low-skill low-wage jobs to come from. You could cut welfare/minimum wage by a factor of ten and we still won't be competing with eastern Europe or China, so we're not going to get manufacturing jobs. Where are these jobs going to come from?



I think you make a good point, but at the same time I would point out that the Swiss unemployment rate is about 2.8% right now and there is plenty of manufacturing being done over here!  In fact for the first time in something like 30 years there was a shortage of young people willing to take up apprenticeships.

I think there are a few factors that contribute to this success:

Firstly most manufacturing is done by small to mid size family owned companies rather than large multinationals.  These companies tend to be very loyal to the local community and will often even run at a small loss, rather than let workers go.  In my home town Ammann is a typical example, although it is having a hard time right now with the value of the Franc, there is still no talk of letting people go.

Another important factor is the apprenticeship system, pretty much every non professional job here requires an apprenticeship, you'd find it hard to even get a job selling petrol, if you have not done your commercial apprenticeship!  Coming out of school at 16, almost all young people head into a 3 or 4 year apprenticeship which consist of 2 days of school and 3 days on the job each week.  In addition to learning the job, they are also required to take further classes in maths, German and even English!  The result is a very well educated work force, even at the craft and semi manual level.  I'm always amazed at how well educated the tradesmen are that come to do work on my house, they are well able to explain everything to me in English, when my German lets me down - I'm having a hard time imagining an Irish builder being able to explain his proposal to a customer in French or German.

The other thing is that Swiss firms to no compete on price, they compete on quality.  I heard a Swiss business man on radio, explaining how he convinces a customer to buy a Swiss piece of manufacturing machinery.  He said he invites them to Switzerland and takes them for a tour around the country, showing them how everything works - trains run on time, trams are almost never late and so on.  And at the end of the day he poses a question, "You are about to buy a major piece of industrial equipment that you will have to rely on for the next 20 years, who you like to build it for you - people who can do all this, or people who can't even operate a local bus service?"  He said that in almost 70% of the time he'll get the order.

In closing, I'd like to highlight an Irish family run company that seems to be doing very well and again is competing on quality not price: McHale.  Very often, while waiting for my train in the morning, I'll see a goods train heading for southern Europe, with a couple of flat bed wagons, loaded with machinery built by these guys.  And it always gives me a kick to thing that these machines were designed and build by Mayo men!

Jim (Switzerland)


----------



## Sunny

Jim2007 said:


> No I don't think so.  The salary deduction is 1.1% of salaries capped at 106,000pa and the employer contribution is the same 1.1%, so a total of 2.2%.
> 
> But the big think is that it is limited to 18 months and the fact that after that you get a big zero!!!  And I think that is a big part of it, because after 18 months, you have no choice but to take what ever is going, regardless of your qualifications or expectations.
> Jim.



I can live with that. You said yourself, there is no such thing as redundancy payments. There is little employee rights protection. You also get less general social welfare benefits than we get here. I have no problem going the Swiss model but is everyone here willing to overhaul every facet of social welfare and enployment legislation including child benefit, medical card entitlement, rent allowance, mortgage interest relief etc etc

How many people here moaning about dole payments happily claim their child benefit every month even if they don't need it.


----------



## Jim2007

With respect to non-EU foreigners, I just found this [broken link removed] that suggests the number of non-EU citizens in Ireland in 2010 was about 75K, one of the lowest levels in the EU.

Jim.


----------



## Complainer

orka said:


> There would be 10,000 people fewer on the dole - how would that not be an economic benefit to the country?



Probably not. Given the 300k unemployed people not qualifying for benefits, there is a pretty good chance that some of those will be taking up any available jobs.

But you're right to question me, as my language was sloppy. It is probably not true to say that there is no net economic benefit. There would indeed be some saving on dole spending. This may be countered by some additional welfare spending on things like FIS or other supports for those who's income have dropped.

But the point that I really meant to make is that there is no new added value in the economy in this scenario. It really is just spreading the jam round a little thinner. It won't solve our problem.



Firefly said:


> You're correct there would be adverse knock-on effects if social welfare rates were reduced. The policy economists at the dept of Finance should have adequate econometric models to calculate, with some precision, the effect of reducing social welfare by 5%, 10%, 20% on the overall tax take, just like I'm sure they do when they introduce various other tax changes in each budget.


I hope their models go further than looking at just the tax take. I hope that they look at the full economic picture, which is more than just the tax take. I'd also hope that their models look at the other knock-on social impacts of these decisions. There is no point making a 5% saving on welfare if this is going to lead to 10% extra costs on healthcare, as people go hungry and cold through the winter.



Firefly said:


> In any case, given our relatively high social welfare rates, the solution is hardly to raise them any further...


I don't think anyone is suggesting raising of SW rates in the current environment.


Jim2007 said:


> I think you make a good point, but at the same time I would point out that the Swiss unemployment rate is about 2.8% right now and there is plenty of manufacturing being done over here!  In fact for the first time in something like 30 years there was a shortage of young people willing to take up apprenticeships.


Thanks for the update. What would be the mix of goods for export and goods for local consumption coming out of these businesses?




Jim2007 said:


> With respect to non-EU foreigners, I just found this [broken link removed] that suggests the number of non-EU citizens in Ireland in 2010 was about 75K, one of the lowest levels in the EU.


Just came across [broken link removed], which would suggest to me that the overall number of permits is pretty low.


----------



## Purple

Jim2007 said:


> In closing, I'd like to highlight an Irish family run company that seems to be doing very well and again is competing on quality not price: McHale.  Very often, while waiting for my train in the morning, I'll see a goods train heading for southern Europe, with a couple of flat bed wagons, loaded with machinery built by these guys.  And it always gives me a kick to thing that these machines were designed and build by Mayo men!




Jim, McHale make a lot of their stuff in Hungary.
For a really sucessful family owned Irish company look at [broken link removed]. For an Irish owned business that dominated the world within it's sector but doesn't make anything here look at Glen Dimplex

I agree completely that we shouldn't try to compete only on price. When I talk to customers I highlight that our quality rating is better than our German and American competitors. We sell on quality, customer service, short lead-times and integrity (a very important factor with US companies). 
The question I ask my customers is what are the implications if the product is wrong. Very often the answer is that somebody dies or they face costs running into the millions. We have to be price competitive within reason but it's not the number one factor. Having said that we are within 15% of Eastern European prices for most of what we do. The lower end stuff we outsource to Eastern Europe.

Much of the cost problem in Ireland comes from the price and cost inflation that took place over the last 10 years in the non-internationally traded sectors such as construction and the professions.
Bricklayers, electricians, solicitors, architects, doctors, accountants, plumbers, plasterers etc all gained a totally unrealistic concept of the value of their labour. The green eyed monster then got to work and the public sector and civil service got on board (in fairness to the ESB and Telecom Erin/Eircom they always had a grossly inflated opinion of their value and what they should get paid). This eroded cost competitiveness throughout the whole economy. The question now is what do we have to do to become competitive again.
Do we need more and better education? Yes, but that won’t work on its own.
Do we need to cut the minimum wage? Yes, but that won’t work on its own.
Do we need to lower welfare rates? Yes, but that won’t work on its own.
Do we need to reduce government spending? Yes, but that won’t work on its own.
Do we need to reduce pay nationally (across the entire public and private sectors)? Yes, but that won’t work on its own.
Do we need to reduce the number of work permits we issue? Yes, but we need to keep issuing them to people who we really need. 

We need to do all of the above but it took 15 years of gross economic mismanagement to get it this far into this mess. Anyone who thinks we can sort ourselves out in 2 or 3 or 5 years is delusional.


----------



## smyths

Just got into this thread.  Boy, do some of you guys worry me.  I have never been unemployed and paid my taxes, children's education fees etc.  But i think that you are very quick to condemn the unemployed.  People find themselves on the dole for a very wide variety of reasons: ability, qualifications, family background, lack of peer support or example, "wrong side of tracks", health issues, caring for someone, etc etc.  I haven't noticed any mention of the role of employers.  Employers hire the best value for money and non nationals  provide good value in many countries.  They have little local support if things go wrong so they make sure to be on time, do what they are tole and give no "trouble".  We have attacked the public servants and their jobs for life and big pensions but so little mention of the bankers, who from top to near the bottom benefited from mad bad lending policies.  The courts left Seanie F  with enough money to live on and you want to reduce an uneployed person to nil !  Never forget that the bankers and politicians (but mainly Bankers who mislead a stupid government and this is not only in Ireland) who got us to the position we are in. Not the unemployed and those on welfare.  Real nations are judged on the way they treat those most in need.  Those receiving welfare benefits while working on the BLACK economy are a different kettle of fish.  They must be rooted out.  Have any of you ever hired someone like that or paid cash so that no VAT was paid?  I hear this happens!!


----------



## Complainer

Some interesting responses to the original article (which I've just realised was written by head-honcho of the now defunct PD party) in the Irish Times Letters pages;

[broken link removed]
[broken link removed]


----------



## Gekko

smyths said:


> Just got into this thread. Boy, do some of you guys worry me. I have never been unemployed and paid my taxes, children's education fees etc. But i think that you are very quick to condemn the unemployed. People find themselves on the dole for a very wide variety of reasons: ability, qualifications, family background, lack of peer support or example, "wrong side of tracks", health issues, caring for someone, etc etc. I haven't noticed any mention of the role of employers. Employers hire the best value for money and non nationals provide good value in many countries. They have little local support if things go wrong so they make sure to be on time, do what they are tole and give no "trouble". We have attacked the public servants and their jobs for life and big pensions but so little mention of the bankers, who from top to near the bottom benefited from mad bad lending policies. The courts left Seanie F with enough money to live on and you want to reduce an uneployed person to nil ! Never forget that the bankers and politicians (but mainly Bankers who mislead a stupid government and this is not only in Ireland) who got us to the position we are in. Not the unemployed and those on welfare. Real nations are judged on the way they treat those most in need. Those receiving welfare benefits while working on the BLACK economy are a different kettle of fish. They must be rooted out. Have any of you ever hired someone like that or paid cash so that no VAT was paid? I hear this happens!!


 
Now that you've had your rant, are you opposed to doing something about social welfare recipients who refuse jobs or upskilling and training?


----------



## Sunny

Gekko said:


> Now that you've had your rant, are you opposed to doing something about social welfare recipients who refuse jobs or upskilling and training?



Nobody is against doing something about people who choose welfare for a way of life but I am more interested in reforming the entire social welfare system rather than laying the blame purely on the unemployed. Like I say, many of you are happy enough to claim childrens benefit that you don't need. I find that harder to defend than paying a jobless person €200 a week.


----------



## Gekko

Sunny said:


> Nobody is against doing something about people who choose welfare for a way of life but I am more interested in reforming the entire social welfare system rather than laying the blame purely on the unemployed. Like I say, many of you are happy enough to claim childrens benefit that you don't need. I find that harder to defend than paying a jobless person €200 a week.


 
I've heard it all now...your attempt to demonise families who work and contribute to society is in extremely bad taste, as is your use of the phrase "many of you".

What about the thousands of wasters who are paid €200 a week?  What about the thousands of wasters who were claiming unemployment benefit during the boom when we effectively had full employment?


----------



## Purple

Gekko said:


> I've heard it all now...your attempt to demonise families who work and contribute to society is in extremely bad taste, as is your use of the phrase "many of you".


 I think it’s a fair point. I’ve posted many times that its nonsense to give children’s allowance to people on high incomes. BTW, I’m one of them; I have 4 children so I get €7’500 in tax free welfare payments from the state each year. That’s nuts.




Gekko said:


> What about the thousands of wasters who are paid €200 a week?  What about the thousands of wasters who were claiming unemployment benefit during the boom when we effectively had full employment?


 You are mixing up too many points. There is a serious problem with welfare fraud in this country. The reason for this is that people won’t report their neighbours, friends or family for this theft but that’s no reason to cut rates.

I don’t think people on welfare deserve to have the rates cut. I do think that the country can’t afford the current welfare bill and so will have to cut rates anyway.
How is to blame, what’s fair and what people deserve is a different issue.


----------



## Gekko

Purple said:


> I think it’s a fair point. I’ve posted many times that its nonsense to give children’s allowance to people on high incomes. BTW, I’m one of them; I have 4 children so I get €7’500 in tax free welfare payments from the state each year. That’s nuts.
> 
> 
> You are mixing up too many points. There is a serious problem with welfare fraud in this country. The reason for this is that people won’t report their neighbours, friends or family for this theft but that’s no reason to cut rates.
> 
> I don’t think people on welfare deserve to have the rates cut. I do think that the country can’t afford the current welfare bill and so will have to cut rates anyway.
> How is to blame, what’s fair and what people deserve is a different issue.


 
These issues are all interlinked.

You SHOULD get that level of child benefit and if you didn't you should get four extra personal tax credits of €1,650 (i.e. €6,600) to reflect the fact that you're supporting four extra people.

However, before hammering the middle classes again (i.e the ones who actually contribute to society rather than milk it), it's imperative that as much waste as possible is eliminated.


----------



## Sunny

Gekko said:


> These issues are all interlinked.
> 
> You SHOULD get that level of child benefit and if you didn't you should get four extra personal tax credits of €1,650 (i.e. €6,600) to reflect the fact that you're supporting four extra people.
> 
> However, before hammering the middle classes again (i.e the ones who actually contribute to society rather than milk it), it's imperative that as much waste as possible is eliminated.



Why SHOULD he get that the money? Why should the State pay money for people to have kids? I have put off starting a family until i was financially secure on my own. I dont expect social welfare or tax credits. I would rather the State paid more on childcare and childrens health. People love comparing our social welfare to other countries so you go to some European countries, explain how much you get for having kids and watch their reaction. 

I am middle class but unlike you I dont envy all my friends who have recently lost jobs and neither to I begrudge them a decent level of State support while they try and get on their feet again. Many of them have failed and rather than live off the State or give up on their careers have decided to emigrate. None o
I know are sitting around laughing at the taxpayers for being mugs. 

The problem with things like this is we always think it is a great idea to slash social welfare until it actually affects us.


----------



## onq

JoeBallantin said:


> The minimum wage is too high, I don't know why Fine Gael reversed the cuts. Surely wages that are too high are part of the problem. I think it was just a purely populist move by FG, not related to our economic situation, or to what is good for our country.
> (If FG wanted to break election promises why not that one?)
> 
> Social welfare rates are too high.
> 
> I explained this to a guy who applied to me for a job, with no experience of cabinet making. I explained that I could employ experienced people at little more than the minimum wage.. mostly Polish lads it must be said, but from my point of view there's little difference.
> 
> So there is no lower wage available to pay him! He offered to work for free!, in order to gain experience which is essential to get a job in a hands-on cabinet making workshop.



Why don't you go and give up your job to a younger guy on the dole with qualifications coming out his ears Joe and let's see you survive in this economy on what you get on the Dole.

The fact is many people DO need the dole to survive, so a revision rates will unfairly target those.

The other act is that the Dole, like every other part of Ireland's economy is *riddled with corrupt practices*.

The correct procedure therefore is for the armchair critics both here and in government like Joan Burton to realize that we need to target the Dole scroungers amongst us, 
(i) those who are not entitled to claim
(ii) those who are claiming on the double and 
(iii) those holding down jobs while they claim.

But that would sound a bit like too much work for Joan perhaps.
I'm sure she has more important things to do with her Ministerial time than actually DO HER JOB and weed out the rotten apples!
Far easier just to declare everyone who is getting PAID BY THE STATE to be scroungers, and take shots at easy targets who are down on their luck.

This needs far more than cheerleaders for Joan Burton's level of political and economic analysis to repeat her wittering on AAM.
The primary thing, which this and the previous government have signally failed to do is GET OUR BANKS LENDING AGAIN!!!

Only then will be see a recovery in indigenous industry, as opposed to merely a rise in the balance of payments due to FDI's taking their profits here but not working here.
The rise is welcome, but it doesn't put people back to work and in many ways disguises the impoverishment of Ireland's economic diversity which Purple alludes to in another post.

Chasing profits by relocating to other countries has benefited multi-national companies but beggared Western Nations.
its time to look past the easy "solution" of cutting the Dole - a sop to right wing industrialists - and see where our problems really lie.

ONQ.


----------



## onq

Purple said:


> We’ve lost nearly half of our manufacturing jobs since the high point in the early 90’s.
> Many of these job losses were due to technological advancements that rendered plants or even industries obsolete. Examples of this are Fruit of the Loom in the North West and Packard Electric in Tallaght, Dublin.
> There are far more examples of companies just moving to lower cost locations. The fall of the Iron Curtain and the opening up of China made much of this inevitable. The rest is the disturbing part; businesses that have moved to the UK, Germany and Holland because they are cheaper and/or better than us.
> In the 1980’s there was no Eastern Europe or China to move to; they were closed for business. We were the Poland of the day, we just had to get into the party and it was inevitable that we would level up economically. Now we are the ones who are too expensive and the new kids on the block are eating away at us from the bottom up. I don’t know what the solution is but as long as we are more expensive than mainland Western European competition that is better located and technically superior to us we haven’t a chance.




There is a lot of truth in what you say Purple. but dealing with Social Welfare fraud (as opposed to lowering rates) is only part of the problem.

I put €20 in the tank this morning and was charged €20.24 when I went to pay.

"Oh you must have put some in and then went again.," came the dinsingenouous but oddly straw man reply.

Normally the first thing to do would be to check the amount registered, but this guy jumped from that to suggesting I had put in 24 cent(!), replaced the filler, let it reset, and then put in €20.

I am quite paranoid about fillers not having been reset, so its like confession - you want for it to reset correctly, then start the fuel delivery.

The only reason I copped this chancer was the fact that for once the counter stopped EXACTLY on €20.00 and it was still on €20.00 when I left the counter, whipping my card out of the machine with a flourish and checked the fuel pump reading.

Nos this is a little Irelander victory and I saw the dim reflection of Captain Mainwaring in my mind's eye as I stalked out to check the pump.

But look at the way retail prices have held up IN A RECESSION!

The cost of living here has not dropped significantly.

Worse did you know that a failed entity like Anglo-Irish Bank changed its fleet Mercedes cars this year?

There is a long way to go for the monied élite to take a chop in income, when the discredited clowns in Anglo are driving around in new Mercs.

ONQ.


----------



## Chris

Complainer said:


> Without some decent economic analysis, the impact is far from certain.  There would indeed be a saving on welfare spending. There would also be  reduced VAT and customs and excise arising from reduced spending. The  reductions in retail spending would lead to lower corporation tax income  and reduced employment in retail. The reduced employment would mean  reduced employment taxes, reduced knock on spending, and increased  welfare requirements.


There is no net gain to taxation when tax funds are given to people to spend. If €100 is taken out of tax revenue and handed to someone who spends it, attracting 21% VAT this does not mean that government is taking in more money. The economy is still down €100 which was taxed away.



Complainer said:


> I'm still not getting any idea from where you expect these low-skill low-wage jobs to come from. You could cut welfare/minimum wage by a factor of ten and we still won't be competing with eastern Europe or China, so we're not going to get manufacturing jobs. Where are these jobs going to come from?


But how does a country like Germany manage to compete on a global scale? Germany has no official minimum wage and has big restrictions on welfare entitlements. Wages are high, and yet it is one the biggest and most successful exporters in the world. 



Complainer said:


> Probably not. Given the 300k unemployed people not qualifying for benefits, there is a pretty good chance that some of those will be taking up any available jobs.
> 
> But you're right to question me, as my language was sloppy. It is probably not true to say that there is no net economic benefit. There would indeed be some saving on dole spending. This may be countered by some additional welfare spending on things like FIS or other supports for those who's income have dropped.


Reducing one type of welfare should not automatically trigger another type of welfare to be increased. The whole idea should be to reduce the public's dependence on welfare and you cannot achieve that by increasing welfare.


----------



## smyths

Sorry if it was a rant, Gekko.  I didn't think it was but I reckon you would be a good judge of rant.  Yes I agree that those of the live register should be offered training and upskilling opportunities and receive some sanctions if they refuse any reasonable offer.  Actually when we had the recession in the 80s more unemployed people applied for the Social Employment Scheme run by FAS, than there were places available.  Most people would prefer to work.  There is more to work than money.  It has a social function and effects one's health, self esteem etc.  There are some fiddlers but there are more fiddling elsewhere and what are you doing about them.


----------



## Complainer

Chris said:


> There is no net gain to taxation when tax funds are given to people to spend. If €100 is taken out of tax revenue and handed to someone who spends it, attracting 21% VAT this does not mean that government is taking in more money. The economy is still down €100 which was taxed away.
> 
> 
> But how does a country like Germany manage to compete on a global scale? Germany has no official minimum wage and has big restrictions on welfare entitlements. Wages are high, and yet it is one the biggest and most successful exporters in the world.
> 
> 
> Reducing one type of welfare should not automatically trigger another type of welfare to be increased. The whole idea should be to reduce the public's dependence on welfare and you cannot achieve that by increasing welfare.



All very interesting stuff, but I I don't quite see the relevance to this debate about reducing minimum wage and reducing welfare as a mechanism to get people back to work.




onq said:


> The other act is that the Dole, like every other part of Ireland's economy is *riddled with corrupt practices*.
> 
> The correct procedure therefore is for the armchair critics both here and in government like Joan Burton to realize that we need to target the Dole scroungers amongst us,
> (i) those who are not entitled to claim
> (ii) those who are claiming on the double and
> (iii) those holding down jobs while they claim.
> 
> But that would sound a bit like too much work for Joan perhaps.
> I'm sure she has more important things to do with her Ministerial time than actually DO HER JOB and weed out the rotten apples!
> Far easier just to declare everyone who is getting PAID BY THE STATE to be scroungers, and take shots at easy targets who are down on their luck.


----------



## onq

Complainer said:


> All very interesting stuff, but I I don't quite see the relevance to this debate about reducing minimum wage and reducing welfare as a mechanism to get people back to work.



Home visits merely put the scroungers under stress - which I agree with - but you need the carrot-and-stick approach.

I suggest the Back to Work Scheme needs to be widened to include all long term Dole recipients with a three year limit and immediate cut off if they don't either attend (whatever is appropriate). After the three years they are re-assessed.

All of the Dole recipients, particularly those on disability allowance of some sort, are fully re-assessed to see why they are disabled. This asessment starts covertly to assess whether they are as disabled as their last certificate or test result seemed to show. Any doctors who fraudulently certified disability are automatically struck off the medical register. The Medical Council is not involved in this process. They are simply notified.

During the three years work is done for the Dole money and/or the following sequence of courses must be attended AND PASSED.

Not attending the courses is not an option.

Dropping out isn't an option.

Failing the courses isn't an option.

No excuses, in other words.

Yes, it starts looking very right wing from this point because it effectively means that people who won't improve, won't learn and won't work don't get any money.

The courses should be offered starting with the lowest common denominator - addicted, illiterate and innumerate.


drug/alcohol/cigarette rehabilitation programs - otherwise their money is spent on these luxuries they cannot afford
adult literacy and numeracy programmes otherwise any other programs and upskilling cannot be addressed
home economics courses - to ensure that their money spending will be prioritized and they and their kids eat a good balanced nutiotious diet
family planning courses to prevent unwanted pregnanceis and reduce the burden of ht state if providing for children of people who cannot support them
wellness and motivation courses - to ensure they are supported in their break from whatever rut they are in that's holding them back and to promote a Positive Mental Attitude.
upskilling courses - to improve their chances of becoming employed
mangement courses - to build on this and help them manage their business should any wish to start one.
 Allied to this must be a "prevention is better than cure" initiative centred on early intervention for children at risk who are being raised by dysfunctional teenagers and adults.

Preference for support in the family and being cared for by older family members needs to be balanced by assessing the risk of abuse in the family.

The social protection side of this needs to be balanced by garda intervention side to prevent children at risk from being inducted into a life of crime from an early stage.

This in turn involves our local councils becoming involved in community programmes of works through which the requirement to work for their dole is seen as a "working for their community" activity by those involved and those benefiting, including the involvement of Mentors and Role Models to increase self-esteem and motivation.

As for the "intelligentsia" who think that a simple-minded cutting of the Dole paments will address never mind solve the many layered issues here, get a grip!

All that does is put families under more pressure.

It doesn't address the problems.

ONQ.


----------



## onq

Sunny said:


> Why SHOULD he get that the money? Why should the State pay money for people to have kids? I have put off starting a family until i was financially secure on my own. I dont expect social welfare or tax credits. I would rather the State paid more on childcare and childrens health. People love comparing our social welfare to other countries so you go to some European countries, explain how much you get for having kids and watch their reaction.
> 
> I am middle class but unlike you I dont envy all my friends who have recently lost jobs and neither to I begrudge them a decent level of State support while they try and get on their feet again. Many of them have failed and rather than live off the State or give up on their careers have decided to emigrate. None o
> I know are sitting around laughing at the taxpayers for being mugs.
> 
> The problem with things like this is we always think it is a great idea to slash social welfare until it actually affects us.



Absolutely agree and my other post refers.
Slashing the dole will only put the chancers out robbing people.

First we have to suss out the scroungers from those genuinely in need.

Then we must make a register of the scroungers and offer them 
- a work-for-your-dole option or 
- deportation and revocation of Irish citizenship.

Harsh perhaps, but it'll send the right message to a lot of places.
Citizenship should be a privilege, not a right
People should value it instead of selling Irish Passports to criminals and rich people.

ONQ.


----------



## Delboy

Jim2007 said:


> With respect to non-EU foreigners, I just found this [broken link removed] that suggests the number of non-EU citizens in Ireland in 2010 was about 75K, one of the lowest levels in the EU.
> 
> Jim.



75k seems very very light. At the 2006 census the offical figure for the Chinese community alone was 11k. But their own community organisations here and NGO's have publicly said that the real figure is between 60k and 100k


----------



## Chris

Complainer said:


> All very interesting stuff, but I I don't quite see the relevance to this debate about reducing minimum wage and reducing welfare as a mechanism to get people back to work.



It simply economics of supply and demand. Wages are the price of labour, just like every other good or service exchanged in an economy has a price. If a farmer has 100 apples and can only get interest for 80 of them at a price of €1 then he has to reduce his prices to attract more demand. In other words there is an oversupply of goods at current prices.
If the same farmer has 100 apples which attract interest for 120 of them at a price of €0.5 then prices need to increase in order to attract more production of apples to make up for the shortfall.
The very same laws of supply and demand apply to unemployment. There are about 400,000 unemployed at the moment. The reason they cannot find work is because businesses cannot afford to hire them at current wage rates. In other words, there is an oversupply of workers, just as in the first example of the farmer above.
Now there are two reasons why wages are not falling enough for businesses to start hiring again, (a) there is a very high minimum wage and (b) unemployed people are discouraged from taking on work that pays the same or less than their welfare entitlements.
If businesses could advertise jobs at lower wage rates and people were encouraged to take on those jobs then unemployment would go down. When supply and demand are artificially hampered then there will be no market clearing price, this is something that has been understood since Adam Smith in the 18th century.


----------



## Gekko

Sunny said:


> unlike you I dont envy all my friends who have recently lost jobs


 
A bizarre comment.

Why would I "envy all my friends who have recently lost jobs"?

I pity them.


----------



## Sunny

Gekko said:


> A bizarre comment.
> 
> Why would I "envy all my friends who have recently lost jobs"?
> 
> I pity them.


 
You are the one that wants to chop unemployment benefits because it is too generous or because people are wasters who abuse it. You obviously think people on the dole have it a lot easier than us middle class people who contribute something to society. (They are your words)


----------



## Gekko

Sunny said:


> You are the one that wants to chop unemployment benefits because it is too generous or because people are wasters who abuse it. You obviously think people on the dole have it a lot easier than us middle class people who contribute something to society. (They are your words)


 
Dole recipients who refuse jobs or upskilling should have their dole cut.  Genuine hardship cases should of course be helped.

Waste is the biggest financial sin of our government system.  How much child benefit is being paid to families who left the State years ago and just being withdrawn overseas from otherwise dormant Irish bank accounts?

And yes, the wasters do have it easier because they get something for nothing.


----------



## Complainer

Chris said:


> Now there are two reasons why wages are not falling enough for businesses to start hiring again, (a) there is a very high minimum wage and (b) unemployed people are discouraged from taking on work that pays the same or less than their welfare entitlements.
> If businesses could advertise jobs at lower wage rates and people were encouraged to take on those jobs then unemployment would go down.


Would you care to give some kinds of examples of the kinds of business and industries that will create new jobs (not displace existing jobs) by offering wages below the current minimum wage level?


----------



## Purple

Complainer said:


> Would you care to give some kinds of examples of the kinds of business and industries that will create new jobs (not displace existing jobs) by offering wages below the current minimum wage level?



If businesses can offer their services at lower prices they will win more international business. That's obvious. Do you think it is otherwise?


----------



## Firefly

Purple said:


> If businesses can offer their services at lower prices they will win more international business. That's obvious. Do you think it is otherwise?



Not only that, but the improved success of this business will attract new entrants into the market, chasing these improved profits, which will also imcrease employment.


----------



## Purple

Firefly said:


> Not only that, but the improved success of this business will attract new entrants into the market, chasing these improved profits, which will also imcrease employment.


 Yes, that's basic common sense. Therefore plenty of people won't understand.


----------



## Complainer

Firefly said:


> but the improved success of this business will attract new entrants into the market, chasing these improved profits, which will also imcrease employment.



I'll repeat the question - maybe instead of repeating the tired old mantras of the defunct PDs, you could give some kinds of examples of the kinds of business and industries that will create new jobs (not displace existing jobs) by offering wages below the current minimum wage level?


----------



## Firefly

Complainer said:


> I'll repeat the question - maybe instead of repeating the tired old mantras of the defunct PDs, you could give some kinds of examples of the kinds of business and industries that will create new jobs (not displace existing jobs) by offering wages below the current minimum wage level?



It's as much a question of retaining employment as creating employment in this economy and the restaurant business would be an obvious sector. 

According to the article below there is a restaurant closing every day due to high costs. 

http://www.examiner.ie/ireland/group-restaurant-closures-running-at-one-a-day-135775.html

The following Failte Ireland article 

[broken link removed]

finds that wage rates make up 25% of the cost of a meal (Section 4.1.2) and that in section 5.1.2 the mimimum wage is being used as "...a platform on top of which catering and hotel JLC rates (sic can) continuously extend." Now, whether using the minimum rates in this way is correct or not or applicable to the restaurant or not is not the issue...they are and by reducing the minimum wage, labour costs in restarants would fall. This would help save so many of them closing.


I would also like to add that my post was providing an addendum to  Purple's post so perhaps you should respond to his question out of  fairness?


----------



## Firefly

Duplicate Post


----------



## Purple

Complainer said:


> I'll repeat the question - maybe instead of repeating the tired old mantras of the defunct PDs, you could give some kinds of examples of the kinds of business and industries that will create new jobs (not displace existing jobs) by offering wages below the current minimum wage level?



Cutting the minimum wage without cutting wage levels in general will have little impact on our competitiveness problems.
The minimum wage level is the point at which the wage graph starts. If by lowering it all wages can drop then it will help. If it just makes the graph steeper then it will be of little use. 

Everyone is overpaid in this country but when you look at comparative wage levels in other Western European countries the real disparity is with lower paid jobs. This is the case in both the public and private sectors. 
This also holds true when it comes to direct taxation; the lower paid (€35’000) are taxed vastly less than their counterparts in most of the rest of Europe whereas the well paid (€70’000) are taxed slightly less than their counterparts.


----------



## Complainer

Firefly said:


> It's as much a question of retaining employment as creating employment in this economy and the restaurant business would be an obvious sector.


I see. So as I suspected, the plan is displace existing minimum wage jobs in service industries with even lower paid jobs, and hope that this is somehow going to lead us out of recession. 

I think not.


----------



## Firefly

Complainer said:


> I see. So as I suspected, the plan is displace existing minimum wage jobs in service industries with even lower paid jobs, and hope that this is somehow going to lead us out of recession.
> 
> I think not.



This would be part of the solution yes. Lower wages will make Ireland competitive. Perhaps you might answer this question already asked...._"If businesses can offer their services at lower prices they will win more international business.....Do you think it is otherwise?" _


----------



## Complainer

Firefly said:


> This would be part of the solution yes.


Good to get some clarity that this not about creating new jobs, but is in fact about lowering wages in existing jobs.



Firefly said:


> Lower wages will make Ireland competitive. Perhaps you might answer this question already asked...._"If businesses can offer their services at lower prices they will win more international business.....Do you think it is otherwise?" _


As far as I can see, it is a false premise. What kinds of businesses and organisations who operate in the sub-minimum wage sector will be competing for international business?


----------



## Gekko

Complainer said:


> Good to get some clarity that this not about creating new jobs, but is in fact about lowering wages in existing jobs.
> 
> 
> As far as I can see, it is a false premise. What kinds of businesses and organisations who operate in the sub-minimum wage sector will be competing for international business?


 
Dell?


----------



## Purple

Complainer said:


> What kinds of businesses and organisations who operate in the sub-minimum wage sector will be competing for international business?


 None in this country but that's not the point and you know it. No amount of Strawman arguements will deflect from that.

As you are well aware the issue is lowering wages in general. 
In order to do so the floor from which wages start has to be lowered. In all of the socialist utopias’ around the world where everyone earns the same this isn't a factor but alas we are not North Korea. 
In the Capitalist West the proletariat are not yet enlightened enough and want to get paid more if they are more skilled and work harder than their neighbour. Alas we are part of that evil and flawed system.
Given these limitations my point above is valid.


----------



## Complainer

Gekko said:


> Dell?



What roles in Dell currently pay minimum wage?


----------



## Purple

Complainer said:


> What roles in Dell currently pay minimum wage?



You can be sure that the line operators in Poland (the jobs that used to be here) are getting less than our minimum wage.


----------



## Gekko

Gekko said:


> Dell?


 


Complainer said:


> What roles in Dell currently pay minimum wage?


 


Purple said:


> You can be sure that the line operators in Poland (the jobs that used to be here) are getting less than our minimum wage.


 
Precisely.

Dell is a good example of Ireland's ridiculously high minimum wage driving business elsewhere.


----------



## Sunny

No it's not. Dell would have moved anyway unless you wanted Dell to pay Irish workers the same wage as people earn in Poland. Do you really expect Ireland to compete with Eastern Europe and Asia when it comes to labour costs in manufacturing? The minimum wage should be scrapped but so should salary caps. Both are ridiculous. However, thinking it is a big problem economically is wrong. Even the IMF didn't care. They cared about flexibility in pay rates. Not the actual pay rates.


----------



## Complainer

Gekko said:


> Precisely.
> 
> Dell is a good example of Ireland's ridiculously high minimum wage driving business elsewhere.



The minimum wage has nothing to do with Dell's pay rates.


What level of cut in Irish wages would you think is necessary before Dell Ireland will compete with Dell Poland?


----------



## Gekko

Cutting the minimum wage is only one element of any potential restoration of our competitiveness.

All costs have to be looked at. Utilities, rent, rates, compliance fees, professional fees...everything.

But in my honest opinion, the minimum wage is far too high and we have to start somewhere so let's cut it.


----------



## onq

Purple said:


> None in this country but that's not the point and you know it. No amount of Strawman arguements will deflect from that.
> 
> As you are well aware the issue is lowering wages in general.
> In order to do so the floor from which wages start has to be lowered. In all of the socialist utopias’ around the world where everyone earns the same this isn't a factor but alas we are not North Korea.
> In the Capitalist West the proletariat are not yet enlightened enough and want to get paid more if they are more skilled and work harder than their neighbour. Alas we are part of that evil and flawed system.
> Given these limitations my point above is valid.



I agree that the issue is lowering wages in general, but pulling the support from under families most at risk is draconian.
With 85% of people still in gainful employment there is not huge downward pressure on prices in the economy overall.

Those who did drop prices last year, for example window suppliers and insulation installers, have recently put them up 20%.
This is because the anticipated orders from retrofits did not materialize and they need higher margins on sales to compensate.

If social welfare support is cut again facing into a third hard winter and another tough budget, don't be surprised if you see rioting on the streets of Dublin in the autumn.
All the pseudo-Progressive Democrats employers can then wander off to their retirement in their pads in the Cayman Islands.

The rest of us realize we have to work together to get our of this mess, not cut the legs off each other.

ONQ.


----------



## onq

Gekko said:


> Cutting the minimum wage is only one element of any potential restoration of our competitiveness.
> 
> All costs have to be looked at. Utilities, rent, rates, compliance fees, professional fees...everything.
> 
> But in my honest opinion, the minimum wage is far too high and we have to start somewhere so let's cut it.



Easy to point the finger, and totally irrelevant to the recovery.

Equally obvious to see that you're not working and living in Dublin on the minimum wage.

ONQ.


----------



## onq

Sunny said:


> No it's not. Dell would have moved anyway unless you wanted Dell to pay Irish workers the same wage as people earn in Poland. Do you really expect Ireland to compete with Eastern Europe and Asia when it comes to labour costs in manufacturing? The minimum wage should be scrapped but so should salary caps. Both are ridiculous. However, thinking it is a big problem economically is wrong. Even the IMF didn't care. They cared about flexibility in pay rates. Not the actual pay rates.



The current crisis is the result of greed and incompetence, not underpaying top executives.

If there is one thing everyone has had hammered home this time around, its that paying top wages doesn't buy competence.

I don't have a problem with salary caps especially if it encourages the overpaid incompetents in the derivatives, banking and finance sectors to move elsewhere.


ONQ.


----------



## Gekko

onq said:


> Easy to point the finger, and totally irrelevant to the recovery.
> 
> Equally obvious to see that you're not working and living in Dublin on the minimum wage.
> 
> ONQ.


 
Ah, the old cyclical argument that because the cost of living is high the minimum wage must also be high making the cost of living even higher.

Cutting our cost base will help the recovery. The minimum wage in the UK is the equivalent of €6.50. The minimum wage in Ireland should be cut to the same. To sooth the consciences of left leaners like yourself, the typically Irish fudge should be making the lower rate only applicable to new entrants.

All costs must be cut in Ireland.


----------



## Complainer

Gekko said:


> Cutting the minimum wage is only one element of any potential restoration of our competitiveness.
> 
> All costs have to be looked at. Utilities, rent, rates, compliance fees, professional fees...everything.
> 
> But in my honest opinion, the minimum wage is far too high and we have to start somewhere so let's cut it.



Lots of the now defunct PD mantras here, but precious little specifics about what kinds of jobs these moves will create.


----------



## onq

The minimum wage isn't so great that people on it are able to get into a bidding war with the better paid to push up prices.

Equally, if you cut the minimum wage, it will simply beggar  the lowest paid and won't actually reduce demand or prices overall.

To suggest that is the case is a logical impossibility.

We agree that all costs must be cut.


ONQ.


----------



## Gekko

Complainer said:


> Lots of the now defunct PD mantras here, but precious little specifics about what kinds of jobs these moves will create.


 
Apparently labour costs account for 25% of the cost of a meal in a restaurant.  Cutting the minimum wage should lead to reduced prices which would help tourism and domestic spending.

Wander into a shopping centre on a Sunday and take note of the number of retail units that are closed on Sunday.  Why are they closed, especially given footfall on Sundays should be relatively high?  Because the businesses cannot afford to pay their staff multiples of the minimum wage.  Sunday premiums should be abolished...in retail there is no weekend.


----------



## onq

Complainer said:


> Lots of the now defunct PD mantras here, but precious little specifics about what kinds of jobs these moves will create.




I don't see any sign that "all costs will be looked at" either.
The so-called regulator has just approved 22% gas price rise on top of a 12% ESB price rise, which is interfering with the market.
In a recession, the retailer gets squeezed if he wants to maintain market share because he's being screwed by the wholesaler and his customers cannot afford to pay more.
Suppliers of utilities treat their customers appallingly, abusing their dominant position supplying essential services to create upward only movements of prices, which affects both homes and businesses.

ONQ.


----------



## onq

Gekko said:


> Apparently labour costs account for 25% of the cost of a meal in a restaurant.  Cutting the minimum wage should lead to reduced prices which would help tourism and domestic spending.
> 
> Wander into a shopping centre on a Sunday and take note of the number of retail units that are closed on Sunday.  Why are they closed, especially given footfall on Sundays should be relatively high?  Because the businesses cannot afford to pay their staff multiples of the minimum wage.  Sunday premiums should be abolished...in retail there is no weekend.



Wander into the shopping centre during the week and see if the same shops are closed.
Those that have gone have gone because they cannot afford the leases.

Please could you also post references for your figures.
I don't disagree, but it improves the debate.

ONQ.


----------



## Gekko

onq said:


> Wander into the shopping centre during the week and see if the same shops are closed.
> Those that have gone have gone because they cannot afford the leases.
> 
> Please could you also post references for your figures.
> I don't disagree, but it improves the debate.
> 
> ONQ.


 
I'm talking about stores that are open Monday to Saturday.

That 25% figure comes from a Failte Ireland study which for some reason I can't reopen.

EDIT: [broken link removed]

It's actually 30%.


----------



## orka

Complainer said:


> Lots of the now defunct PD mantras here, but precious little specifics about what kinds of jobs these moves will create.


Equally true of the jobs that the pension levy and VAT reduction are supposed to fund and incentivise - getting back to one of the original thread topics from the article - why reduce VAT and charge a levy on pension funds when job creation is far from clear.


----------



## Complainer

Gekko said:


> Apparently labour costs account for 25% of the cost of a meal in a restaurant.  Cutting the minimum wage should lead to reduced prices which would help tourism and domestic spending.



So we're going to reduce wages of existing staff, and use that to pay a few extra staff. No increase in GNP there - just spreading the jam a little bit thinner, which will largely benefit the owners of the business.


----------



## Firefly

Complainer said:


> Good to get some clarity that this not about creating new jobs, but is in fact about lowering wages in existing jobs.




Lowering wages in existing jobs will mean profits for companies which means more expansion which means more jobs. Interestingly the minimum wage was introduced into Ireland in 2000, just about the time when we reached the top/end of our real boom here so we did quite well without it. In fact, from an economic perspective, what benefits did the minimum wage result in?



Complainer said:


> As far as I can see, it is a false premise. What kinds of businesses and organisations who operate in the sub-minimum wage sector will be competing for international business?



Any business who exports. Existing companies will expand here if costs are cheaper and new ones will locate....it's very basic economics.


Finally, I think it's rather pathetic that you slur mine and other arguements by comparing them to the PDs...our views have been around a lot longer than the PDs. Speaking for myself, I don't want anyone to be worse off, in fact wages will fall all over the private sector including my own but I see this as necessary to attract new business to get so many off the dole. 

Given that so many are protected by the Croke Park Agreement, alas, I fear that we'll face more taxes rather than cuts in wages and numbers.


----------



## ontour

Complainer said:


> So we're going to reduce wages of existing staff, and use that to pay a few extra staff. No increase in GNP there - just spreading the jam a little bit thinner, which will largely benefit the owners of the business.



More people will be working, gaining experience, they will use that experience to progress and increase their earnings.

Lower welfare costs require lower taxes resulting in higher disposable income in the economy.

If a portion of the jobs have an export focus there will be a knock on of more ancillary jobs.  More staff on the factory floor require more canteen staff, cleaners etc.  Based on increased competitiveness, these will be new jobs.


----------



## Firefly

_"If businesses can offer their services at lower prices they will win  more international business.....Do you think it is otherwise?" 

_


Complainer said:


> As far as I can see, it is a false premise.



Would you care to expand on this?


----------



## Purple

We are a small island off the coast of a larger island off the coast of Europe. I business based in Stuttgart is within 2 hours drive of 20 million people. We are at a massive disadvantage due to our location, our lack of industrial infrastructure and scale and our lack of pedigree in world-class manufacturing. German = quality, Swiss= quality, Japanese = quality and now Korean = quality. We’ve no Nokia, no Philips, no Siemens, no Samsung. 
In order for us to compete we have to be better and cheaper than our high-end competition. Were like a women working in an engineering firm in the 1970’s; we have to be better to overcome bias perception.
At the moment many Irish businesses are losing money, be the in export manufacturing or services or in domestic retail. The notion that employers would be able to harvest vast profits and bugger off to a tropical island if wages were cut is nonsense. This is about keeping businesses viable (or making them viable again).

As for being against cuts in wages because it would just “spread the jam a little thinner”, I thought that was what socialism was all about; spreading around what’s there so that everyone can get some.


----------



## Complainer

Firefly said:


> Lowering wages in existing jobs will mean profits for companies which means more expansion which means more jobs.


Or else it will mean more profits for business owners which are not reinvested, or else it will mean more profits for business owners which are moved or reinvested offshore. But you're also ignoring the other side of the coin - lowered wages means less spending, which means less retail jobs and less tax income.



Firefly said:


> Any business who exports. Existing companies will expand here if costs are cheaper and new ones will locate....it's very basic economics.


And again, for the Nth time, could you give some examples of export businesses that are paying minimum wage?



Firefly said:


> Finally, I think it's rather pathetic that you slur mine and other arguements by comparing them to the PDs...our views have been around a lot longer than the PDs.


The relevance is to the author of the original article.



ontour said:


> More people will be working, gaining experience, they will use that experience to progress and increase their earnings.


And maybe if things go really well, and they work really hard, they could just possible progress and increase their earnings right back to the current minimum wage level? It's the American dream come to Ireland - where you need 2 or 3 low paid jobs just to survive.



ontour said:


> Lower welfare costs require lower taxes resulting in higher disposable income in the economy.


There may indeed be some benefit here, though it is probably more to do with debt repayment than higher disposable income imho.


ontour said:


> If a portion of the jobs have an export focus there will be a knock on of more ancillary jobs.  More staff on the factory floor require more canteen staff, cleaners etc.  Based on increased competitiveness, these will be new jobs.


Again, I'm still in the dark as to what kind of export businesses pay minimum wage.





Firefly said:


> _"If businesses can offer their services at lower prices they will win  more international business.....Do you think it is otherwise?"
> 
> _
> 
> Would you care to expand on this?


I thought that I already had - I'm still in the dark about what kind of export businesses are paying minimum wage?


----------



## Firefly

Complainer said:


> Or else it will mean more profits for business owners which are not reinvested, or else it will mean more profits for business owners which are moved or reinvested offshore. But you're also ignoring the other side of the coin - lowered wages means less spending, which means less retail jobs and less tax income.



More profits will result in new entrants entering the market which will create more jobs



Complainer said:


> And again, for the Nth time, could you give some examples of export businesses that are paying minimum wage?




It's not a question of which export business are paying the minimum wage, rather that the minimim wage is a floor which wages are set above. Reducing the minimum wage will have downward presure on wages.



Complainer said:


> I thought that I already had - I'm still in the dark about what kind of export businesses are paying minimum wage?



You didn't...you said "As far as I can see, it is a false premise." and then went on to ask me another question!

Finally....back to the original topic...a simple question:

Do you think that our minimim wage level and social welfare rates are deterring people from seeking employment?


----------



## Sunny

Reducing the minimum wage will not create manufacturing jobs. It just won't. The rates of pay in German manufacturing firms are way higher our minimum wage because they are all governed by collective agreements. The rates of pay in German services sector are lower. Now, we might create a few jobs in the services sector but because much of services jobs are created by domestic demand, the impact is likely to minimal. 

By all means, get rid of the minimum wage but it will not lead to some sort of economic nirvana.


----------



## Chris

Complainer said:


> Would you care to give some kinds of examples of the kinds of business and industries that will create new jobs (not displace existing jobs) by offering wages below the current minimum wage level?


See this is the thing about economics and the future, *nobody knows*. And as inconvenient as that is, absolutely nothing can be done about it. I know that there are plenty of politicians and socialists in general that believe that they can influence what is invested where and what the outcome will be. But they are all very wrong.
Hayek summed it up perfectly in this quote: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."

Unemployment is the result of a price mismatch between supply of and demand for jobs. I think I made a pretty good analogy in an earlier post. It doesn't matter what jobs will be created, the important thing is to balance supply and demand of work. The law of supply and demand is ubiquitous in economics, just like gravity in the world of physics. 



Complainer said:


> I'll repeat the question - maybe instead of repeating the tired old mantras of the defunct PDs, you could give some kinds of examples of the kinds of business and industries that will create new jobs (not displace existing jobs) by offering wages below the current minimum wage level?


Please don't compare the comments that oppose your views to the PDs. Under the PDs government grew hugely, minimum wage went up massively, welfare entitlements went up, regulations increased across the board. All these things are the exact opposite of free market and classical liberal economics.



Complainer said:


> So we're going to reduce wages of existing staff, and use that to pay a few extra staff. No increase in GNP there - just spreading the jam a little bit thinner, which will largely benefit the owners of the business.



Here's another lesson in basic economics for you. Increased profits means increased capital available for reinvestment, which results in increased employment. Increased profits also means increased competition from other "greedy" capitalists who want a piece of the pie, which means increased employment. Increased competition drives down prices, which increases demand further. 



			
				Complainer said:
			
		

> Or else it will mean more profits for business owners which are not reinvested, or else it will mean more profits for business owners which are moved or reinvested offshore.


And another little economic reality check that may not suit you. When profits start rising investment starts to flow in *not out*. When investment flows in an economy improves. The reason investment and capital is not flowing into Ireland is because investors do not see profits. When they do see profits their greed radar will focus on Ireland again.



			
				Complainer said:
			
		

> But you're also ignoring the other side of the coin - lowered wages means less spending, which means less retail jobs and less tax income.


And this completely ignores what actually happens. Let's say that wages are reduced and more jobs created resulting in the same amount of total wages. First of all this would not lower spending but keep it level. But for arguments sake let's say that spending did go down resulting in a lower revenue to retail businesses. Because now there are less people on welfare the rate of taxation can be lowered so the net effect on the economy is zero.


----------



## ontour

Complainer said:


> And maybe if things go really well, and they work really hard, they could just possible progress and increase their earnings right back to the current minimum wage level? It's the American dream come to Ireland - where you need 2 or 3 low paid jobs just to survive.



A person who has no job now has better prospects for the future by working for €7 an hour now than by staying on welfare.  Why do you assume that people would only progress to the min wage, surely with opportunities many people have the potential to reach great heights.  The more people that get a chance the better.



Complainer said:


> There may indeed be some benefit here, though it is probably more to do with debt repayment than higher disposable income imho.


Your point about debt repayments is valid but I am also thinking of the many people in their early twenties who don't have the large debts but have not had an opportunity to enter the workforce.



Complainer said:


> Again, I'm still in the dark as to what kind of export businesses pay minimum wage.



It is not about targeting only those on min wage, it is about all wage levels which are relative to a minimum wage.  In the food sector I would expect that there are many min / low pay jobs that are export focused.  Top 15 export food companies:

1. Kerry Group  
2. ARYZTA  
3. THE IRISH DAIRY BOARD CO-OP  
4. GLANBIA PLC  
5. KELLOGG EUROPEAN TRADING  
6. DAWN MEATS EXPORTS LTD  
7. ORIGIN ENTERPRISES PLC  
8. IRISH FOOD PROCESSORS  
9. DIAGEO  
10. ATLANTIC (Coca Cola) INDUSTRIES  
11. PEPSI-COLA MANUFACTURING  
12. KEPAK GROUP  
13. R & A BAILEY & CO  
14. GREEN ISLE FOODS LTD  
15. GREENCORE GROUP PLC


----------



## Firefly

Complainer said:


> And maybe if things go really well, and they work really hard, they could just possible progress and increase their earnings right back to the current minimum wage level? It's the American dream come to Ireland - where you need 2 or 3 low paid jobs just to survive.



Maybe they could start their own business? Maybe they could hire people at a rate that makes sense to expand their own business? But why bother when the social welfare rates are so high compared to the minimum wage?


----------



## onq

Gekko said:


> I'm talking about stores that are open Monday to Saturday.
> 
> That 25% figure comes from a Failte Ireland study which for some reason I can't reopen.
> 
> EDIT: [broken link removed]
> 
> It's actually 30%.



Thanks.

The reasons why I wanted to get behind the bare figures is quoted below.

From

[broken link removed]

P.2

Par 2.2.2.

_"LABOUR COSTS 25.2% INCL VAT

"Labour costs account for a considerable portion of the overall cost
structure within a restaurant (30.4% of revenue ex VAT across all
restaurants, with a figure of 29.4% for hotel restaurants and 31.2% for
stand-alone sites). *Labour is largely a fixed cost due to the minimum
staffing requirement to cook and serve a meal.*__ The cost of labour is
governed by a large amount of legislation intended to protect the
rights of employees. _In addition restaurants are regulated by JLC’s
who determine minimum remuneration and working conditions for
the sector. _*The JLC regulations have set rates of pay for the sector
above the national minimum wage*."_


*People*

"_*Labour is largely a fixed cost due to the minimum staffing requirement to cook and serve a meal.*_"

You need many people to source, prepare, cook, serve and clean away a restaurant meal.
Many of them are skilled people and people in training, working in a high pressure industry in often stressful and challenging working conditions

During the Tiger I spoke with a client who was a hotel owner who simply couldn't keep good staff to satisfy the growing demand for eating out.
Many were from out of town and working day to day or week to week, the preferred extortionate method of employers. It backfired on the employers because of the demand and because the restaurant employees operated a grapevine. 

Everyone wanted a piece of the restaurant action. As soon as an employer down the street was offering 50 per hour cents over the previous rate the employees left one establishment to seek the best pay elsewhere.
Market forces operated without let or hindrance and no one complained about the minimum rates because wages were well above them in many cases - how times change!


*Rates of Pay*

_*"*__*The JLC regulations have set rates of pay for the sector above the national minimum wage"*_

The cost of labour in restaurants heretofore hasn't been set by the minimum rate of pay, but by Joint Labour Committee agreements and Employment Regulation Orders made by the Labour Court.
The Decision of the High Court of 7th July 2011 made such agreements unconstitutional but agreements in place prior to that date continue.

New legislation is currently being formulated to address both the underlying weakness in existing legislation and concerns of employers and businesses in the current challenging trading conditions.
A brief summary of the current situation can be found here.

http://www.citizensinformation.ie/e...and_trade_unions/joint_labour_committees.html


*Overview*

The JLC's and ERO's came into being as a response to employers exploitative work practices in the restaurant trade.
Long hours, sometimes off the books and for a flat rate were the hallmarks of the industry before the JLC reformed employers practices.

Restaurant owners made good money out of a booming economy and cheap foreign labour (despite the poaching of staff caused by the incremental hourly rate increases referred to above).
In the last two years or so serious concerns about viability have arisen due to the economic downturn and questions have been asked about what the government will do about the situation as summarized here -

[broken link removed]

You will notice that, despite the high staff figure, upward-only rent reviews are also mentioned in the article.


*Reality Check*

Part of what we are seeing is a shake out of the market where a lot of premises, some on marginal locations that catered for an overall increase in footfall simply aren't getting the business.
Location is a huge determinant of how well a food and drink related business will do in challenging trading conditions.
Thus, while restaurants and cafés have closed elsewhere, at least five new restaurants have opened in Dalkey, Co. Dublin this year.

The originally quoted article offered broad brush-stroke analyses based on percentages of costs.
I think we should be looking at what the owners of restaurants are taking out of the business per annum for what in some cases may be merely a watching brief.
In other words, some contribute little or nothing and want their days on easy street to continue.

I suspect the few remaining who think like that are in for a surprise
The recent High Court decision has undoubtedly shaken up the market
But people's expectations of a fair days work for a fair days pay won't go away.
You still have to pay well in an open market to attract good staff to a quality restaurant.

ONQ.


----------



## Complainer

Firefly said:


> More profits will result in new entrants entering the market which will create more jobs


This is back to the more jobs at lower pay issue - no net increase in GNP - just spreading the jam around a bit thinner, with all the implications of that as outlined above.



Firefly said:


> It's not a question of which export business are paying the minimum wage, rather that the minimim wage is a floor which wages are set above. Reducing the minimum wage will have downward presure on wages.


Right, so this is about getting everyone's wages down, as we enter the winter with gas prices skyrocketing. Let's hope we don't get another spell of extended freezing temperatures this year.



Firefly said:


> Finally....back to the original topic...a simple question:
> 
> Do you think that our minimim (sic) wage level and social welfare rates are deterring people from seeking employment?


In the vast, vast majority of cases, no, I don't believe that minimum wages and SW rates are a deterrent. I believe the absence of any meaningful jobs, and the presence of 450k on the live register are the real deterrent.




Sunny said:


> Reducing the minimum wage will not create manufacturing jobs. It just won't.


Scary when we agree, isn't it.



Chris said:


> See this is the thing about economics and the future, *nobody knows*.


Even scarier when we agree, well nearly.


Chris said:


> It doesn't matter what jobs will be created, the important thing is to balance supply and demand of work.


I'd imagine that the important thing to the 450k people on the dole is to give them the opportunity to have a meaningful job, paid at a level that allows them to have a meaningful life here in Ireland.



Chris said:


> Please don't compare the comments that oppose your views to the PDs. Under the PDs government grew hugely, minimum wage went up massively, welfare entitlements went up, regulations increased across the board. All these things are the exact opposite of free market and classical liberal economics.


OK then, I'm sure it is entirely coincidental that the author of the original opinion piece was head honcho of the PDs for years, and that the piece is textbook PD policy. Pure coincidence.



Chris said:


> Here's another lesson in basic economics for you. Increased profits means increased capital available for reinvestment, which results in increased employment.


Here's a lesson in basic life for you - Increased profits means increased capital available for reinvestment does not mean that increased profits actually get reinvested. Some if it may get reinvested, and some of it will certainly go elsewhere.



Firefly said:


> Maybe they could start their own business? Maybe they could hire people at a rate that makes sense to expand their own business? But why bother when the social welfare rates are so high compared to the minimum wage?


Kinda difficult to start their own business and hire people when deflationary policies like those proposed here are repeatedly taking money out of the economy and reducing the little discretionary spending power left in the country.

I'm off for a while now, so I won't be able to respond. Have fun.


----------



## onq

"Scary when we agree, isn't it."

 - Complainer, AAM Post in the *"No jobs mantra suits the work-shy and welfare abuser"  *thread made 9th August 2011 @ 12:14 PM.

And I agree with you as well.

Taking money out of a stagnant economy whether through reducing dole payments or cutting the minimum wage will not create more economic activity or employment.

Banks that can lend, a freeze on utilities prices and tax rises and a private sector free of upward only rent reviews are what is required to help re-float the L.E. Ireland.

Of course if America goes under because of its policy of aggressive war we're all sunk and China will be picking up the pieces.

ONQ.


----------



## Gekko

A cut in the minimum wage would lead to cheaper meals. It would have to. Yes the chef is skilled and should be rewarded accordingly but the rest of the labour is unskilled and should be remunerated accordingly.

And saving money by cutting the dole is an end in itself...it's not necessary for such a move to do anything else but help the State finances.

People spoof about us "taking the pain" but the reality is that nobody has taken any pain relative to what needs to done. When the s..t hit the fan the gap between national income and expenditure was €20 billion. It's still €20 billion give or take a couple of billion. Somebody needs to grasp the nettle bigtime and do the following for starters:

- Cut the salaries of ALL public sector workers by 20%.
- Cut all welfare payment by 20%.
- Cut the number of TDs to 100.
- Abolish the Seanad.
- Rationalise RTE, move it to a small greenfield site on the outskirts of Dublin and sell off Montrose to the highest bidder.
- Cut consultants' annual salaries from €250,000 to €100,000. They'll still do the work because they need the access to private patients and resources (consultants in France are paid €85,000 per annum for this reason).
- Introduce a gigantic compulsory redundancy programme in the public sector. For example, get rid of the thousands of HR people working in the HSE. Pay no more than statutory redundancy. Slash and burn to rid the public sector of the tens of thousands of people who have no work to do.

What's happening right now is a joke.  We're navel gazing about a property tax of €100 which will raise €75 million per annum and all the while we're staring into a €20 billion per annum abyss.


----------



## Firefly

Complainer said:


> This is back to the more jobs at lower pay issue - no net increase in GNP - just spreading the jam around a bit thinner, with all the implications of that as outlined above.



More jobs = less people on the dole = less state borrowings..can't make it much simplier



Complainer said:


> Right, so this is about getting everyone's wages down, as we enter the winter with gas prices skyrocketing. Let's hope we don't get another spell of extended freezing temperatures this year.



Provided by a semi-state I might add. 



Complainer said:


> In the vast, vast majority of cases, no, I don't believe that minimum wages and SW rates are a deterrent. I believe the absence of any meaningful jobs, and the presence of 450k on the live register are the real deterrent.



So if the dole was halved tomorrow would you think these 450K people would stay at home or seek work / start working for themselves? I'm not interesting in the social aspects of this by the way for this debate, just the economic aspects which require us to borrow 18bn a year plus interest (which is compounding each year we have to borrow). 



Complainer said:


> Kinda difficult to start their own business and hire people when deflationary policies like those proposed here are repeatedly taking money out of the economy and reducing the little discretionary spending power left in the country.



You're right....this will take money out of the economy, but only in the short term. As the price of labour falls it will be a lot easier to start a business. Our costs vis a vis our European competitors will fall. This means we'll have lower export costs..this leads to an increase in demand for our products which will result in profits. This will attract new entrants into the market creating more employment.


----------



## Firefly

onq said:


> "_*Labour is largely a fixed cost due to the minimum staffing requirement to cook and serve a meal.*_"



So reducing wages would lead to even bigger savings as there are so many staff. 





onq said:


> Everyone wanted a piece of the restaurant action. As soon as an employer down the street was offering 50 per hour cents over the previous rate the employees left one establishment to seek the best pay elsewhere.
> Market forces operated without let or hindrance and no one complained about the minimum rates because wages were well above them in many cases - how times change!



I've absolutely no problems with that. Why then though when these market conditions changed do employees expect to hide and still base their pay on minimum wage rates? Do you think if the minimum wage was abolished that there would be as many restaurants closing?



onq said:


> You still have to pay well in an open market to attract good staff to a quality restaurant.
> ONQ.



Agree 100%. Any employer should pay what the market commands. With the exception of top-end restaurants, the waiting position is non-skilled. There are 450k people on the dole who could do this job if the social welfare was cut and it wasn't beneath them. I know I would do any job if I was out of work to try and put food on my table.


----------



## Purple

ONQ, JLC agreements pre-date the minimum wage. If you want protection then have one or the other but not both.


----------



## Purple

To those who oppose pay cuts in general; do you think that we have a competitiveness problem and if so how do we fix it (will pay cuts be part of the solution)?


----------



## Sunny

Purple said:


> To those who oppose pay cuts in general; do you think that we have a competitiveness problem and if so how do we fix it (will pay cuts be part of the solution)?


 
There will be a decline in wage levels as the market adjusts to the new supply and demand dynamics in the market. We are already seeing that where I work. We are hiring people on 20-30% less than they would have got a couple of years ago. You don't need to cut the minimum wage to achieve that. Very few people in this Country are on the minimum wage so not sure why people are fixated on it. I agree that we need to very careful that social welfare doesn't become a lifestyle choice but I don't agree that this necessarily means choping unemployment benefit for everyone just because they are looking for a certain amount time to try and get back into their chosen career. 

Competitiveness is about more than labour costs. It is to do with energy costs, transport costs, local authority rates, regulatory costs etc etc.


----------



## Firefly

Sunny said:


> Competitiveness is about more than labour costs. It is to do with energy costs, transport costs, local authority rates, regulatory costs etc etc.



I agree. Alas, most of these are provided by the government with little or no competition for the public to chose from.


----------



## Sunny

Not sure if this was already linked but it might be interesting for people

http://www.competitiveness.ie/media/NCC110623-cost_of_doing_business_2011.pdf


----------



## onq

Gekko said:


> A cut in the minimum wage would lead to cheaper meals. It would have to. Yes the chef is skilled and should be rewarded accordingly but the rest of the labour is unskilled and should be remunerated accordingly.
> 
> And saving money by cutting the dole is an end in itself...it's not necessary for such a move to do anything else but help the State finances.
> 
> People spoof about us "taking the pain" but the reality is that nobody has taken any pain relative to what needs to done. When the s..t hit the fan the gap between national income and expenditure was €20 billion. It's still €20 billion give or take a couple of billion. Somebody needs to grasp the nettle bigtime and do the following for starters:
> 
> - Cut the salaries of ALL public sector workers by 20%.
> - Cut all welfare payment by 20%.
> - Cut the number of TDs to 100.
> - Abolish the Seanad.
> - Rationalise RTE, move it to a small greenfield site on the outskirts of Dublin and sell off Montrose to the highest bidder.
> - Cut consultants' annual salaries from €250,000 to €100,000. They'll still do the work because they need the access to private patients and resources (consultants in France are paid €85,000 per annum for this reason).
> - Introduce a gigantic compulsory redundancy programme in the public sector. For example, get rid of the thousands of HR people working in the HSE. Pay no more than statutory redundancy. Slash and burn to rid the public sector of the tens of thousands of people who have no work to do.
> 
> What's happening right now is a joke.  We're navel gazing about a property tax of €100 which will raise €75 million per annum and all the while we're staring into a €20 billion per annum abyss.



Its like the last year of debates on AAM hasn't happened reading this post.

This appears to be just a listing of first-year-accountancy Progressive Democrat principles - a monetarist agenda with no appreciation of the overall deflationary economic effects and social hardship it will cause.

Here is a clue.

Borrowing to fund the state is a given - live with it.

Reducing the need to borrow to fund the sovereign debt or reduce taxes is a good aspiration, but should never be an end in itself.

However - 

Reducing the total amount of money entering an economy is a deflationary measure.

Swiping 20% of the social welfare allowance is an "I'm all right jack" attitude that needs to be binned.

Its as much navel-gazing as ignoring the fact that we have petty criminals making money in fraudulent welfare claims and working on the black market.

This hits the exchequer in two ways - reduced tax take and increased social welfare payments and is a nettle that needs to be grasped firmly and rooted out.

But targeting dole scroungers while letter white collar fraudsters and criminals get away with ruining our economy? No, that's an unbalanced, unfair approach to our woes.

But by targeting those who fraudulently claim welfare and work on the black market you improve the position in two ways, fairly.

ONQ.


----------



## onq

Cutting overall spending by the government in a difficult economic situation will lead to deflation unless the private sector can invest or borrow to invest - and that's just to replace the money taken out by the cuts.
With the banks not lending and reducing demand world-wide because of the continuance of America's sucking its tax dollars out of the system and into the pockets of military contractors, the world economy continues to suffer.
Stopping America continuing to ruin its economy and waste scarce fossil fuels in a vain attempt to prop up dictators and created "influence" world wide would be a first step towards recovery.

Cutting costs to give people what they need will never reflate the  economy because there is a limited demand for utilities above  subsistence level.
Investing in research and innovation to give people things they don't  even realize they want - yet - that's the trick to making profits in a  global economy - just ask the guy who invented the iPhone or Facebook.
We need to get out of the "cut, cut, cut" mentality and get on the positivity and creativity diet.

ONQ.


----------



## Firefly

onq said:


> Borrowing to fund the state is a given - live with it.
> ONQ.


For investment purposes like building roads,schools this can be true. A cost-benefit analysis can be performed etc. However, we're borrowing 4,500 euro per year for every man, woman and child living in this country. This will have to be repaid (with interest). Does this not alarm you?


----------



## onq

Purple said:


> To those who oppose pay cuts in general; do you think that we have a competitiveness problem and if so how do we fix it (will pay cuts be part of the solution)?



Defining products in terms of price instead of supply and demand misses the point.
Looked at solely in terms of price, reducing money going into the local economy through pay cuts is a barren agenda unless it increases productivity and reduces cost of the product - BELOW THE COMPETITOR'S PRICE!



 Is Ireland able to compete on a global scale with India or China on Labour costs? No.


 Is it possible to sell similar products for a higher price than a competitor? Yes.


 Is it possible to clean up the market with a game-changing new product? Absolutely!
 
So lets stop concentrating exclusively on the price - reducing the cost base needs a broad approach anyway - and start concentrating on leading innovation and change, using our money better as opposed to spending less of it.



 Spending less money will deflate the economy.


 Using this money better will help the economy to recover.
 
And remember -



 You will earn a living selling people what they need.
 

 You will make your fortune selling people what they want.
 
ONQ.


----------



## onq

Firefly said:


> For investment purposes like building roads,schools this can be true. A cost-benefit analysis can be performed etc. However, we're borrowing 4,500 euro per year for every man, woman and child living in this country. This will have to be repaid (with interest). Does this not alarm you?



No, I'm not alarmed Firefly.

I've lived here through the seventies and eighties and seen us bounce back from corrupt governments and economic Armageddon before.
I can still remember Haughey on the T.V. telling us that "we are all living way beyond our means" - a confession by him at the time if only we had known.

Its why I disagree with austerity measures imposed by government and international financiers beyond a certain point, which I believe has been reached - beyond that point lies Anarchy, something quite deeper and less capricious than the opportunistic looting we've seen in the UK recently.

Its why I have such a huge distrust of people in gainful employment or in the professions finance or accounting targeting the unemployed in their rhetoric about "what we should do".

Its why people who think they can cut their way out of a recession need to be countered in all forums.

Employers and retailers never stop finding ways of lining their pockets.
Especially in recessions - a prime time to exploit workers and consumers.
Now they're upset because people won't play at the prices they are offering.

They want to threaten people who've worked all their lives and paid tax with dole reductions.
At the very time such hard-working people are down on their luck they want to bury them financially.

All this is being done in the name of "increasing competitiveness" and tarring them as dole scroungers when they are anything but.
I don't think these pseudo intellectuals can even guess what's coming down the road if matters get out of hand.
The Times they are a-changin'... let's see what they bring.

ONQ.


----------



## Firefly

onq said:


> Is Ireland able to compete on a global scale with India or China on Labour costs? No.



I totally agree. We should however be as cheap or cheaper than our European competitors



onq said:


> Is it possible to sell similar products for a higher price than a competitor? Yes.



I agree, but not on a large scale. 



onq said:


> Is it possible to clean up the market with a game-changing new product? Absolutely!



Again I agree. The only thing is that we would need an aweful lot of them in a hurry.



onq said:


> So lets stop concentrating exclusively on the price - reducing the cost base needs a broad approach anyway - and start concentrating on leading innovation and change, using our money better as opposed to spending less of it.



This should be part of our medium term planning. In the short term we need to reduce our borrowing so that we don't have that difficult conversation with our children down the line. 



onq said:


> Using this money better will help the economy to recover.



How? Can you provide examples of this whereby our annual borrowing requirement is not increased further?


----------



## Firefly

onq said:


> No, I'm not alarmed Firefly.
> ONQ.



Hi ONQ,

The 80s were bad definately and we did pull through. There were a number of factors that led to this and they would make interesting reading. As bad as things were though we didn't have the level of public debt we now have. The following graphs helps to illustrate this:

[broken link removed]

This is only to the end of last year so the actual figure is a lot higher. Any future increase in economic activity will be reduced by this burden. It's hard to see without HUGE changes and partial default how we can get out of this.


----------



## onq

Firefly said:


> So reducing wages would lead to even bigger savings as there are so many staff.


Personally I don't think it will - I think the logic that suggests this is trite, faulty. And if saving occur, they won't be passed on to the consumer. The employer will pocket them.


> I've absolutely no problems with that. Why then though when these market conditions changed do employees expect to hide and still base their pay on minimum wage rates? Do you think if the minimum wage was abolished that there would be as many restaurants closing?


Hide? They expect to live! Unless costs fall cross the board in all sectors that won't happen. It won't happen. Those at the bottom will suffer most. As usual.
Yes, the minimum wage thing is employers whinging about having to pay employees instead of pocketing it themselves. Just look at the outrageous prices still being charge in shops for goods like sweets and compare the prices of exactly the same product in Britain. 65 cent for a packet of crisps here that costs 45 cent there.


> Agree 100%. Any employer should pay what the market commands. With the exception of top-end restaurants, the waiting position is non-skilled. There are 450k people on the dole who could do this job if the social welfare was cut and it wasn't beneath them. I know I would do any job if I was out of work to try and put food on my table.


Employers pay what they say they can afford. Nothing more. Until no-one wants to work for them at that price, then they start attacking the dole queues and social welfare payments.

As for people working in restaurants, they are not simply paid for their time. Waiters for example are front of house staff dealing with customers. Kitchen staff have a plethora of health and safety and food safety regulations to satisfy. They are skilled people, not unskilled. Not valuing anyone below the boardroom is the rock on which badly run businesses founder. Pay peanuts if you want monkeys.

Irish businesses may have recently learnt to respect their customers. Now they need to learn to respect the dignity of their employees. And contributors to AAM need ot learn to respect the dignity of those who through no fault of their own have no work.

=================================

As for your comment - "I know I would do any job if I was out of work to try and put food on my table" - here is a clue.

You wouldn't. You would hold out for the best job you could do with your skillset. You'd be stupid not to.

And if you applied for jobs below your skill level or qualification you'd be rejected as over-qualified.

I've done my research on this.

ONQ.


----------



## onq

Firefly said:


> Hi ONQ,
> 
> The 80s were bad definately and we did pull through. There were a number of factors that led to this and they would make interesting reading. As bad as things were though we didn't have the level of public debt we now have. The following graphs helps to illustrate this:
> 
> [broken link removed]
> 
> This is only to the end of last year so the actual figure is a lot higher. Any future increase in economic activity will be reduced by this burden. It's hard to see without HUGE changes and partial default how we can get out of this.



Maybe it'll take huge changes and default.

The banking world needs to change.

I'm still not alarmed.

We'll survive.

ONQ.


----------



## Gekko

onq said:


> ignoring the fact that we have petty criminals making money in fraudulent welfare claims and working on the black market


 
And such people should be hammered.

You seem to delight in branding people "PDs".  However, you could easily be branded a socialist head in the sand merchant.

Simple Micawberism will solve our woes:

"_Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery_"

First we must eliminate waste - That means hammering fraudsters (i.e. welfare cheats, tax evaders etc), making dead wood redundant (e.g. the surplus of HR staff in the HSE) and putting our level of representation on a par with that in the UK.

Then we must raise money by selling off non strategic assets (e.g. Montrose).

Finally we should broaden our tax base and learn a lesson from the last decade.

Simplicity is what's called for...not a decade of navel gazing.  If there are 10,000 people in the HSE doing sweet FA, you get rid of them.  Your criticism of my points is clearly meant to be offensive but I actually find it encouraging.  Gombeenery and a civil service riddled with conservatism and inertia make it nigh on impossible to get anything done in this country.


----------



## Firefly

onq said:


> Personally I don't think it will - I think the logic that suggests this is trite, faulty. And if saving occur, they won't be passed on to the consumer. The employer will pocket them.
> ONQ.



Think we're going around in circles here. If the employer pockets this additional money, they'll attract new entrants to the market who will take another x amount of people off the dole.



onq said:


> Yes, the minimum wage thing is employers whinging about having to pay employees instead of pocketing it themselves.
> ONQ.



As above



onq said:


> Just look at the outrageous prices still being charge in shops for goods like sweets and compare the prices of exactly the same product in Britain. 65 cent for a packet of crisps here that costs 45 cent there.
> ONQ.



It is frustrating when you see that. Perhaps it's the higher costs of doing business here, primarily in the cost of labour that accounts for this difference. If the prices were too high and profits too large, again this would encourage new market entrants.


ONQ.[/QUOTE]



onq said:


> As for people working in restaurants, they are not simply paid for their time. Waiters for example are front of house staff dealing with customers. Kitchen staff have a plethora of health and safety and food safety regulations to satisfy. They are skilled people, not unskilled. Not valuing anyone below the boardroom is the rock on which badly run businesses founder. Pay peanuts if you want monkeys.
> ONQ.



As pointed out earlier, during the good times these staff hopped from employer to employer chasing higher wages. Why should employers in a recession behave differently? Why shouldn't they seek to reduce their costs as much as the market will bear?



onq said:


> Irish businesses may have recently learnt to respect their customers. Now they need to learn to respect the dignity of their employees.
> ONQ.



I'm not sure they don't respect their employees which are protected by all sorts of laws. This is just economic supply and demand of labour for a particular industry. If the wages offered are too low then you're right the restaurants won't get good quality staff...surely that should be for the restaurant to decide though?


----------



## Gekko

onq said:


> Just look at the outrageous prices still being charge in shops for goods like sweets and compare the prices of exactly the same product in Britain. 65 cent for a packet of crisps here that costs 45 cent there


 
The (presumably unskilled) person serving you the crisps in the UK more than likely earns €6.50 per hour.

The (presumably unskilled) person serving you the crisps in Ireland more than likely earns €8.65 per hour.

The price differential is obviously related to the above.


----------



## Chris

Complainer said:


> I'd imagine that the important thing to the 450k people on the dole is to give them the opportunity to have a meaningful job, paid at a level that allows them to have a meaningful life here in Ireland.


Hey, we agree again, but at the moment they have no job at all, and while they are not working they are not learning new on the job skills. And as I have pointed out many time at this stage, the reason there are unemployed people is because of an artificial mismatch in price of supply and demand. Keeping that artificial interference there will not reduce the number of unemployed.



Complainer said:


> OK then, I'm sure it is entirely coincidental that the author of the original opinion piece was head honcho of the PDs for years, and that the piece is textbook PD policy. Pure coincidence.


First of all classical liberal/free market theory pre-dates the PDs by centuries. Secondly, the PDs may have talked about free markets, but absolutely nothing they actually did was anything remotely comparable to free market theory.



Complainer said:


> Here's a lesson in basic life for you - Increased profits means increased capital available for reinvestment does not mean that increased profits actually get reinvested. Some if it may get reinvested, and some of it will certainly go elsewhere.


You are absolutely right. But again the reason why they are not investing here is because there are no or insufficient profits. The higher the profits the higher the investment will be. The situation we have now is that government action is decreasing profitability which is exacerbating the problem. As much as you may choose to ignore this it is not going to go away.




onq said:


> Taking money out of a stagnant economy whether through reducing dole payments or cutting the minimum wage will not create more economic activity or employment.


Government *cannot* increase funds within an economy. Any money it pumps in has to be taken out through taxation! 



Gekko said:


> What's happening right now is a joke.  We're navel gazing about a property tax of €100 which will raise €75 million per annum and all the while we're staring into a €20 billion per annum abyss.


Couldn't agree with you more.



Purple said:


> To those who oppose pay cuts in general; do you think that we have a competitiveness problem and if so how do we fix it (will pay cuts be part of the solution)?


To entice investment the only thing that government can do is is reduce the costs it burdens on companies. This includes corporate tax, VAT, council rates, employer PRSI, and also minimum wages. In my opinion all of these should be reduced.



onq said:


> This appears to be just a listing of first-year-accountancy Progressive Democrat principles - a monetarist agenda with no appreciation of the overall deflationary economic effects and social hardship it will cause.


Not that PD nonsense again. Please tell me when the PDs actually did anything to reduce the size of government, reduce welfare payments, or reduce anything that government did?
The social hardship has its roots in the unemployment. Discouraging people to take lower paid work does absolutely nothing to increase employment and therefore does nothing to alleviate social hardship.



onq said:


> Borrowing to fund the state is a given - live with it.


Borrowing to fund the state is why most of the western world is in such a dire situation. Such a statement is like an alcoholic saying that drinking alcohol is a given. 



onq said:


> Reducing the total amount of money entering an economy is a deflationary measure.


Let me repeat it again for you. Government can only put money into the economy which it takes out of the economy!!!



Firefly said:


> For investment purposes like building roads,schools this can be true. A cost-benefit analysis can be performed etc. However, we're borrowing 4,500 euro per year for every man, woman and child living in this country. This will have to be repaid (with interest). Does this not alarm you?



It scares the hell out of me anyway.


----------



## Firefly

Chris said:


> It scares the hell out of me anyway.



Off topic, but I think this will ultimately lead to people with "good" jobs and skills leaving purely because the tax rates will be so high to repay this borrowing.


----------



## Chris

ONQ said:
			
		

> Is it possible to sell similar products for a higher price than a competitor? Yes.





Firefly said:


> I agree, but not on a large scale.



Actually this is only possible if the product is of higher quality as perceived by the customers.


----------



## Sunny

This thread is going around in cirlces


----------



## Firefly

Chris said:


> Actually this is only possible if the product is of higher quality as perceived by the customers.



You're right as in the case of the perceived superiority of German products. Again though this will take some time to arrive at.


----------



## onq

Gekko said:


> And such people should be hammered.
> 
> You seem to delight in branding people "PDs".  However, you could easily be branded a socialist head in the sand merchant.


I could, but that would brand you as a PD who doesn't take the others point - a TRUE PD - LOL!

My position in this and other debates is clear and manifold.

Taking dole money from those who've cut their costs and need it to survive and ARE ENTITLED TO IT ON THE BASIS OF TAX PAID! - is simply wrong.

It is taking money from those who cannot afford to pay for the high salaries of those in the public sector and emergency services.

Taking money from dole scroungers however is simple justice - I wholeheartedly support this.

Asking unskilled people to "work" for their dole money at menial tasks that would normally attract the minimum wage - I wholeheartedly support this. It has many potential benefits.

Asking people who are highly skilled or professionals of many years standing to do menial work for the minimum wage is demeaning and certainly isn't using this currently unemployed resource to best advantage.


> Simple Micawberism will solve our woes:
> 
> "_Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery_"


Nope - result short term borrowing until matters can be sorted. Please don't quote the Grandaddy of the PD mantras at me - the exploitation of factory workers in Dark Satanic Mills by the Victorians! 
Hint: you are now in a hole - stop digging.


> First we must eliminate waste - That means hammering fraudsters (i.e. welfare cheats, tax evaders etc), making dead wood redundant (e.g. the surplus of HR staff in the HSE) and putting our level of representation on a par with that in the UK.


Nope. All of this must be done gradually and well. It is Change Management on a massive scale, and we have secured the funding to allow this to be done well, as opposed to badly and precipitously.

I'm sure you have a PD pamphlet somewhere telling you about that new-fangled Human Resources thing that started coming in back in the 1950's in America? Well managing an electorate is like managing a very sensitive workforce.

Threatening immediate job losses isn't good HR Management. And this isn't socialism. its advanced Monetarism - what the PD's should have been if they had had both brains and compassion as opposed to merely a monetarist agenda and a bold face.


> Then we must raise money by selling off non strategic assets (e.g. Montrose).


Nope. Tired of seeing the value in state assets go to the private sector. Tired of seeing unaccountable corruption in De Meeja. Tired of seeing re-runs of American soaps masquerading as Culture. We keep RTE, but we cut Kenny's salary by 60%.


> Finally we should broaden our tax base and learn a lesson from the last decade.


Its a favourite deflection of those with the most money when they see the taxman cometh - broaden the tax base. In other words take more from those who earn less as opposed to me, with my five houses, my yacht and my kids in a Swiss finishing school.

Sorry, but the high rollers are going to lose their passports if they go "tax exile" as far as I'm concerned. They've sucked money from the country into their foreign bank accounts and now they don't even pay tax on deposit interest? Hand over the passport son!


> Simplicity is what's called for...not a decade of navel gazing.  If there are 10,000 people in the HSE doing sweet FA, you get rid of them.  Your criticism of my points is clearly meant to be offensive but I actually find it encouraging.  Gombeenery and a civil service riddled with conservatism and inertia make it nigh on impossible to get anything done in this country.



Nope. A complex and well thought out balanced strategy is required, not a sop to those less bright who have against all the odds managed to stay in gainful employment through this recession or parlayed their limited abilities onto some government Quango or other.

Subtlety and change management and treating everyone with dignity and respect is what's called for, not the poorly measured response of broad brushstroke cuts that centre on the less well off and unemployed.

Capping all consultants, and senior positions salaries in government offices, civil and public service jobs and state-owned banks at €150,000 a year would be a good start towards making some cuts.

Full vouching of expenses claims and full vetting of claims incurred so that they are relevant.
No foreign junkets, seminars or "fact-finding" missions this year and a maximum of two seminars on subjects that are directly relevant to the Continuous Professional Development necessary to support the job description will see a significant tranche of taxpayers money saved.

But as I said, take this money out of circulation, lower discretionary income and you end up with a deflationary spiral.

That's why people are navel gazing, intelligent people, experienced people, people who understand complex economic and financial problems.

They KNOW that cuts - however justified - however morally and fiscally correct, won't solve this economic crisis.

Cuts will do us harm in the long run without private investment to replace the money cuts take out of the economy.

This is the hurdle the PD mentality falls at again and again.

Cutting spending reduces the total amount of money in circulation and costs jobs.
Cutting the minimum wage without using the money saved to increase jobs reduces the total amount of money in circulation.
Cutting the social welfare for deserving recipients without cutting costs across the board [particularly utility bills] reduces the total amount of money in circulation and makes a difficult situation intolerable.

So there is a difficult balance to be struck and a period of navel gazing required before a decision is made.

Then there will be the inevitable consequences of any decision.

ONQ.


----------



## onq

> Originally Posted by *onq* http://www.askaboutmoney.com/showthread.php?p=1191955#post1191955
> _Taking money out of a stagnant  economy whether through reducing dole payments or cutting the minimum  wage will not create more economic activity or employment._
> 
> Government *cannot* increase funds within an economy. Any money it pumps in has to be taken out through taxation!



 Straw man argument.
All my posts in this thread responded to the stated aim of taking money out of the economy, not putting money in.

Your point is correct as far as it goes, but fails to acknowledge current western economic practice which has fuelled economic growth through credit for over a hundred years. Now you can deny this if you want to lose all credibility, but don't ignore it.



> Originally Posted by *onq* http://www.askaboutmoney.com/showthread.php?p=1192030#post1192030
> _This appears to be just a listing  of first-year-accountancy Progressive Democrat principles - a monetarist  agenda with no appreciation of the overall deflationary economic  effects and social hardship it will cause._
> 
> Not that PD nonsense again. Please tell me when the PDs actually  did anything to reduce the size of government, reduce welfare payments,  or reduce anything that government did?



"Not that PD nonsense again."
That was my first reaction, but I thought Brendan might be annoyed if I used that tone instead of making a reasoned argument.

I referred to the previous comments as "_first-year-accountancy Progressive Democrat principles"_ in other words, badly thought out stuff that wasn't followed through. Thank you for pointing out that the PD's did not live by their convictions. In fact, instead of trimming the civil services oversaw an additional 90,000 people being employed by the state during their time in government.

I don't rate the PDs or Latter-Day Monetarists. Simplistic approaches to economics tend to blow up in your face but farming core government work out to "consultants" was never on either.

They still had no excuse for kow-towing to the unions and taking on all those extra bodies in the civil service. I'd love a breakdown of that alleged 90,000 figure (which I have to say I have no link for).



> The social hardship has its roots in the unemployment. Discouraging   people to take lower paid work does absolutely nothing to increase   employment and therefore does nothing to alleviate social hardship.



State the obvious and then rebut straw man arguments.
I've already addressed the issue of requiring people to work for their dole money as a Good Thing.

Social hardship was only ever going to increase from the time we started to consider Globalized Trade.



> Originally Posted by *onq* http://www.askaboutmoney.com/showthread.php?p=1192030#post1192030
> _Borrowing to fund the state is a given - live with it._
> 
> Borrowing to fund the state is why most of the western world is in  such a dire situation. Such a statement is like an alcoholic saying  that drinking alcohol is a given.



An extreme and unjustified comment given the fact that America has managed to survive by rolling over its debt since WWI.



> Originally Posted by *onq* http://www.askaboutmoney.com/showthread.php?p=1192030#post1192030
> _Reducing the total amount of money entering an economy is a deflationary measure._
> 
> Let me repeat it again for you. Government can only put money into the economy which it takes out of the economy!!!



Watch that shake!!!!111!1!!1!1!1111!! LOL!

You have just admitted - and I quote:

_"Borrowing to fund the state is why most of the western world is in  such a dire situation."_

Borrowing therefore rebuts your point above, and is a well used mechanism endorsed by all western governments.

Unregulated market speculation and uncertainty is what causes the problems we are experiencing at the moment, whether the previous property market or the current international finance market.

The people who like to think they run the world are screwing us over.

And we're letting them, sucking on their mantra of "the free market will find a way".

In fact the free market is the last resort of the pirates and scoundrels who destroy economies and wage illegal wars.

Full spectrum dominance and it needs to be challenged - and soon.


----------



## darag

onq said:


> Borrowing therefore rebuts your point above, and is a well used mechanism endorsed by all western governments.


No, it is not.  It may be "endorsed" by the renowned beacons of good-governance like Greece, Ireland (since 2000), the US (post-Clinton), Italy, etc.

It is not endorsed in Switzerland, Scandinavian countries, Canada, Australia, Ireland (1990 to 2000) etc.

Historically the size of a country's fiscal deficit is a pretty reliable indicator of how incompetently it is being run or how distressed it is.

Fiscal economics is not complicated; a country borrowing money to pay for day-to-day expenses is no more sustainable than an individual building up credit card debt to cover regular expenses.  Both behaviors end in ruin.  It's simple arithmetic.


----------



## Chris

onq said:


> Taking dole money from those who've cut their costs and need it to survive and ARE ENTITLED TO IT ON THE BASIS OF TAX PAID! - is simply wrong.


While this is a nice argument it ignores the fact that the welfare system is a pay as you go system. Contributions are not set aside, but directly paid to the current recipients. There is nothing in a pot that has your name on it. It is a massive government mandated ponzi scheme. And those that come late to the party are the ones that lose out.



onq said:


> Asking people who are highly skilled or professionals of many years standing to do menial work for the minimum wage is demeaning and certainly isn't using this currently unemployed resource to best advantage.


I agree, but unemployed skilled workers should not be given unlimited time to find work, the time frame should be short. And I also agree with making people of any background do something in return for welfare payments.



onq said:


> Nope - result short term borrowing until matters can be sorted. Please don't quote the Grandaddy of the PD mantras at me - the exploitation of factory workers in Dark Satanic Mills by the Victorians!


But none of the countries that are in trouble only borrow short term. They massively borrow in the bad times and then borrow some more in the good times. 



onq said:


> Nope. All of this must be done gradually and well. It is Change Management on a massive scale, and we have secured the funding to allow this to be done well, as opposed to badly and precipitously.


It is because this is being done gradually that Ireland is in such a mess, that should be pretty obvious now that after 4 years since the crisis began government has only achieved somewhere between €3bn - €5bn in spending cuts.



onq said:


> I'm sure you have a PD pamphlet somewhere telling you about that new-fangled Human Resources thing that started coming in back in the 1950's in America? Well managing an electorate is like managing a very sensitive workforce.
> 
> Threatening immediate job losses isn't good HR Management. And this isn't socialism. its advanced Monetarism - what the PD's should have been if they had had both brains and compassion as opposed to merely a monetarist agenda and a bold face.


Please provide one piece of evidence that puts the PDs in the monetarist camp? And just to clarify things, monetarists are not in favour of deflation, quite the opposite.



onq said:


> Its a favourite deflection of those with the most money when they see the taxman cometh - broaden the tax base. In other words take more from those who earn less as opposed to me, with my five houses, my yacht and my kids in a Swiss finishing school.


It's actually a case of making those who contribute nothing in income tax to contribute something. Is this the new definition of fairness where a small group of people pick up the tab while 50% pay nothing?



onq said:


> Sorry, but the high rollers are going to lose their passports if they go "tax exile" as far as I'm concerned. They've sucked money from the country into their foreign bank accounts and now they don't even pay tax on deposit interest? Hand over the passport son!


Let me ask you this, do you think Ireland would be better off if these high wealth individuals gave up their citizenship to continue not paying taxes here?



onq said:


> They KNOW that cuts - however justified - however morally and fiscally correct, won't solve this economic crisis.


Then maybe you could point to some time in history where an economic crisis was solved by not cutting spending? Let me give you a hint, they do not exist. Your argument was spouted out in the US in 1921 and 1945, i.e. under no circumstances stop spending money or there will be a massive bust. The exact opposite happened in 1922 and 1946 *after* government slashed spending.




onq said:


> Cuts will do us harm in the long run without private investment to replace the money cuts take out of the economy.


Money government spends has to be taken out of the economy, there is no net gain!!!



onq said:


> This is the hurdle the PD mentality falls at again and again.


Please provide some proof that the PDs ever advocated actual cuts in spending, this fictitious argument is getting tiring.



onq said:


> Cutting spending reduces the total amount of money in circulation and costs jobs.
> Cutting the minimum wage without using the money saved to increase jobs reduces the total amount of money in circulation.
> Cutting the social welfare for deserving recipients without cutting costs across the board [particularly utility bills] reduces the total amount of money in circulation and makes a difficult situation intolerable.


Nonsense, nonsense, nonsense. Any money that government cuts in spending is money that it doesn't have to take out of the economy, whether that be through taxation or borrowing. It cannot be made more clear than that.



onq said:


> Straw man argument.
> All my posts in this thread responded to the stated aim of taking money out of the economy, not putting money in.


The point was that government cannot add to the economy without taking money out. When government spends less then it takes less money out of the economy, which means that there is no net loss to the economy.



onq said:


> Your point is correct as far as it goes, but fails to acknowledge current western economic practice which has fuelled economic growth through credit for over a hundred years. Now you can deny this if you want to lose all credibility, but don't ignore it.


This is simply not true. Until the 60s, western governments only went into debt heavily in order to finance wars. Since the 60s the western world has seen ever deeper crises in shorter succession than ever before. The time of the industrial revolution saw the biggest economic growth in history, while public debt was pretty much non-existent. All that government borrowing has done is cause crises and hamper growth in the private economy.



onq said:


> State the obvious and then rebut straw man arguments.
> I've already addressed the issue of requiring people to work for their dole money as a Good Thing.


How is this a straw man argument. We are talking about unemployment and you add in social hardship. Then I point out the root of social hardship is the unemployment itself.



onq said:


> Social hardship was only ever going to increase from the time we started to consider Globalized Trade.


I don't even know where to start with this comment. Do you think that the world would be a better place if every country had to make everything it needed itself? Or am I missing something?



onq said:


> An extreme and unjustified comment given the fact that America has managed to survive by rolling over its debt since WWI.


Let's take a look at the facts before we come to such fallacious conclusions. US debt to GDP was pretty low until the 80s, it is now worse than during the Great Depression. The only reason the US has managed to roll over its debt in recent years is, especially this year, is because the Federal Reserve has been buying up 70% of issued debt. You can hardly argue that that proves the US has sustainable debt.



onq said:


> You have just admitted - and I quote:
> 
> _"Borrowing to fund the state is why most of the western world is in  such a dire situation."_
> 
> Borrowing therefore rebuts your point above, and is a well used mechanism endorsed by all western governments.


No it doesn't, but this comment does highlight some serious gaps in your understanding of economics. When government spends money it has to take it from somewhere. It does this either through immediate taxation or it borrows money which has to be later repaid (plus interest) by taking money out of the economy through taxation. Either way, government spending is financed by taking money out of the economy. If it is done through immediate taxation then people have less money in their pockets to spend now. If it is done through borrowing, then the private economy has less supply of capital at present and people in general have less money in the future. That is why credit fuelled government spending is worse than spending financed through immediate taxation. And it is because of the level of debt accumulated that so many countries are in trouble, while those countries with lower and sustainable levels of debt are not in trouble.



onq said:


> Unregulated market speculation and uncertainty is what causes the problems we are experiencing at the moment, whether the previous property market or the current international finance market.
> 
> The people who like to think they run the world are screwing us over.
> 
> And we're letting them, sucking on their mantra of "the free market will find a way".
> 
> In fact the free market is the last resort of the pirates and scoundrels who destroy economies and wage illegal wars.


We have absolutely nothing even remotely resembling a free market, and the biggest businesses in the world are not looking for freer markets, but more government intervention. They want bailouts and protection from foreign competition and tax breaks and subsidies and the list goes on. What they want is more of the system that is so spectacularly failing, and this is being sold to the public as the solution.
Absolutely none of this has anything to do with free market economics.


----------



## csirl

> Cutting spending reduces the total amount of money in circulation and costs jobs.
> Cutting the minimum wage without using the money saved to increase jobs reduces the total amount of money in circulation.
> Cutting the social welfare for deserving recipients without cutting costs across the board [particularly utility bills] reduces the total amount of money in circulation and makes a difficult situation intolerable.


 
This is completely untrue. Just because you cut spending in one area, it doesnt mean you dont spend the money saved. If the Goverrnment cuts spending on social welfare or unnecessary HSE staff, then it has more money available to spend on more useful things which may be a lot more beneficial to the economy. Alternatively, the Government could pass the savings on by reducing taxes thus leaving more money in the pockets of the citizens and businesses - which would boost the economy.


----------



## Purple

onq said:


> Asking unskilled people to "work" for their dole money at menial tasks that would normally attract the minimum wage - I wholeheartedly support this. It has many potential benefits.
> 
> Asking people who are highly skilled or professionals of many years standing to do menial work for the minimum wage is demeaning and certainly isn't using this currently unemployed resource to best advantage.



That's on eof the most elitist posts I've ever read on AAM. A persons skills are worth only what someone is willing to pay for them. If nobody wants to pay for them then they are worth zip. We have a huge oversupply in many areas of the economy. It doesn't matter how skilled those people are there aint no work for them so here and now their skills are worthless.


----------



## Gekko

ONQ was obviously savaged by Michael McDowell's dog in Ranelagh a couple of years ago...mental scar tissue as a result of a terrible PD related experience is the only explanation I can think for his McCarthy-like "PDs under the bed" paranoia about any proposals to address our current difficulties.


----------



## onq

darag said:


> No, it is not.  It may be "endorsed" by the renowned beacons of good-governance like Greece, Ireland (since 2000), the US (post-Clinton), Italy, etc.
> 
> It is not endorsed in Switzerland, Scandinavian countries, Canada, Australia, Ireland (1990 to 2000) etc.
> 
> Historically the size of a country's fiscal deficit is a pretty reliable indicator of how incompetently it is being run or how distressed it is.
> 
> Fiscal economics is not complicated; a country borrowing money to pay for day-to-day expenses is no more sustainable than an individual building up credit card debt to cover regular expenses.  Both behaviors end in ruin.  It's simple arithmetic.



Its simplistic rhetoric.

Where did you get the idea that we didn't borrow?
The first ten years of my post-graduate career were spent in Ireland 1990-2000 and I can confirm we borrowed during that time.

And if you refer to a country and its borrowing requirements, look at it in the round.
If a country has low borrowings and still provides a good level of civil service and state agencies, how is it funded?

No, its usually by imposing higher taxes.
These are the very reason we were so uncompetitive AND ran a deficit all through the Eighties.

The Socialist State doesn't work.
We've recently found that the Monetarist State regularly blows up in your face.
So less of the simplistic rhetoric and more subtle thought is needed to find a balanced way through the current crisis.

ONQ.


----------



## onq

Gekko said:


> ONQ was obviously savaged by Michael McDowell's dog in Ranelagh a couple of years ago...mental scar tissue as a result of a terrible PD related experience is the only explanation I can think for his McCarthy-like "PDs under the bed" paranoia about any proposals to address our current difficulties.



I'm sensitive to "solutions" based on an apparently limited grasp of economics at the national and international scale that include simplistic proposals about how to "fix" things which do not appear to have been thought through.

ONQ.


----------



## onq

Purple said:


> That's on eof the most elitist posts I've ever read on AAM. A persons skills are worth only what someone is willing to pay for them. If nobody wants to pay for them then they are worth zip. We have a huge oversupply in many areas of the economy. It doesn't matter how skilled those people are there aint no work for them so here and now their skills are worthless.



Let's set a baseline here.

If you forego ten years or more of gainful employment by remaining in education and training to become a competent professional you will expect to sell your skills at a premium, both to recoup your losses and as recompense for the higher duty of care you bear.

Is sort of like manufacturers margins.
Without profits you cannot pay for innovation and research and development, your brand loses place in the market and eventually fails.

Its like profit as a reward for enterprise.

Neither are guaranteed, but its certainly not élitist to expect them

Said premium for professional services is reasonable.

If the market no longer supports that price, you will be reduced to selling your skills at a level at which your business breaks even.

If you cannot sell your skills at that level you will go out of business.

----------------------------------

Now let's look at the condition you set.

"A persons skills are worth only what someone is willing to pay for them."

The lowest price person's skills are worth what that person is willing to perform them at. The lowest sustainable price is the break even point of the person's business. Recently we have seen many firms eating into their cash reserves to engage in below cost selling of skills and services. This is unsustainable and will result in those businesses failing.

----------------------------------

"If nobody wants to pay for them then they are worth zip."

My experience is that people still want to pay for them, therefore they are not "worth zip".

It is my experience that people who are not professionally qualified or competent to act as a professional begrudge the premium professionals charge, because they assume they are operating at a level, when they are not.

----------------------------------

Let me put the boot on the other foot.

Should a professional work as a sweeper for their dole money Purple, or should their skills be put to good use by the state?

It is a very short sighted administration that would not avail of the latter.

If the professional is then operating at a level which demanded you used your skills and experience, do you think it appropriate that he/she should do so for the minimum wage?

The fact is they cannot supply their services at the minimum wage

----------------------------------

A fair days pay for a fair days work is not élitist

If you bring considerably more to the table than someone with no third level qualifications you would expect to see your abilities used wouldn't you?

And if that was the case you'd expect more than the basic dole payment.

But in fact you will NEED this just to provide the service.

----------------------------------

Since you would be operating at a certain level, you would be expected to maintain your appearance and you might have to use a car to attend some meetings.

Your expenses immediately rise above the level sustainable by dole payments.

And if you are offering professional skillsets, you will need to keep current which requires attending seminars and continuous study - not cheap, even to travel to them.

Finally if you are acting in that professional capacity you may be required to pay professional indemnity insurance - another expense.

----------------------------------

If the state to pick up the tab for all of this at cost - not run through your firm - it would place your "take home" well above the dole payments.

If the state decides there was no use for you, well, you'd either have to leave or commit suicide. The rise in suicides in the State is being kept out of the news.

I suppose when you are told you are being élitist for expecting reasonable reward for your skills, suicide seems the least painful option.

Allow me to bring a bit of balance and reality to the situation.

ONQ.


----------



## onq

csirl said:


> This is completely untrue.


The consequences of a strategy may not seem palatable, but going into denial doesn't help.


> Just because you cut spending in one area, it doesnt mean you dont spend the money saved.


Straw man argument - I never said it did.


> If the Goverrnment cuts spending on social welfare or unnecessary HSE staff, then it has more money available to spend on more useful things which may be a lot more beneficial to the economy.


Straw man argument - I never said it wouldn't.


> Alternatively, the Government could pass the savings on by reducing taxes thus leaving more money in the pockets of the citizens and businesses - which would boost the economy.


Straw man argument - I never said it couldn't.


Perhaps if you read my post again and address the points I made, or even just the central issue, which is that *by cutting expenditure you are taking money out of the economy and causing deflation*, we might move the debate on a little.

I already suggested that using monies for innovation would be a good thing.

ONQ.


----------



## csirl

> *by cutting expenditure you are taking money out of the economy and causing deflation*


 
No, this is not true. Cutting expenditure means you dont have to raise as much tax money, thus you are leaving more money in the economy. Cutting expenditure will only take money out of the economy if the Government is planning to stash the money saved - which is not proposed or suggested. 

This thread is about social welfate. Cutting social welfare does not mean total expenditure has to be cut and so does not mean that money is taken out of the economy. It could simply mean that the money saved is spent in a more productive way or left in workers pockets.


----------



## Sunny

csirl said:


> This thread is about social welfate. Cutting social welfare does not mean total expenditure has to be cut and so does not mean that money is taken out of the economy. It could simply mean that the money saved is spent in a more productive way or left in workers pockets.


 
Actually it does because any savings go to reducing the deficit and paying back debt. It doesn't to other areas of the economy and it doesn't go back to taxpayers in the form of lower taxes. It is a deflationary action. That doesn't mean it is a bad thing but it will have economic consequences on domestic demand just like if you decided to cut everyone's wages by 10%.


----------



## Purple

onq said:


> Let's set a baseline here.
> 
> If you forego ten years or more of gainful employment by remaining in education and training to become a competent professional you will expect to sell your skills at a premium, both to recoup your losses and as recompense for the higher duty of care you bear.
> 
> Is sort of like manufacturers margins.
> Without profits you cannot pay for innovation and research and development, your brand loses place in the market and eventually fails.
> 
> Its like profit as a reward for enterprise.
> 
> Neither are guaranteed, but its certainly not élitist to expect them
> 
> Said premium for professional services is reasonable.
> 
> If the market no longer supports that price, you will be reduced to selling your skills at a level at which your business breaks even.
> 
> If you cannot sell your skills at that level you will go out of business.
> 
> ----------------------------------


“If you cannot sell your skills at that level you will go out of business.” Yes, that’s exactly what I’m saying.





onq said:


> Now let's look at the condition you set.
> 
> "A persons skills are worth only what someone is willing to pay for them."
> 
> The lowest price person's skills are worth what that person is willing to perform them at. The lowest sustainable price is the break even point of the person's business. Recently we have seen many firms eating into their cash reserves to engage in below cost selling of skills and services. This is unsustainable and will result in those businesses failing.
> 
> ----------------------------------


No, “the lowest price person's skills are worth what that person is willing to perform them at” is not correct. That’s the lowest price at which a seller will enter the market. The value is set by the buyer. If there is a shortage of supply then prices will increase ‘till it is viable for a seller to operate in the market.  



onq said:


> "If nobody wants to pay for them then they are worth zip."
> 
> My experience is that people still want to pay for them, therefore they are not "worth zip".
> 
> It is my experience that people who are not professionally qualified or competent to act as a professional begrudge the premium professionals charge, because they assume they are operating at a level, when they are not.
> 
> ----------------------------------


 If people are willing to pay for them then they are have a value’ i.e. if there is a demand then there is a value. No demand, no value.



onq said:


> Let me put the boot on the other foot.
> 
> Should a professional work as a sweeper for their dole money Purple, or should their skills be put to good use by the state?
> 
> It is a very short sighted administration that would not avail of the latter.
> 
> If the professional is then operating at a level which demanded you used your skills and experience, do you think it appropriate that he/she should do so for the minimum wage?
> 
> The fact is they cannot supply their services at the minimum wage
> 
> ----------------------------------


 If the state can gain a value by engaging a professional in the area in which they are qualified then they should pay them the market rate for those services. If they have no need for those services then they should not employ them. The market sets the rate, not the cost base of the supplier. The suppliers cost base sets the price point at which suppliers will enter the market. This in turn effects supply which in turn effects price but it’s not a direct link. 



onq said:


> A fair days pay for a fair days work is not élitist
> 
> If you bring considerably more to the table than someone with no third level qualifications you would expect to see your abilities used wouldn't you?
> 
> And if that was the case you'd expect more than the basic dole payment.
> 
> But in fact you will NEED this just to provide the service.
> 
> ----------------------------------


  Again, if there is a demand for the services then the seller can charge what the market will stand. If there’s nobody willing to purchase their services then their services have no market value,



onq said:


> Since you would be operating at a certain level, you would be expected to maintain your appearance and you might have to use a car to attend some meetings.
> 
> Your expenses immediately rise above the level sustainable by dole payments.
> 
> And if you are offering professional skillsets, you will need to keep current which requires attending seminars and continuous study - not cheap, even to travel to them.
> 
> Finally if you are acting in that professional capacity you may be required to pay professional indemnity insurance - another expense.
> 
> ----------------------------------


  I agree. This influences the price point at which sellers will enter the market.



onq said:


> If the state to pick up the tab for all of this at cost - not run through your firm - it would place your "take home" well above the dole payments.
> 
> If the state decides there was no use for you, well, you'd either have to leave or commit suicide. The rise in suicides in the State is being kept out of the news.
> 
> I suppose when you are told you are being élitist for expecting reasonable reward for your skills, suicide seems the least painful option.
> 
> Allow me to bring a bit of balance and reality to the situation.
> 
> ONQ.


 The reward you can expect for your skills is set by the market. 
A friend of mine spent 4 years in college studying fabrics and embroidery. She graduated the same month the first CNC embroidery machines came on the market. This reduced the market value of her skills to virtually zero. The guys who were highly skilled coopers working for Guinness found that the value of their skills reduced to almost nothing when metal barrels and casks were introduced.


----------



## csirl

Sunny said:


> Actually it does because any savings go to reducing the deficit and paying back debt. It doesn't to other areas of the economy and it doesn't go back to taxpayers in the form of lower taxes. It is a deflationary action. That doesn't mean it is a bad thing but it will have economic consequences on domestic demand just like if you decided to cut everyone's wages by 10%.


 
Who said anything about paying back the debt at a more accelerated rate? 

What you are saying is that paying back our debt at a more accelerated rate is deflationary NOT that cutting public expenditure is delfationary.


----------



## Sunny

csirl said:


> Who said anything about paying back the debt at a more accelerated rate?
> 
> What you are saying is that paying back our debt at a more accelerated rate is deflationary NOT that cutting public expenditure is delfationary.


 
Has nothing to do with a paying back at a faster pace. Cutting public expenditure is deflationary unless the money is given back through tax cuts or spent in other parts of the economy. That's not what will happen. It will simply reduce the amount we need to borrow.


----------



## csirl

Sunny said:


> Has nothing to do with a paying back at a faster pace. Cutting public expenditure is deflationary unless the money is given back through tax cuts or spent in other parts of the economy. That's not what will happen. It will simply reduce the amount we need to borrow.


 
Borrowing is also deflationary as it costs money - you have to pay interest annually and in most cases refund the capital within a specific timeframe. If you borrow you have to cut public expenditure as some of your tax take will be used up in interest repayments. So borrowing cannot be held up as an alternative to cutting public expenditure.


----------



## Firefly

Yes, borrowing as we all know only kicks the can down the road. Repaying this debt will at best dampen any future recovery as the principle and interest will have to be repaid. This will be repaid with taxation which is extracted from the economy (deflationary). It's a case of paying for it now or in the future.


----------



## Sunny

csirl said:


> Borrowing is also deflationary as it costs money - you have to pay interest annually and in most cases refund the capital within a specific timeframe. If you borrow you have to cut public expenditure as some of your tax take will be used up in interest repayments. So borrowing cannot be held up as an alternative to cutting public expenditure.


 
I am not holding it up as an alternative. I am simply saying that cutting a budget deficit through spending cuts is by it's nature, deflationary. Otherwise the Government would just decide to run a balanced budget next year but they know the economy couldn't survive that. 

The deficit has to be cut. There is no escaping that. Simply saying that there are economic consequences to doing this. So when people say that cutting social welfare won't lead to money being taken out of the economy, they are wrong.


----------



## Gekko

Sunny said:


> cutting social welfare won't lead to money being taken out of the economy


 
Who cares?

The gap between our annual income and annual expenditure is €20 billion.  This needs to be reduced to zero.  Whether it's deflationary or not doesn't matter an iota.

Our expenditure is approximately €50 billion per annum.  €20 billion goes on social welfare, €20 billion goes on salaries and €10 billion goes on the rest.

Make 50,000 public servants redundant for starters and pay them statutory redundancy.  Assume their average annual service to be 10 years (which would be high) and the average cost of the employees to be €50,000 per annum.  For a once off cost of approximately €630 million (i.e. €600 x 2 x 10 x 50,000) we'd make a recurring annual saving of approximately €2.5 billion (i.e. €50,000 x 50,000).  The tax loss and dole cost for those who didn't find alternative employment would obviously have to be factored in.

Next cut all public sector salaries by 20%.  That should yield an annual saving of €3.5 billion (i.e. €17.5 billion x 20%) and the tax loss would obviously have to be factored in.

Next cut all social welfare payments by 20%.  There's an immediate saving of €4 billion per annum.

Bang...half of the deficit wiped out with a few strokes of a pen.

Next hit every property commercial or otherwise for €1,000 property tax.  That raises €4 billion per annum.  Only €6 billion to go!

Next raise inheritance tax rates from 25% to 50% and drop the parent to child thresholds to €200,000.  This should raise approximately €1 billion per annum and can't be put off (unlike capital gains tax).

€5 billion to go...any ideas?


----------



## Sunny

Gekko said:


> Who cares?
> 
> The gap between our annual income and annual expenditure is €20 billion. This needs to be reduced to zero. Whether it's deflationary or not doesn't matter an iota.
> 
> Our expenditure is approximately €50 billion per annum. €20 billion goes on social welfare, €20 billion goes on salaries and €10 billion goes on the rest.
> 
> Make 50,000 public servants redundant for starters and pay them statutory redundancy. Assume their average annual service to be 10 years (which would be high) and the average cost of the employees to be €50,000 per annum. For a once off cost of approximately €630 million (i.e. €600 x 2 x 10 x 50,000) we'd make a recurring annual saving of approximately €2.5 billion (i.e. €50,000 x 50,000). The tax loss and dole cost for those who didn't find alternative employment would obviously have to be factored in.
> 
> Next cut all public sector salaries by 20%. That should yield an annual saving of €3.5 billion (i.e. €17.5 billion x 20%) and the tax loss would obviously have to be factored in.
> 
> Next cut all social welfare payments by 20%. There's an immediate saving of €4 billion per annum.
> 
> Bang...half of the deficit wiped out with a few strokes of a pen.
> 
> Next hit every property commercial or otherwise for €1,000 property tax. That raises €4 billion per annum. Only €6 billion to go!
> 
> Next raise inheritance tax rates from 25% to 50% and drop the parent to child thresholds to €200,000. This should raise approximately €1 billion per annum and can't be put off (unlike capital gains tax).
> 
> €5 billion to go...any ideas?


 
Wow. Problems solved. Amazing how these simple steps escaped the attention of the Department of Finance and all those other economists. As you say it is only the stroke of a pen. You should write to the IMF/EU and the ECB with your guide to instant economic recovery. They will feel really stupid for not suggesting it first. 

Out of interest, what do see happening GDP after these simple steps? Presume you have looked at it.


----------



## Gekko

Sunny said:


> Wow. Problems solved. Amazing how these simple steps escaped the attention of the Department of Finance and all those other economists. As you say it is only the stroke of a pen. You should write to the IMF/EU and the ECB with your guide to instant economic recovery. They will feel really stupid for not suggesting it first.
> 
> Out of interest, what do see happening GDP after these simple steps? Presume you have looked at it.


 
Do you propose running a €20 billion deficit forever? 80% of our expenditure goes on social welfare and public sector salaries.

What's being done about the €20 billion annual deficit now? We're bringing in a property tax which will yield €75 million per annum. Fantastic.  Things should be fine in 2125.

The current deficit MUST be eliminated.


----------



## Purple

Gekko said:


> The current deficit MUST be eliminated.


Increased tax receipts due to a growing economy will also do the trick.

It's a balancing act between the two.


----------



## Gekko

Purple said:


> Increased tax receipts due to a growing economy will also do the trick.
> 
> It's a balancing act between the two.


 
Yep...absolutely.

My issue is with the navel gazing over a property tax that will raise €75 million per annum when we've an annual hole of 267 times that.


----------



## Purple

Gekko said:


> Yep...absolutely.
> 
> My issue is with the navel gazing over a property tax that will raise €75 million per annum when we've an annual hole of 267 times that.



I agree. There's still no sign of any structural reform of how the country is run.


----------



## Chris

csirl said:


> No, this is not true. Cutting expenditure means you dont have to raise as much tax money, thus you are leaving more money in the economy. Cutting expenditure will only take money out of the economy if the Government is planning to stash the money saved - which is not proposed or suggested.
> 
> This thread is about social welfate. Cutting social welfare does not mean total expenditure has to be cut and so does not mean that money is taken out of the economy. It could simply mean that the money saved is spent in a more productive way or left in workers pockets.


I think it is becoming futile to point this out to ONQ. This has been highlighted at least 4 times now, but somehow he refuses to acknowledge it. I don't have any other explanation.
A quote by Garet Garrett comes to mind in that we have entered "an area of controversy in which opinion rejects evidence and evidence disembowels opinion."



Sunny said:


> Has nothing to do with a paying back at a faster pace. Cutting public expenditure is deflationary unless the money is given back through tax cuts or spent in other parts of the economy. That's not what will happen. It will simply reduce the amount we need to borrow.


But the deflationary effect is offset by the lack of deflationary effect of having to tax to repay increased debt. Basically it reduces the interest bill, which reduces the amount government has to ultimately take out of the economy. This means that it more than balances out, as less money has to be taken out of the economy in the future.

Beyond that I also think it is fallacious to argue that deflation is a bad thing in the first place (not saying that this is your argument). Deflation means lower prices, which is a good thing to the consumer and producer, and most importantly boosts competitiveness. For 150 years of the industrial revolution the US had price deflation and monetary stability (bar a couple of wars), and this boosted their economy into what it was.



Gekko said:


> The gap between our annual income and annual expenditure is €20 billion.  This needs to be reduced to zero.  Whether it's deflationary or not doesn't matter an iota.


I think this should technically put an end to the argument over spending cuts, but it doesn't seem to resonate with politicians at all who believe we can grow out of this mess. Too many people still believe that Ireland has an income problem and not a spending problem. Bringing the budget in line with what is actually taken in would bring us back to 2004 level of spending. That is not as terrible a prospect as some politicians and commentators would have us believe.


----------



## Sunny

Chris said:


> But the deflationary effect is offset by the lack of deflationary effect of having to tax to repay increased debt. Basically it reduces the interest bill, which reduces the amount government has to ultimately take out of the economy. This means that it more than balances out, as less money has to be taken out of the economy in the future.
> 
> .


 
Have you done the maths on this? Take €20 billion out of the economy today so we don't have to borrow any money to run the Country and see what happens. For the deficit to be wiped out, GDP would have to remain the same. Does anyone really believe that the economy wouldn't shrink with €20 billion taken out in go? The economy will shrink, therefore we have a deficit again. Suddenly you are in a spiral.

The deficit has to be cut but it has to be cut realistically in a way that doesn't send the economy over a cliff. There is room to be more aggressive than what we are the moment but we can't cut multiples of what we are cutting while still expecting the economy to grow or remain stable.


----------



## Chris

Sunny said:


> Have you done the maths on this? Take €20 billion out of the economy today so we don't have to borrow any money to run the Country and see what happens. For the deficit to be wiped out, GDP would have to remain the same. Does anyone really believe that the economy wouldn't shrink with €20 billion taken out in go? The economy will shrink, therefore we have a deficit again. Suddenly you are in a spiral.
> 
> The deficit has to be cut but it has to be cut realistically in a way that doesn't send the economy over a cliff. There is room to be more aggressive than what we are the moment but we can't cut multiples of what we are cutting while still expecting the economy to grow or remain stable.



The government part of GDP will shrink, but the non-government part of GDP will grow. Spending cuts do not result in a downward spiral. Spending cuts result in more money staying in the private productive economy, making the private economy more profitable and economically attractive. The exact opposite would happen, in that the economy would start booming. The US has had such experiences numerous times, after the war of independence, civil war, 1921 depression, after WWII. On each occasion government spending was drastically cut (while pundits warned that that would be a disaster) and the economy started booming. By your line of argument this should have been impossible and the opposite should have happened.


----------



## shnaek

Another good piece on our welfare system here in Ireland:

http://www.independent.ie/opinion/c...stem-requires-a-dramatic-rethink-2850974.html

"The dramatic German reforms saw the numbers entitled to unemployment benefit cut by half and their link to earnings abolished. The Dutch will not pay any benefit to anyone under 27.

The Danes don't care whether you're a single parent or not."

Is it any wonder that they aren't happy about having to bail the likes of us out?

"the lowest social welfare payments in Ireland were the highest of their kind in the EU and twice those in the UK and Germany. And that is only the cash payments, before things like housing support."

And yet, those of us who are still working are going to be hit with more tax rises, making it even less worth while to work. Simply bizarre.


----------



## Purple

Excellent piece in the Indo but it will be dismissed by the reality deniers here with an ideological bias that insists that black is white and everything in the Indo is rubbish.


----------



## Firefly

Purple said:


> Excellent piece in the Indo but it will be dismissed by the reality deniers here with an ideological bias that insists that black is white and *everything in the Indo is rubbish*.



That's not entirely true. If those same people post an article from the Indo themselves, then it's fine.


----------



## onq

You can always find something to cherry pick from the Social Welfare Stats.

Netherlands Unemployment Benefit

From - 

http://www.expatica.com/nl/essentia...ch-social-security-system-explained-1704.html

*"Unemployment benefit (WW)

*Your  employment history will determine the amount and duration of payments.  It comprises the first two months at 75 percent and thereafter 70  percent, of your last earned salary (*there's a maximum daily rate of EUR  188.88*). You must have worked in 26 out of the previous 36 weeks before  the first day of unemployment. It can be restricted if other benefits  are in operation.  You apply for benefit at the UWV Werkbedrijf ([broken link removed]). Consult the Institute for Employee Benefit Schemes website (www.uwv.nl) for more information."

Ireland is €355.60 per *week*.


Netherlands Minimum Wage (2011)

From - 

http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country

€1,398.60 per month, €322.75 per week and per day for persons 23 and older; between 30-85% of this amount for persons aged 15–22[44]

Ireland, by comparison is €8.65 per hour

37.5 hours = €324.34


Look for corruption and fraud if you want to make savings.


----------



## Don_08

And in the Netherlands you get only get paid unemployment benefit one month for every year you have worked to a maximum of three years and two months, so ten years working gives you ten months benefit. You have to compare like with like.


----------



## onq

Okay let's do the math.

I've been 20 years working, both employed on contract and self-employed.

This would offer three years and two months on the dole on over €500 a week.

In Ireland I would only be entitled to €360-odd maximum - huge difference when you're watching pennies.

I'm making two points here where I believe the thread title may be seen as unfairly casting aspersions -

- for people who want to work the dole in Ireland isn't that great

- don't assume everyone on the dole is work-shy or a welfare abuser.


----------



## Don_08

You would be entitled to 20 months of 500 a week compared to a payment to age 64 of 350 odd. It's a much better system to encourage people back to work. Of course for those on minimum wage it would be less than 250 a week. 

A social welfare system linked to previous earnings for the first few months makes much more sense, then revert to a fiat and much lower payment. You pay your social insurance contributions based on your full salary but then end up with a fiat payment. 

My husband lost his job and income dropped from over 1,000 a week net to 188 a week. That's a big adjustment to make. Luckily we are ok on my salary.  It's only been 6 weeks so far and hopefully he will get a new job soon, but it will probably be abroad and in that case I will move too so thats another 40k per annum from tax intake the government will lose.


----------



## goingforgold

It's very simple. People like Don 08's husband and ONQ should be taken care of so that they can live reasonably well while they seek employment. However those who never paid tax or very litle tax and consistently remain unemployed should be struck off after a period of time. 

In 2006 we had 150000 people on the live register! Now some of those would have been partime workers and so on but we all know who the vast majority are. They exist in every town and village up and down the country. They need a serious kick upthe backside and need to be shocked into work!


----------



## onq

(nods)

Three are huge adjustments to make, Don08, and unlike the habitual receiver of dole, there is no vast reservoir of knowledge in the professional community about how to go about applying for state assistance.
Brendan has done his bit to redress that on AAM and hats off to him, but there are many in the professions whose family background and earning history would not have prepared them for this pass.

MABS has provided good advice to many people in the past three years and the Community Welfare Officer is a fund of useful information. I pass that one for what its worth.
Also there are website like Bluebrick.ie and Springboard for further education, recognition of prior learning and acquiring transferrable skills although check the entry requirements


----------



## onq

goingforgold said:


> It's very simple. People like Don 08's husband and ONQ should be taken care of so that they can live reasonably well while they seek employment. However those who never paid tax or very litle tax and consistently remain unemployed should be struck off after a period of time.
> 
> In 2006 we had 150000 people on the live register! Now some of those would have been partime workers and so on but we all know who the vast majority are. They exist in every town and village up and down the country. They need a serious kick upthe backside and need to be shocked into work!



Thank you for your kind words, but I like many other recovering workaholic professionals don't want welfare, we want jobs and we want to be paid a fair amount for the work we do. 

Unfortunately we have to face the reality of the moment, that potential clients have little money and we have to get through this somehow.


----------



## Purple

onq said:


> Thank you for your kind words, but I like many other recovering workaholic professionals don't want welfare, we want jobs and we want to be paid a fair amount for the work we do.
> 
> Unfortunately we have to face the reality of the moment, that potential clients have little money and we have to get through this somehow.



I have huge sympathy for people in your position. It is very important to be clear in how we target welfare reform. It does seem clear that the system we have doesn't work and there are better and fairer systems already in place in other European countries.


----------



## goingforgold

onq said:


> Thank you for your kind words, but I like many other recovering workaholic professionals don't want welfare, we want jobs and we want to be paid a fair amount for the work we do.
> 
> Unfortunately we have to face the reality of the moment, that potential clients have little money and we have to get through this somehow.


 
Couldn't agree more. But you also need to survive while seeking employment and I believe you should be assisted as generously as possible by the state in this interim period and those who refuse to work should be struck off the dole. And yes we need to do more to get people back to work but that's a whole other issue.


----------



## onq

I think that people need to be encouraged to earn to pay back debts and to upskill.

Leave the dole as a leg up - convert to a back to work scheme - but allow additional work to be done and tax the total, thus supporting people who need support, but who want to work and upskill.

Seems obvious to me, but the social welfare don't seem to want to understand how to get people moving out of the unemployment ghetto.


----------

