2 Replies to “Reducing Dole Queues”

  1. Thanks for the RT! IrishDebate.com butchered my links (my bad) so here's the hopefully coherent version:

    1. You mentioned cutting the minimum wage was justified under the rubric of restoring competitiveness (internal devaluation). In my opinion a blanket cut in the minimum wage has increased income-replacement rates for passive unemployment among low earners. A targeted strategy would have been preferable:
    a) Limiting the scope of a reduction to the least experienced whose marginal product may not be €8.75. Employers have been cribbing about this for aeons.
    b) Abolishing JLC wage premia. During a decade of net inward migration we voluntarily paid wage premia to fill vacancies in our service sector. Little wonder our coffees, hair-cuts and Sunday lunches are so expensive when employers are bound by restrictive wage agreements sitting on top of the statutory minimum!

    2. Your discussion of job matching was interesting. Chris Pissarides Nobel lecture at LSE was on matching and is podcast here. The motivation behind job matching has some interesting parallels with industrial policy and attracting inward investment. My colleague Dr Ya Ping Yin has some interesting things to say about the Chinese industrial policy. Local authorities essentially map skills and resources (capabilities) in their regions and will lead delegations on trade missions to sell those resources. The objective is to maximise the attractiveness of a region’s offering by identifying any deficits (human capital, infrastructural) and addressing them. I’m trying to encourage him to write this up in English.

    3. On graduate emigration, I’ve been trying to find any studies (or data) on the percentage of England’s graduates who “default” on their student loan through emigration. Anecdotally Australia does pretty well out of England’s higher education system. Even though the return of university fees through deferred payment has its merits, I wonder how the incidence of default will be affected by our outwardly mobile labour force? It would be strange indeed if the burden of repayment fell entirely on graduates who remain in Ireland.

    4. Business wants to see a reduction in local authority rates and they maintain the absence of domestic rates makes local authority funding inequitable. A reduction in rates under the current non-system will leave a revenue gap to be filled either by service charges, development levies, a local property tax, or... through reform of what local authorities do and how they do it. FG’s manifesto proposal to reduce the number of (grossly overpaid) city/county managers stops within an inch of the real finish line which ought to be consolidation. The UK grabbed this nettle 30 years ago.

    5. In terms of infrastructural works – specifically refitting mains and installing water meters. At the moment water infrastructure is provided/maintained by local authorities. Allocations from DoEHLG are used by councils either for direct labour or to put large projects out to open tender. Let’s be blunt about this: European solidarity has taken a hammering of late, not least with discussion of a common consolidated corporation tax. Perhaps before we rush to tender multi-million euro contracts for water works we should ask ourselves, “what would the French do?” What are the prospects of German or UK civil engineering firms getting equivalent contracts in France? Our situation is thus 1) direct labour is likely to be inefficient, fragmented and bad value for money, 2) open tendering (at least some of it) may suffer from leakage and not provide the employment we desperately need. Can the PPP model be adapted in such a way that would include conditionality on the use of local labour, e.g. from a skills pool registered with the public employment service? Would that proposal sound as un-European if the French did it first?

    6. One of the contributors asked why discount grocery retailers are more expansive here than in Germany. Various local authorities (including An Bord Pleanála) have interpreted the Retail Planning Guidelines as imposing a cap of 1,500m2 on the floor area of vertically integrated “discount grocery retailers”. The Competition Authority have written about this and DoEHLG are supposed to be reviewing it. Ironically enough, impeding the growth of vertically integrated retailers has played into the hands of Irish wholesalers (known to be uncompetitive) and multiples like Tesco whose Irish margin is 3 percentage points more that of its UK operation.

    7. Lastly, someone raised an interesting point on the politically-correct reluctance to refer to labour flexibility. There is certainly some debate to be had on the balance between “finding” employment for people in industries that were unsustainably large (construction and trades) and society’s willingness to support peoples’ time outside of the labour market while they retrain. Denmark’s flexicurity model does the latter: a social contract exists that acknowledges the inevitability of structural unemployment. It provides for generous income replacement (to the actively unemployed) subject to counselled/monitored progression through retraining. In my opinion the economy’s investment in supporting that expensive contract is repaid many times over through the future earnings and success of those retrained. FG’s manifesto proposal to substitute “FÁS courses” with training vouchers probably makes sense but needs to be accompanied with a rigorous employment counselling service – of which diarying is only a part.

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