November 3, 2010

Contract employment

Posted in Your Ideas · 5 comments ·

It would be interesting to get information on how many people are employed are in Ireland on contract now. It seems to be a rapidly growing sector during this recession. This of course is going to cause major revenue problems for the government. The minimum wage or little more is the going rate. No pension or private health insurance. This does not bode well for government planning. Less revenue coming in. Contract workers unable to get bank/building society loans etc. I believe if this type of employment if it accelerates to very high levels of the total workforce the government is in trouble.
Anyone else have views on this

  1. G-bone

    Social Welfare Suggestion

    Not sure if leaving this as a comment on an unrelated subject is best way to go about this but cannot find a way to start new thread so here goes…my figures are not exact and this particular topic is not a hobby horse of mine or an attack on Social Welfare…it is merely an idea that serves to reduce our expenditure as a country with minimal or no impact on the man on the street. I am not claiming that my figures below are exact but the concept should be clear.
    The US employs a system whereby some proportion of Social Welfare is paid in the form of food stamps or vouchers. If we look at the amount spent on Welfare & FAS it is circa EUR22bn. Let’s assume that EUR15bn of this is paid to people who have the capacity to work in some shape or form and is paid to them in cash. My suggestion is that we pay half of any welfare payments in the form of food vouchers. The Government could then broker a deal with stores willing to partake in the scheme, regardless of whether they are Irish or not. As an example the Govt broker a deal with Tesco, Aldi, Superquinn, Spar, Centra, Londis, Lidl to give them a 20% discount on the EUR7.5bn of vouchers. The upside for the Govt and as a result us taxpayers is that our expenditure is reduced by EUR1.5bn. The people on Social Welfare can reasonably expect to spend half of their benefits purchasing items that these stores provide so as opposed to a cut in their benefits, they are receiving an equivalent medium through which to purchase items essential for their day to day lives. The money would be spent in the real Irish economy as opposed to over the border, and since all stores, both domestic and international, would be invited to partake in the scheme, anti-competition or protectionist issues could be avoided.
    Perhaps I am being naive or simply ill-informed as to the desire or even ability of stores like Tesco or Superquinn to be able to offer a 20% discount but like so many other businesses now, offering discounts to achieve greater turnover is the way of the world and a means of survival. The injection of 7.5bn of revenue into these firms would surely be seen as a welcome boost.
    This is just an idea but having discussed this and other ideas with friends, it struck me that not once in this crisis have I thought to myself “wow…that’s a very innovative idea/scheme that the Govt are implementing” and therein lies the problem. We have been so blindsided by an obsession with the International Markets and what they think of us (not a lot by the way) that we seem unable to come up with varied, untried and innovative solutions to the fiscal issues we are facing.
    I’d love to hear what you think of above – as I said my figures are not prescriptive and I am sure it is easier said than done but there are ways in which we can help ourselves and there are ways that the Govt must help us to help ourselves.

    • jnb

      G.bone–what a good idea. They’ve lost their jobs, they’re surviving on dole money–why not let’s humiliate them as well, and send them into shops with government vouchers. Maybe we should make them wear badges on their clothing so that those of us not yet in their position could look down on them. That’ll make them look for work–it’s not like aren’t any jobs out there.

      • HTH

        Sounds like a good idea. Good way for the government to save money, without cutting benefits.

        Hi JNB,
        You are assuming there is some sort of shame associated with being unemployed. I don’t think there the should be, but if there is some perceived shame, then maybe the vouchers can be less obvious, more like clubcard vouchers, or a credit card style voucher.

        Personally I don’t think there is any shame in being unemployed. Being employed means people are willing to pay you for your work, whether that work is preparing food, playing music, guarding property, teaching, creating technology, preparing accounts, writing newspaper columns, etc. The demand for different types of work and the related skills, will vary and people will find that there is not enough demand for the work they are willing and qualified to do. This is when other members of society will help out. The motives of the employed maybe selfish (just in case it happens to me) or genuinely generous (I have enough, time to share with the less fortunate). Either way there is no shame in accepting help.

        By the way, G-bone did not suggest that the unemployed need extra motivation to go out to work.

  2. KC Tax Accountant

    Jemser, I believe its improtant to think logically about the “contractor market”.
    There a number of points that should be made in favour of the use of contract workers:
    1) It is important to remember that getting goods and service produced at low cost through the use of contract workers is good for the economy. All other things being equal, consumers will in the vast majority of cases purchase from the lowest cost seller. In a global context we need to be producing goods and services at a low cost in order to prevent our economy from being even more eroded from the tide of euros leaving this country on goods and services being produced cheaper abroad. The lesson to be learnt here is that its better to have a low earning sector of society that having an unemployed sector of society
    2) Having a society that allows contract workers will enable companies to expand and grow more. Companies will be able to take on workers as and when work is available. To use an analogy its no good having a shop full of ice cream in the middle of winter. The lesson here is that companies need to be able to take on additional staff on a contract to cope with the fluctuating levels of work, otherwise a company will under perform by their reluctance to take on permanent staff.
    3) Contract work is often an opportunity for individuals who have drive to earn more money and or supplement their other work. For example many part time farmers were able to supplement their living standards and invest in their farms having working in the building industry. Equally many students are glad to take part time or contract summer work to fund their education.
    4) Contracting allows companies to access the resources they need for the time they need it. For example a multi-national company installing new plant will need a (highly paid) project manager to oversea the project — obviously when the construction is finished they wont need that project manager — the lesson here is that making permanent positions for temporary post is ridiculous
    5) Contracting is often the first step by which an individual can set up their own business. In other words contracting fosters entrepreneurship — to use a recent example look at how many of the builders of the 1990’s started out as subbies and then grew their business to provide full-scale building services. (Please don’t confuse the context with all the woo’s of the building industry)
    Upshot is contracting is a vital part of our economy — be careful what you wish for — the end of contracting would really spell the end of our flexible workforce and liberla economy

    • Steaf35

      While both comments are valid, the present employment contract situation is also being applied as a tool by certain companies to avoid any redundancy payments in the future; Two variations; Temporary contracts or Fixed Term contracts; Temp contracts normally cover staff illness or maternity leave; Manipulation normally ocurs during FT contracts; If an employee is to be recruited after completing two terms on a FT contract each time, the employee must be offered a full time permanent contract.

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