Credit Blog Question – Create New Jobs or Use The Old Ones?
Can you recycle old jobs to fix an economy, or do you create new ones?
The Deputy Prime Minister Nick Clegg will be setting out plans to create 400,000 work and training placements to help tackle record youth unemployment. The £1bn youth contract programme will see wage subsidies worth £2,275 offered to employers to take on 160,000 18- to 24-year-olds over the next three years.
Mr Clegg will say the aim is to help young people “before long-term damage is done” but the problem has become bigger than they can realise.
Labour said it had questions about how the programme would be funded.
Personally it seems like another ‘guess’ at how to fix the youth employment figures and an expensive guess at that. If we have £1 billion lying around to ‘try’ and fix the youth employment problem in the UK, then why are we making so many public sector cuts and annoying teachers? Nick Clegg and David Cameron need to research the problem before they throw money at it as it’s going to be heavily flawed.
The plan is – if a 16-24 year old needs a job – the government will subsidise half of the UK’s National Minimum Wage for 6 months. Granted, it will incentivise employers to take these young workers on, but after the 6 months? Do the employers then relieve them of their position and take another youth on for the same position? Getting somebody to work hard for half price?
The problem with this ‘idea’ is that it creates no job security – anyone can have a job… for a couple of weeks… without job security you may as well have donated the £1 billion to a needy charity and at least you know it’s gone to a good cause.
The solution would have been to have used this £1 billion to set-up government lending for small business owners and people with good idea’s looking to go into business. There are two reasons for this -
The first is it creates brand new jobs with added job security – as the company grows, people are more likely to stick with that company.
The second is, it creates increased spending in the economy which in turn, creates us more money, spending, jobs and (in an ideal world) should fix the economy.
Surely by creating new jobs and getting more people into work this way, not only does the economy benefit from increased spending but people benefit from being offered a secure job for a new company that has a bright future? Rather than offering somebody a job for 6 months then leaving them in the same situation they were in 6 months prior.
Leave a comment below if you have an answer.
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