Sunday, 20 May 2012

Politics vs economics


>Make sacking people too difficult, and companies wont take the risk on hiring them in the first place.
> Good riddance, I say. Let's have only decent companies in the UK.


It's incorrect to consider businesses as moral beings doing you a favor by paying you a wage that you are happy with, that's not how businesses function. It is closer to reality to consider them mindless automatons that will pay you the wage you are happy with only if it is beneficial for them to do so. It is impossible for a business to continue to operate by paying its employees a wage more than or equal to the profit they generate for them, it's a simple math equation, it is not a question of "good or bad". (although there are certainly some companies that have better conditions for work than others) the question then becomes how do we best increase the number of companies that can give you favorable conditions.

I don't have a perfect answer to that question, but the best answer is most certainly not an attitude of "fuck em", if they don't want to pay me a wage I like then they can get lost. As I said before, it's a simple costs/profit equation on whether or not a business is capable of hiring people, making it difficult for them to adjust to make use of that equation does not help you in the long run.
As another commenter explained: "Increasing the difficulty for an employer to terminate an employee's contract means that employers by and large will not want to take the risk of employing young candidates with little experience. The knock-on effect of this is an increase in youth unemployment."

It is not the case that if you make it increasingly difficult for companies to fire workers that all the "bad" companies that don't want to pay you a wage you are happy with will disappear whilst we are only left with the "good". If it's not profitable for them to hire workers they won't do it, it's as simple as that, no amount of regulation will alter that reality.

I have the same goal as most people, I want people to be paid well in jobs they enjoy, retire young and always have the reassurance that there will be work available to people if they want it. The best way to achieve that (I believe) is with an understanding of economics. http://www.youtube.com/playlist?list=PLA4D0A81DC4D9D2E7

In the absence of science and economics politics is a lot like a shouting match with no standards of evidence or methodology to get to the right conclusion.

>And we should do more to tax products made abroad and services offered from abroad.
Consider what effect this would have from a business point of view, you're producing things and importing them to the uk, then taxes on imports of whatever product you are producing increases. How do you respond? You respond by either increasing the prices of your products so you can compensate for the losses of the tax or you find another country to sell your products in and you stop selling them in the UK, if you do that the UK government gets less revenue through taxes http://en.wikipedia.org/wiki/Laffer_curve . Now consider the effects that has on consumers in the UK who may be struggling to find a job or finding it hard to keep paying their electricity bills etc, the prices of the product they were previously buying increase, how does that help them? Or even worse, the product they were previously buying ceases to be on sale because the company selling it decided it wasn't profitable to sell here anymore, how would that help people?

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