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

[Complainer]

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]

. 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]

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]

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]

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]

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.

The cost of this system is enourmous

Source?

and the Swiss pay for it in other ways.

What other ways?

 

[Complainer]

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?

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?

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]

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]

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]

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]

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]

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]

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]

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.

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.

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.

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?

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]

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!!