Tuesday, Mar 24, 2009
Partial solution: Government can subsidise wages indefinitely
The Times: Pay cuts and freezes spread as inflation plunges to 50-year low
The industrialist Sir Anthony Bamford called yesterday for wage subsidies for manufacturers to support employment during the recession.
Sir Anthony, chairman of the construction equipment manufacturer JCB, said that the Government should subsidise the wages of workers who have been put on reduced hours because of falling demand.
Posted by devo @ 07:15 AM (747 views) Add Comment
8 Comments
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1. mark wadsworth said...
They are truly mentally ill.
Before we even think about subsidising wages, how about cutting the second worst tax, i.e. Employer's National Insurance? Or are they maybe going to increase this tax on jobs in order to raise money to pay the subsidies? Or what?
2. Iblewitlasttime said...
Er, why? Of all the labour markets, construction is the most flexible, the most hire and fire, because it is so quick to bring in new workers as required.
“Wage support is a better way of doing things because it is less brutal and less black and white”: er, what vast experience does mr JCB possess in this new field of wage policy distortion?
Anyway, surely EA's would be top of the list for wage subsidy, and anyone else whose job is redundant.
3. jackas said...
They are sick. Myopic and backward. Incoherent and lacking any rigour whatsoever. This is utopian popularist nonsense that will leave us all economically impotent.
What ever happened to the backbone? The ability to take our medicine? To do the right thing rather than the thing the masses will think is right?
4. last_days_of_disco said...
@jackas
You are right, we need to stop shrugging and saying, "Britain has non of the old spirit left". That is not true. The Grand parents and the young people have a great deal of patriotism and willingness to do the right thing. Its the generation that put labour into power and kept them there for ten years who are morally defunct. Our parents who ran away to join the circus and do "peace and love and drugs". We need to show them how its done.
5. techieman said...
Tell you what - lay them all off and let the taxpayer pay them 100% of their wages for ever, - index linked of course but only on the larger of the CPI / RPI and ony if its positive. Oh hang on if hat happens would eventually there be any taxpayers left?
Short term help for people (probably at better rates than now) makes sense to me - but there has to be an incentive to be productive. I posted here about a city lawfirm that is voting on reducing working time to a 4 day week for 85% of pay (its more complicated than that bu you get the gist). That makes sense to them so it makes sense to me. to argue that ANY group should have a guaranteed 100% wage for being less productive is crazy - if the employer wants to do that fine - but if they want some taxpayer assistance to do it - sorry forget it!
Mark W is right adjust down council tax/ business rate / NI contributions (both sides but i agree particularly employers side - or reintroduce the maximum income restriction for Employers)
6. Deciphermonkey said...
OMG, that's such a stupid idea. Gordon Brown must be kicking himself that he missed an opportunity. He will have to sanction the idea now just to trump Sir Anthony Bam-ford. Idiots.
7. mark wadsworth said...
@ Techie, Business Rates are the closest thing we have to Land Value Tax (it is a tax on property ownership, not on productive activity*), it should be tweaked to remove the "tax on buildings" element that's all, and even Council Tax (being a property tax) is not the worst tax we have (although I don't like the way it is regressive to property values, having a large poll tax element).
The Worst Taxes are clearly VAT (which applies at random to some forms of productive activity but not others) and Employer's NIC (ditto), between them these taxes raise three times as much as corporation tax, and nearly as much as income tax/Employee's NIC.
* As a simple fact of observation and logic, if business rates are cut, all that happens is that landlords put up the rent so that the total cost to the tenant remains roughly the same. If a business owns its own premises, it benefits from the cut but not because it is working harder or cleverer, it benefits merely because it owns the premises.
8. shipbuilder said...
I think we're getting a bit overexcited here - the call to subsidise wages is a small part of the article - there's no mass moral failing or ideology behind it, just the short-termist greed and begging/bribery we should now be used to seeing, typically from those who shout loudest about their freedom to make money during the good times.