Carey is correct to point out that a “jobs subsidy scheme” of the nature she outlined would be disastrous. It would be a waste of vital taxpayers’ funds, it would do nothing to ease the jobs crisis and, of course, it would be wide open to corruption and abuse.
Second, the plan wasn’t his idea:
Unfortunately, where she went wrong was in attributing such an initiative to congress. The truth is that precisely this approach has been repeatedly proposed by employer and business groups. We have opposed such feckless initiatives from the outset.
Really? Perhaps I’ve got this wrong but my sense was that ICTU’s objection to the plan was that it wasn’t big enough in scale. The plan certainly emerged from social partnership negotiations rather than independently from the government, so the unions were certainly in the room when the plan was hatched. And here’s how the Irish Times reported their reaction last week:
THE IRISH Congress of Trade Unions (Ictu) has said it is disappointed with aspects of the Government’s new proposals for economic recovery, including the scale of its new subsidy scheme to support jobs that are at risk.
ICTU’s own webpage states their objections as follows:
Executive Council members had expressed unhappiness at the level of initial resources being made available – €250m with agreement on funds of €1 bn being available should the meaures prove effective and worthwhile – and at the exclusion of large sectors of the economy from, particularly construction and services.
These reports certainly seem to point to the scale of the program, rather than its nature, as being ICTU’s objection.
Still, rather than quibble with what appear to be inconsistencies in the trade union stance on this (no need to impose the tyranny of consistency) let’s focus on the positive side which is that there now seems to widespread agreement on the economics of the €250 million job subsidy proposal—it’s a bad plan.
Having apparently passed on job subsidies, Begg’s article points to a set of other proposals in ICTU’s Job Creation and Protection Plan, so these proposals are worth looking at. While the plan mentions a figure of €1 billion as its price tag, it doesn’t contain any itemization of costs so it’s hard to know which of the measures are considered more important than others. Many of the measures mentioned in the plan (such “Guarding Against Excessive Flexibility Requirements”) don’t seem to relate to reducing unemployment. Two that do, and that are mentioned in Begg’s article today, are job rotation and a social employment programme to meet gaps in social infrastructuree.
The job rotation proposal envisages workers going off to get training (perhaps a couple of days a week) while an unemployed person fills in for them. I haven’t seen research on this type of scheme but it seems likely that it could only work successfully in a very limited range of sectors. If you employ someone to dig holes, then you probably don’t care too much about having an unemployed person come in an take their place a couple of days a week. But most jobs are not like that. Instead they require specific skills built up over years and ongoing relationships and exchanges of information with other colleagues. It’s hard to see many employers want to sign up for this unless the State overpays for the placements.
The social employment programme sounds an awful lot like the FAS Community Employment Scheme. Unfortunately, empirical studies have generally shown that these are the least effective schemes in terms of boosting the long-term employment prospects of participants. (See for instance, Phillip O’Connell, “Are They Working? Market Orientation and the Effectiveness of Labour-Market Programmes in Ireland”, European Sociological Review, 2002.)
I know I’m going to get the usual criticisms here that I’m being negative but it’s important that this debate is had. The ICTU measures are well-intentioned but they need to be subjected to critical analysis.