This policy will only work in the land where the Magic Job Tree grows alongside the Magic Money Tree that ensures all such jobs are well paid. And that only exists in the head of some policy wonks in Tory think tanks.
Richard Murphy is the founder of the Tax Justice Network
As the Guardian notes this morning:
A new frontier of the battle over the welfare state is being opened up as employment ministers look for ways to target the working poor by asking 1 million in-work recipients of tax credits to do more to boost their earnings.
Under the proposals, jobcentre staff will have powers to withdraw universal credit if claimants are deemed to be doing too little to increase their earnings.
Ministers are considering more frequent interviews at jobcentres, and even requiring people to move to different jobs to reduce the size of the benefit bill.
Let’s just consider what this means for a moment.
First, in an economy where there are 2.5 million unemployed and many, many more under-employed because of a lack of demand in the economy as a whole this policy is absurd: Job Centres can’t find work for those unemployed right now, let alone those in work who aren’t, according to the government, earning enough.
Second, let’s remember that this proposal is running in parallel with a suggestion that the minimum wage be frozen or cut.
Third, let’s ignore for a minute the implications of this for choice or liberty that the right wing is meant to particularly treasure.
Fourth, let’s wonder for a minute how those in work are to go about all these extra interviews, with Job Centres and new employers when their existing employer has no reason to give them paid time off to take part in this process. Who picks up the tab for that?
But last let’s just note the sheer economic absurdity of this. There are no jobs because the Tories will not undertake the necessary spending to create them, and the whole of the Tory supply side reform agenda, whether about minimum pay, reducing employment rights and more, is about cutting wages and making it easier to sack those who want an increase in them.
In which case this policy will only work in the land where the Magic Job Tree grows alongside the Magic Money Tree that ensures all such jobs are well paid.
And that only exists in the head of some policy wonks in Tory think tanks.
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6 Responses to “Tories living in the land where the Magic Job Tree grows alongside the Magic Money Tree”
SadButMadLad
Go on then. I’ll bite. I’m not Tim Worstall and I know very little about economics, so I can just assume that Richard Murphy must be an expert compared to me. I mean, I can’t even add up in my head, and he’s an accountant.
Firstly, the magic money tree is a figment of the left’s imagination not the right. The right knows that banks create money by lending it out. There is a central bank that loans out money to all the other banks. And fractional reserve banking means that the same money goes around money times. The left just thinks money is created by the tax payer giving it to the government.
Secondly, unemployment. Yes it has gone up 7K in the last quarter, but employment has also risen, by 131K. So that means there are more people in the labour market, and more people working. So the jobs are there. And don’t forget the unemployment rate is a measure of those who are moving from job to job. The actual long term unemployed are very small in number. So the people who are unemployed tend to be unemployed for short periods and it’s just the difference between losing and gaining a job.
Thirdly, why should employers give their employees time off work to look for a job. Or do you mean all those under-employed part time workers. By the very definition, part time means that the worker is not working full time and has part of the day to arrange to go to interviews.
Fourthly, the minimum wage is counter productive. It sounds good but not in actual practise when you think about it. Who pays the wage? The employer. Why does he pay a certain wage? Because that’s the wage he thinks is appropriate for the skill required to do the job and is also enough to keep the worker from leaving to work for a rival. For some jobs that could be quite low. For other’s it’ll be high. The minimum wage cuts through all that and makes all jobs equal, no matter what the skill, experience, or capability of the worker. And how does the employer pay for the minimum wage? By setting higher prices to his customers. In other words, you and me pay more out of salaries to ensure that others are paid not according to their skill and ability but according to a figure set by some pen pushers.
Fifthly, the minimum wage is a wage. So like other wages it can go up as well as down. Employment might be going up, but wages aren’t. So is it fair that the minimum wage goes up whilst the wages of everyone else go down?
Sixthly, making it easier to sack people means it’s also better for the economy. It means rather than a business having to keep a lazy worker who drags down all those around him and then having to spend a lot of money and effort going through the proper process of getting rid of them, they can just get rid. Don’t forget that unemployment is just the difference between the rate of gaining employment and that of losing employment. So the workers who are sacked go elsewhere to get a new job. Unless they really are lazy. Why should business subsidise those who don’t want to work?
Seventhly, and finally. It’s not the government who creates jobs. It’s business. Government needs to do what it can to help businesses do this. This can be done by lowering taxes so that the business can put the money not paid in tax towards wages for workers. What the government must not do is spend money. Because think about it, where does the money come from for the government to spend it? From the tax payer. The working tax payer whose salary is limited by the fact that their employer has to pay so much in taxes. Basically the left thinks it proper that a few people like politicians can spend money better than everyone else. And we all know what we think about the intelligence of politicians.
Eighthly (I told you I can’t count), Richard Murphy can’t call me a neo-liberal in an attempt to ignore what I say because I don’t even know what it means.