Unemployment

[John83]

You know what else is not going to stimulate the economy? National bankruptcy.

[mypost]

Something else that doesn't stimulate the economy is scaremongering.

We know the position we're in, but it's important not to blow it out of all proportion. We are not bankrupt, nor are we needing the IMF. We may need it in the future, but you don't go from growth to bankrupt over 6 months, it takes several years to get from one end of the scale to the other. That was the case in the boom, and is the case now as well.

Was impressed with Labour's suggestions last night, but with the government focussing on training than stimulating, little can be done about the situation until Labour get FF out.

Which is still 3 years away.

[Fr Damo]

We know the position we're in, but it's important not to blow it out of all proportion. We are not bankrupt, nor are we needing the IMF. We may need it in the future, but you don't go from growth to bankrupt over 6 months, it takes several years to get from one end of the scale to the other. That was the case in the boom, and is the case now as well.

we don't know where we are because we are being drip fed by the Government information that is historical and not reflective of the true picture. (the Government themselves say they only look at Tax take @ month end!!) We also have been in negitive growth now for about 12 months, it's just we needed two conseqitive quarters before they clowns would admit it. Ulster bank reckon we are looking at -8% this year, Alan Ahern says wages and other income need to fall 10% to confirm a depression so we still have a bit to go. I for one am for direct tax hikes (short term) vat reduction to 20% and keep it there and a natural cul of the public sector. We have to get back to competitive manufacturing again, fast, though this will take 3 -5 years provided the rest of the world picks up. I would also use some of the pension reserve where ever necessary, & have courage in our conviction and pay it back to future generations at a rate just less than the current rate it costs to borrow. My point here is we are paying over the odds on the money markets for cash, we should use or own and pay it back as we would a normal creditor (i think they call it IIR in leaving cert pass accountancy!)

[OneRedArmy]

We know the position we're in

I really don't think we do. At least with any certainty.

Unfortunately the key decision makers in this country (in Government and in businesses), are by and large, not at the races intellectually and are really struggling to keep up.

Obviously there are exceptions but having got into the same problem in the same way as many other countries, we're setting ourselves apart in how we are dealing with it. And not in a good way.

I do agree that job creation is important, but I see Governments role in that as more medium-long term (at least as long as its private sector job creation we are talking about) and in relation to taxes, income tax levels have very little impact on job creation (obviously corporation tax is very relevant).

[pete]

I think when the government talks about training they ony see the amount of money spent & take no account of whether the training is relevant. The fact that this has largely been outsourced to FAS with no oversight seems to back that up.

While tax increases are required I think the government also need to do something to encourage investment & jobs creation. Cutting CGT, Employers PRSI or some encentive to employ new staff might help. Tacx breaks for property developers to build more will not help.

[mypost]

in relation to taxes, income tax levels have very little impact on job creation (obviously corporation tax is very relevant).

They don't have a direct impact on job creation, but do have in terms of revenue.

Tax increases = less disposable income = less money for people to spend = less revenue for the government. Less money to spend = less products sold = less income for employers = job losses = no new jobs created. Then the cycle goes round and round and round.

Tax increases do nothing whatsoever for stimulating economies. Training programmes are useless if the trainees can't get jobs as a result.

[OneRedArmy]

Tax increases = less disposable income = less money for people to spend = less revenue for the government.

1) The drop in spending that reduces indirect taxation is offset (to whatever extent) by the extra income tax the government collect.
2) In a liquidity trap (as we are now) the inescapable fact is that people would save the money that would have been paid in income tax in any case, ergo increasing direct taxation is the only option to raise the overall tax take.

Tax increases do nothing whatsoever for stimulating economies.

Agreed, but it this case the negative effect is the least worst option.

Unless you can come up with an economic argument that backs up your point there's nowhere else this argument can go.

[pete]

A drop in VAT rates would be the most pointless change as retailers will just put into their back pockets.

[dahamsta]

Depends how far you drop them. In the UK retailers in some markets - cars is one example - have decided to use the low VAT rate as a selling point, by offering products with "no VAT". That is, they're discounting by the VAT rate.

I don't know how successful it is, but it's a nice sales pitch anyway.

adam

[Fr Damo]

A drop in VAT rates would be the most pointless change as retailers will just put into their back pockets.

And what is wrong with that with so many going out of business and letting people go? They could choose to pass it on though 1.5% would mean nack all to the consumer or leave prices the same and make a few extra bob which was where I was coming from. (i am not in retail trade btw) 21.5% is simply to high.

[Macy]

The fact that this has largely been outsourced to FAS with no oversight seems to back that up.

Eh, why wouldn't they leave it with their Training authority? Experience suggests it's better for this Government, to keep it's grubby mits out of direct control (Political interference is one the problems in many semi states, not the solution!)

[pete]

Eh, why wouldn't they leave it with their Training authority? Experience suggests it's better for this Government, to keep it's grubby mits out of direct control (Political interference is one the problems in many semi states, not the solution!)

Just saying there was clearly no oversight in how the top boyos in FAS spent their money. Same could be said for many other semi state bodies. It doesn't take away from the work FAS people do there should be joined up thinking i.e. government policy should be linked to training policies.

[Macy]

Just saying there was clearly no oversight in how the top boyos in FAS spent their money.

Because they were, and still are politically bullet proof due to how connected they are.

[pete]

Because they were, and still are politically bullet proof due to how connected they are.

True.

[mypost]

Next figures out at 11 o'clock. Expect another 20-25k added on the scrapheap.

[bennocelt]

should be be betting on this?

2/5 it will hit 13% by the end of the year?

[Battery Rover]

Could we hit 400k today?

[Fr Damo]

Don't think so. But can I ask how this example is represtented in the employment/unemployment figures?

10000 People in a town. 5000 are working, 2000 unemployed and 3000 in school,college,OAP etc. On April 6th 2009 three companies who collectivelly employ 2000 people go on short time, three day which becomes one week in two for paid employment. This means there is only out putof 1000 people for the duration of short time in those 3 companies. How is the other 1000 recoreded in the unemployment figures?

[Battery Rover]

UP 20,000

Total Now 372,800

With Dell almost ready to start laying off and the impact on the surrounding area we could see the biggest monthly rise in history soon.

Spoke to a guy from Limerick yesterday and he told me that Dell was worth over 50k a year to him alone without the money he receives from suppliers to Dell and he is only a small opeartor with 3 employees

[Fr Damo]

I don;t disagree but it can't get much worse surely. 1000 people a day? over the next two months would mean about 420,000 unemployed by half year. Surely our public service need a certain level of employment in the economy to satisfy their wants and needs! February was me worst month in business, March up about 35% on Feb and down only 6% on last March.

Just heard Eammon Keane on Newstalk explain that unemployment figures represent all those getting assistance i.e short time etc, this is my question above answered.