Money for Nothing

There is something about the new proposed nine-day working fortnight that fills me with disquiet. The idea of the government using taxpayers dollars to make people less productive just seems all wrong to me. On the other hand, you could quite rightly say that a lot of government spending meets this criteria, particularly that spending that produces screeds of complex directives designed to make earning a living substantially more difficult. 

I understand the logic behind it. The government is paying a small amount of money in order to preserve a significant number of jobs, which should work out considerably cheaper than creating make-work jobs de novo. The trouble is it is also dangerously easy for this scheme to lead to serious abuse.

Already, Andrew Little, in his hat of the national secretary of the EPMU, has called the government’s offer is “underwhelming” and is calling upon employers to “ step in to top-up lost wages”. Apparently it has not occurred to Mr. Little that this will mean that employers would then be paying people wages for not working for them. How this will help employers stave off redundancies is beyond me.

But the abuse potential is much greater than the murmurings of the economically illiterate Mr. Little. It will be difficult to discern which employers are truly in need of this intervention and which employers merely see it as a way of temporarily reducing their wage bill to increase profit. In addition, as the editorial in the Herald points out, “Will it prop up weak companies that need to restructure to survive?” This would be the opposite of that which John Key is striving to achieve - a robust economy.

But the worse potential abuse of all, is that it may become impossible to stop in the future. Key has wisely started with a very conservative scheme, but it is easy to foresee that this is likely to snowball into smaller companies, more employees, higher “wages” and more subsidized hours. It is going to be a nightmare deciding when this subsidy will end. When the recession ends? When no further jobs will be lost? (not the same thing). When GDP growth reaches 3%? 5%? When unemployment reaches zero?

And, of course, there is always the question that, if Labour are returned to government, will they want to end the scheme at all?

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