Saturday, 2 October 2010

We don’t bleed ill people any more, so why do we cut jobs?

I’m not sure what the definition of an economist is, but if the following irrefutable facts add up to anything more than fiscal nonsense, I may well be one.

Four things happen when you cut a job. 

The employer, State or private, saves the cost of a wage.

The government loses income tax revenue from the employer and the worker.

The worker cannot spend or in any way invest in the economy.

The State has to pay the worker benefit.

So if you’re an economist, or even a philosopher, help me out here, please, because this is your job we’re talking about; your mother’s nurse; your kid’s teacher.

Unless the worker who lost their job was earning a fortune (and we all know how likely the rich are to lose their jobs compared to us proles) how does the saving made by the cost of the wage in any way compare with the cost of the other three losses?

How does cutting jobs help an economy?


Paz said...

I realise that there will have to be cuts due to the level of borrowing, but it makes me mad the amount of money that the government pissed away when they were taking money in. They should be tried like the Icelandic PM, along with the bankers and developers.
They have made sure that Education, Health and infrastructure are bollixed for the next decade. And the threat of more tolled roads today, for roads that we already have paid for through our taxes, fucking brilliant

Charlie Adley said...

As an old-fashioned socialist there's nothing I desire more than for health, housing and education to be universally available at a high standard, but those are the areas that are being slaughtered at the altar of bank debt.

Strange how we were all told that we had to vote for Lisbon, Nice and all the other EU treaties because when times got hard, Europe would be there to help us out. Instead we are now destroying our infrastructure and services to fit in with what Europe, in the shape of the ECB, is telling us we have to do.

Did I miss something, or is the donkey beating the stick?

Paz said...

I think so