There is a widespread consensus among opposition politicians, unions and business lobby groups such as ISME that the government needs to launch a “jobs plan” to reduce unemployment. One such proposal is Fine Gael’s plan to give those firms hiring unemployed workers either a €6000 subsidy over two years or a waiver on employer PRSI. (Labour have a more restrictive version which only applies to recruiting people unemployed more than six months.) Another proposal is ISME’s call for “an employment subvention fund to protect existing jobs.”
At a time of rapidly rising unemployment, I’m sure these seem like tremendous proposals to the public and the government is being widely criticised for its failure to adopt “innovative” proposals like these. To my mind, however, it would be a mistake to adopt proposals of this type. Let me explain why.