NOBODY doubts the good intentions of Labour Minister Sotiroulla Charalambous, but her recently announced plans for combating unemployment betray an incredible degree of naivety. There is hardly a single aspect of these plans that stand up to rational scrutiny, but the minister is determined to go ahead, convinced that they would have an impact on unemployment which has risen by 5.6 per cent the last two months.
The first plan involves subsidising the hiring of people who had been unemployed for at least four months. The scheme provides for the state to pay 30 per cent of the salary, for six months, with a ceiling of €3,000 annually; the employer would have to keep the subsidised worker on the job for a minimum of eight months. Presumably any company could apply for the subsidy. The amount allocated for this scheme is €4.5 million which, ideally, would allow the hiring of 1,500 workers, for eight months.
Some companies may use it, if the bureaucratic procedure is not over-long, but in a period in which companies’ main concern is survival, through cost cutting, the minister should not be surprised if her offer is ignored. Interestingly, the unions, which seem to advise the minister on her employment policy, found the €3,000 ceiling too low so she has agreed to review it. Why the unions, which will not be doing the hiring, have a say in the matter we do not know.
While this scheme could work to an extent, but without making a dent on unemployment figures, the second scheme is just ridiculous, even if it was well-received by the unions. This is why the ministry is having great difficulty working out its mechanics. Ms Charalambous said on Tuesday that the procedures which would apply had to be clarified through negotiations over the next two weeks.
This misguided scheme would give financial incentives to businesses, hit hard by the recession, not to lay off staff. We would look forward to seeing the criteria and procedures. How much would a company have to have been affected by the recession to be eligible for state help? And would the state pay the salaries of the workers that a company would have made redundant in full? For how long? If it pays only a part of the wages for a finite period the business would not make the required savings to survive. If the scheme is ever implemented it would be a disaster.
The minister has come with all these foolish, union-approved schemes, because she does not even want to discuss the only effective way of limiting unemployment – across the board wage cuts. Of course such a scheme would not meet with union approval and Ms Charlambous, having been a union official herself before becoming a minister, would not dream of raising an issue guaranteed turn her former colleagues and erstwhile advisors against her.
Yet the fact is that a minister, who was determined to limit the rise of unemployment, would have encouraged wage reductions instead of coming up with ridiculous plans that would achieve nothing apart from keeping her union friends happy.
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