All very well Mr Taft, but the reason we are in this sovereign debt crises is because of unions like your very own Unite, Siptu, Ictu and all the rest of them who created the monster that was benchmarking, if all our bank debt was paid off tomorrow and builders debts magically disappeared we would still have a budget deficit of nearly 20 billion even after sucessive savage cuts for the last 3 years and now that you and your comrades Jack o Conner and David Begg have ring fenced all government workers wages which are way out of kilter with the reality, the vunerable will suffer more than they need to, old peoples fuel allowence been cut, cuts to education and SNA numbers, our national debt increasing year on year, so in that context the €500.000.000 you write about seems like small feed to the outrageous wages, golden pensions and job security you and your fellow union leaders maintain at the expence of this country moving on. Perhaps your next article could feature..
‘Benchmarking, the wasted billions that broke a nation’.

It’s easy just to look at big businesses but there’s much more employment in the SME sector. They’re the one’s who are struggling in this recession. Many of them would have otherwise gone to the wall this year. Had it not been for the jobs initiative, we would have had a lot more dole payments to make. That could have easily been more than €500m.

No job creation measure is going to be perfect, but it’s better than doing nothing. We can stop a lot of job losses with this and it will allow space for even more jobs to be created. Much of these profits will be re-invested in job creation here. No profit, no jobs. It’s as simple as that!

Head of a Union giving out about wasting money? …giving out about increased labour supply? Please…

Great article! As i was reading this i realised….i wasnt shocked in any way shape or form. Not at all, but, now i do feel a little sick that this is something i expect in this country now. Oh sweet jesus

I don’t think it really matters whether or not they were going to introduce the jobs already, but I do have a problem with companies getting the PRSI cuts even if they haven’t introduced any new jobs. But maybe this is just a thinly veiled attempt to subsidise failing companies and protect existing jobs.

Benchmarking was based on unsustainable, unrealistic boom time taxes but mr taft and the rest of the unión leaders did not care about that and when it all Came crashing down, hey presto big deficit we aré all stuck with!

One of the internships available was for the position of ‘Labourer’. Ridiculous. The positions available obviously aren’t being monitored.

Superquinn just announced they are in receivership. Puts this article into perspective with poetic timing. The unions would sooner we were all on the dole growing beards than working.

How come people always know better way after, but never come up with this wisdom immediately after such initiatives are announced?

Large amount of sense in this, though just like IBEC analysis by their ‘experts’ it’s fair to ask: Which vested interest paid Mr. Taft to write this, and why?

a highly qualified friend of mine was offered 2.50 an hour yesterday. her prospective employer told her they could get fas trainees for that low. so much for ireland having a minimum wage

@ Páid Ó Donnchú – I work for UNITE union, as stated in the article. However, I don’t get paid to write my blog, Notes on the Front. Whether its from employers, trade unions, various political parties or individuals, arguments should be considered on their merits. In this way, we might find the common ground needed to make progress in these difficult times.

David Higgins – You make a good point. A targeted programme aimed at smaller enterprises suffering from loss of demand and limited/no access to credit, would reap greater benefits. That is why a universal cut in employers’ PRSI doesn’t make much sense.

Daniel Doran – there is no evidence (unless you have some) that reduced costs will translate into investment. Companies will only invest if, over a medium-term horizon, they believe they will get a return on it. The problem, however, is that consumer demand has collapsed. It will fall this year and will probably flat-line next year, with growth in subsequent years being feeble – according to the Government’s own estimates. In such a climate, there is little reason for companies – especially in the highly-discretionary spend areas – to invest. The best way to overcome this is to promote sustainable demand (higher employment, higher incomes, increased productivity, etc.). Current policy, however, is undermining demand. It will be a difficult time smaller enterprises reliant on domestic demand.

Karl Power – I have dealt with that issue on a number of occasions on my blog. You might to read through past posts. There is little to suggest that public sector labour costs are out of kilter with labour costs in other EU countries, or that benchmarking – and public spending in general – was the cause of the crisis. The crisis came from inappropriate pro-cyclical policies pursued during the boom and the bust, with a narrow tax base and a failure to direct public spending into social and economic infrastructural development. That, however, is not the issue here – which is about wasting money on ‘job creation’.

Movie Waffle – that’s only the beginning.

There’s plenty of employers out there taking advantage of the situation we are in. Pay cuts, crap salaries, treating people like shite, all because of the ‘recession’.

With an employer’s PRSI cut for all current employees it means they have more money to invest. This means more jobs, more money to expand. If PRSI had only been cut on new employees it would have had a much smaller impact and freed up no funds to get new employees to begin with. Like other’s have already said it is easy to focus on big business, the real winner here is small businesses

You give me even 30k of that and I’ll show you sustainable job creation and verifiable employment. The real problem is that too much of that funding is going to the usual suspects. These people put in charge of these funds and job creation have never started a company, run a company, or been accountable to anyone. How would they know who to give the money to?

With all due respect that’s absolute nonsense. There was no budget deficit until after the economy collapsed, which was not due to public sector wages but the property crash, the collapse of the construction industry, and the banking debacle.

Government revenue fell dramatically due to a huge decline in stamp duty, corporation tax and income tax and the deficit widened further due to increased social welfare payments as a result of high unemployment.

The reason pay rises were needed in the first place was the ridiculously high cost of living, in large part due to housing costs as a result of the property bubble and high rents pushing up the cost of consumer goods – again due to property speculation, fuelled by government policy.

Besides all this, public sector wages have already been cut by up to 20% when you factor in the pension levy and pay cuts, public sector pensions have been cut – to say nothing of the USC, increases in stealth charges and rising mortgage interest rates.

Cutting public sector wages even more will push more people under the poverty line as 49% of public servants earn less than the average industrial wage. By contrast 67% of those earning €100k or over work in the private sector. http://www.irishleftreview.org/2010/04/09/facts-recession/

Your post also assumes that cutting public sector wages or slashing public spending are the only two available options when many far better and fairer options are possible, including: capping public sector pay at 100k, abolishing tax shelters for the rich, increasing income tax on rich people – start with those on 100k+ – and introducing a wealth tax on high earners levied on immovable assets.

These people can afford it given the top 6% of the population are on over €100,000 and get 28% of total income, or an average of €190,699 each, while paying only 27% of their income in tax due to taxbreaks http://www.irishleftreview.org/2010/04/09/facts-recession/

And before everyone says this was before the recession: ‘A recent study by Merrill Lynch in 2010 found that the number of those with more than $1m (€814,640) to spend increased by almost 2,000 by the end of 2009, having decreased drastically in 2008. The study recorded the wealth of anyone who had more than $1m in cash and assets excluding their primary residence and jewellery, art or other collectables. The rise in millionaires by 2,000 people marked the first rise in the number of “super-rich” in the country for two years moving back towards its peak of 2007… The Sunday Independent’s “rich list”, published in 2010, showed that despite the recession
and Ireland’s economic downturn, its top 300 richest people are worth close to 50bn euro’ http://www.eapn.ie/eapn/wp-content/uploads/2011/02/wealth-distribution-in-ireland.pdf

Obviously, most of the cuts would be unnecessary in the first place if we stopped pouring money into the banks and the speculators who fuelled the bubble in the first place had to take their losses instead of socialising the costs the costs onto all of us.

As a small employer with 3 part-time employees, I hope the PRSI reduction will help me to keep all three employed. Despite suffering significant reduction in business and bad debts in each of the last two years I am striving to keep our staff moral up by maintaining their wage levels and talking things up. The problem is that I am finding it hard to believe my own spin as I battle privately battle every week to ensure there is enough in the bank account to pay everyone’s wages. The PRSI reduction is not much but it is a help. My staff and I are working extremely hard to survive through the worse recession in our lifetime and I find it difficult to listen to trade union criticism of a very small help we got in the form of this PRSI relief. If our business fails to make it through this recession, four families will become a burden on the state instead of currently contributing in VAT, PAYE, PRSI, Rates, and most importantly the self esteem of four families.

The internship money is a pittance compared to the huge subsidy granted to employers who lay workers off. Under current law, statutory redundancy payments to workers are a minimum of 2 weeks pay per year, but this figure is offset by a 60% subsidy from revenue, usually deducted from the prsi bill. In other words, 60% of statutory redundancy is paid for by the workers themselves via prsi. I don’t see anybody cribbing about this bonanza to bad employers who offshore Irish workers jobs with state subsidy. I’d rather see a little discounting for creating and retaining jobs than this bonanza for bad employers who target Ireland for cutbacks. This is a much bigger figure than the prsi reduction mooted. If even 200,000 of those on the dole got 8 weeks statutory at 600 a week, this means that a subsidy of over 900 million has already been paid to bad employers. Would we not have been better off to end this subsidy and divert it to job creation instead?

Great to see the author of a blog actually responding to posts. Well done Mr. Taft, I am impressed.