Friday, July 13, 2012

6. How to kill an economy and destroy jobs.

If I were asked to “destroy jobs in SA” what would I do?

Ensure that everybody in a job is taxed as much as I can – it will surely destroy the incentive of wanting to work.

Ensure that everybody that is not in a job is paid an amount if he/she is registered as unemployed and offer grants for their children. Also make sure that social grants are increased as much as you can so that as many people as possible could benefit – it also increases the incentive not to work and have to care for their own.

One can also destroy jobs by introducing price controls – this limits profits and the incentive of growing businesses and employing more people.

Introduce price controls and taxes - it limits the profits companies make and have available to invest in additional machines and productive resources and thus reduce employment.

Impose high criteria for job entrants – these requirements will prevent young people and people without skills of entering the job market and so reduce their ability to learn informally and cheaply on the job. These hurdles for new entrants can be couched under the guise of protecting the public or keeping out the riff-raff – the effect will be the same: keeping less educated out of the possibility of getting a job and learning while performing entry level tasks. The vested interest groups of the "professions" act as huge barriers to the not so privileged to enter particular markets

Make it difficult for companies to fire people – this will make them reluctant to employ people in the first place.

A surefire way of destroying jobs is just to pile up the bureaucracy – BEE reports, FICA, credit act, forms, reports, tax clearance certificates, - this will keep productive organisations too busy to produce wealth and jobs.

Create many government bodies that rely on the private sector to populate committees, project teams, and governance boards. Change the way things are done on a regular basis - this ensures that attendance to conferences and workshops occupy the productive time of people that could be used to the creation of goods and services.

Establishing a bloated public service is a method of destroying real work - by real work is meant – producing goods and services other people want and are prepared to pay for.

Get governments to hold a monopoly on key industries on hospitals, public transport, postal services, electricity generation, protection services, refuse removal and schooling – such competition from subsidised organisations just puts in that extra hurdle in the path of the entrepreneur that can do it more cheaply, more efficiently, create innovative solutions to problems and through his actions – creates real work.

Tax is the best way to destroy jobs – the more one taxes anything the less one has of it. This is where the focus should lie in keeping people poor and jobless. One should leave no stone unturned to tax and ensure that taxes are increased are paid for by the productive sector of the economy. High import taxes also increase the cost of production to make our exports uncompetitive - this also vause the economy to shed jobs...

These taxes should be also be used to make government bigger – this will make it look as if one is growing employment, but what one is in fact doing is exactly what ticks do to the animal they are living off. They are thriving while the animal (economy) is dying. A sure way of killing jobs.

Encourage minimum wages - most entry level economy students will be able to tell you that supply of labour will increase - but the very demand for that labour will decrease. Here is an extract from an FMF article that clearly highlights the problem: "Another job-stopper is the minimum wage. COSATU’s Patrick Craven says the IMF is wrong to suggest that labour unions should commit to “wage restraint”. He says that even higher wages will bring about higher economic growth by stimulating consumer sales. Let’s take this argument to the extreme to see if it is valid. Pass a law that says every worker must be paid R50,000 per month. How many businesses would survive and how many people would still have jobs? Common sense tells us that such a high minimum wage would cause massive job losses. It also tells us that at any level, enforced minimum wages cause some degree of unemployment. There is no escape."

Punish people for employing people - By making it very difficult to get rid of people that do not perform well and imposing onerous processes to sever the relationship with employees by employers, one limits the willingness by employers to enter into a mutually beneficial relationship in the first place. This leads to what can be termed as Regulatory unemployment: That is unemployment caused by laws and regulations. During the Apartheid years job reservation laws, pass laws and other measures caused hardship and misery through forced unemployment. In the same way do minimum wage laws, BEE legislation and other laws currently prohibit the entry into paid employment for many individuals and ensure that people who wish to enter the job market are restricted in doing so freely.

Encourage cronyism - get your comrades in the cader do the job rather than the best person for the job - that way you build the ongoing loyalty of the select few to your political hegemony.

Jobs are a result of economic growth - let us not kill the goose that lay the golden eggs: Free Market Capitalism

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