Furlough 2.0, Unemployment... My solution.
Discussion
Ok this might not be a complete solution to the issue but it could go some way towards mitigating the impact of job losses and the even bigger benefits bill that's on the horizon.
What I propose is a form of modest Basic Income for those people who are willing to give up their current jobs and retire early and are in a position to supplement this modest Basic Income with their own savings, investment income, self employed income or private pensions.
This obviously frees up jobs for those who will be losing theirs.
That way (for once) those who have been hard working and prudent and lived modest lives might actually get to benefit from some of the ''free money'' that is on offer to other sections of society, plus those that do take up the offer to retire early would be spending money in the economy to supplement their Basic Income, money that they would have otherwise just kept ''hoarded away'' in savings accounts for another 10 or 20 years until their non-early retirement.
What I propose is a form of modest Basic Income for those people who are willing to give up their current jobs and retire early and are in a position to supplement this modest Basic Income with their own savings, investment income, self employed income or private pensions.
This obviously frees up jobs for those who will be losing theirs.
That way (for once) those who have been hard working and prudent and lived modest lives might actually get to benefit from some of the ''free money'' that is on offer to other sections of society, plus those that do take up the offer to retire early would be spending money in the economy to supplement their Basic Income, money that they would have otherwise just kept ''hoarded away'' in savings accounts for another 10 or 20 years until their non-early retirement.
Edited by mike74 on Thursday 24th September 09:39
There must be a lot of people in their 40s and 50s not fancying heading back to offices and the corporate grind who would be tempted. It’s like a voluntary redundancy on a national scale.
It could also be enabled with the pension system, maybe allowing access 5 years earlier as a one off to kick the can down the road some more.
I think it will happen naturally to an extent. Those aged 50+ will find it difficult to re-enter the workforce and will probably also be at most risk of redundancy. Lots of them will get a decent payoff and probably take early retirement.
It could also be enabled with the pension system, maybe allowing access 5 years earlier as a one off to kick the can down the road some more.
I think it will happen naturally to an extent. Those aged 50+ will find it difficult to re-enter the workforce and will probably also be at most risk of redundancy. Lots of them will get a decent payoff and probably take early retirement.
Argleton said:
Will they also have to give up their homes as well as their jobs?
They don't ''have to'' give up anything, it's all entirely voluntary.If they're in a position to support themselves (mortgage free, savings, investment income, future pension, possibly a self employed side line) to supplement what would be a modest Basic Income then what's the problem?
The level of Basic Income I'm talking about would be far lower than the current maximum furlough level or the average amount that your typical ''full time mummy'' is entitled to when playing the Universal Credit system to maximum effect
mike74 said:
If they're in a position to support themselves (mortgage free, savings, investment income, future pension, possibly a self employed side line) to supplement what would be a modest Basic Income then what's the problem?
Perhaps that we need a globally competitive economy and you'd have retired off experienced and successful people to give a go to those otherwise unable to compete in the market? And raised the tax burden to do so.The govt have banned evictions. Surely then they can ban redundancy. Have a furlough scheme based on turnover.
Turnover over £100m...employer pays 75% of wages, govt pays nothing. Why should we pay Starbucks wageroll when they never paid any tax in the first place?
Turnover £50m-£100m, employer pays 60%, govt pay 15%.
And so on down to small companies, where the govt pay 70% and the employer pays 5%.
(adjust the thresholds if needed, just a demo of the principle)
Turnover over £100m...employer pays 75% of wages, govt pays nothing. Why should we pay Starbucks wageroll when they never paid any tax in the first place?
Turnover £50m-£100m, employer pays 60%, govt pay 15%.
And so on down to small companies, where the govt pay 70% and the employer pays 5%.
(adjust the thresholds if needed, just a demo of the principle)
TwigtheWonderkid said:
The govt have banned evictions. Surely then they can ban redundancy. Have a furlough scheme based on turnover.
Turnover over £100m...employer pays 75% of wages, govt pays nothing. Why should we pay Starbucks wageroll when they never paid any tax in the first place?
Turnover £50m-£100m, employer pays 60%, govt pay 15%.
And so on down to small companies, where the govt pay 70% and the employer pays 5%.
(adjust the thresholds if needed, just a demo of the principle)
Are those turnover figures before you send them all home on pay to do nothing, or after? Turnover over £100m...employer pays 75% of wages, govt pays nothing. Why should we pay Starbucks wageroll when they never paid any tax in the first place?
Turnover £50m-£100m, employer pays 60%, govt pay 15%.
And so on down to small companies, where the govt pay 70% and the employer pays 5%.
(adjust the thresholds if needed, just a demo of the principle)
You just cannot go in blanket like that, i know businesses with billions in t/o and less than a percent gross margin. Likewise 30 million t/o and 75% margin.
The only way to stop redundancy is in incetivise not doing them, rather than banning them. Otherwise the whole business could fail for sake of 20% of the workforce.
sjg said:
UBI but not universal, just for the wealthy boomers. But not necessarily restricted to ''wealthy boomers''... I'm certainly neither of those things but because of the frugal, modest lifestyle I have so far lead and would be prepared to continue to lead I'd be in a position to take it up.
poo at Paul's said:
....
The only way to stop redundancy is in incetivise not doing them, rather than banning them. Otherwise the whole business could fail for sake of 20% of the workforce.
Why would a business do that? They'd just release the 20%.The only way to stop redundancy is in incetivise not doing them, rather than banning them. Otherwise the whole business could fail for sake of 20% of the workforce.
The government are trying to ensure the 20% do not get released. But I'm not convinced of the wisdom in doing that. I don't think government has the ability to work out whether the 20% would need to go anyway, whether it's temporary etc etc.
If the jobs were going to go anyway, all that any measure put in place by government will do is kick the can down the road. It's effectively paying increased unemployment benefit for a period.
If the losses are temporary because the jobs are highly likely to come back in due course, then I'm not sure this is the best approach to what is in essence helping businesses with their costs until such a time as the jobs come back.
I'm thinking temporary measures to help anyone made redundant would be wise. Cutting the costs of those made redundant - the scheme where mortgages were paused. Perhaps doing similar on utilities? Maybe even increasing unemployment benefit temporarily? (Though I'm not convinced that should be needed if costs are reduced).
Ditto for business - measures to help them reduce their costs. Not collecting VAT from them. Help with rent/rates. Other measures to help cashflow as chunks of a business go dormant for a period. But with tight criteria on which businesses qualify (multiple metrics to be used, but turnover, employee base, global nature, those making extensive use of transfer pricing etc should all be considered) and more assistance for those who don't simply dump staff now and for an extended period after the situation ends.
The German/French/etc systems might give some useful indicators for government, but the problem is their tax systems have been geared up to do this for a long time. Granted not to implement the benefits to this extent, but the principles have been ingrained for a while. Not so here, so great care is required.
I am very doubtful our government are capable of this in this circumstance. And we should all be worried - Sunak may surprise and come up with something groundbreaking and also map out how it will be paid for. I am not hopeful though.
mike74 said:
anonymous said:
[redacted]
Essentially yes, although the Basic Income figure I have in mind wouldn't even be as high as the current State Pension.So certainly a lot lower than the figures that we're currently paying to furloughed workers and ''full time mummies''
Byker28i said:
Current state pension though is around £8.5k a year? Thats not enough and you're suggesting lower?
Yes (personally I could live on £8.5k comfortably) but anyone taking it up would be supplementing it with their own savings, investment income, self employed side line etcmike74 said:
anonymous said:
[redacted]
Essentially yes, although the Basic Income figure I have in mind wouldn't even be as high as the current State Pension.So certainly a lot lower than the figures that we're currently paying to furloughed workers and ''full time mummies''
£134 a week for state pension, when you say less than that, how much are you talking? £100? £50?
I'm 44. I'd quite like to retire at 60. Fat chance!!
I don't think any part of the economic problems we face are answered by paying more people not to do anything.
One idea I had for a universal basic income was to start it off at one equal part per person of the national debt. That would mean it starts off negative, I.e. a tax, then reduces until the debt is zero. After that as the revenue from the tax is invested in things that produce a return and the return is shared amongst everyone.
As our current debt is about £35k per person or 85% of GDP that would mean something like an additional 10% tax for 20 years just to clear the debt (with 50% of the population actually working).
This might vary a bit either way as current spending and borrowing needs increase or decrease the debt.
That's a huge burden on those currently in their 30s and 40s who would pay for the bulk of it, however they would get the eventual payoff of a fully funded retirement and a debt free country to pass on to their children.
It's a bit of a get out for those currently approaching retirement who would pretty much retire as normal, though wouldn't receive any UI.
Beyond that it's a steady system which could be expanded to replace the range of taxes and benefits currently on offer, as well as the army of people required to administer them, freeing them up to contribute more. It would mean everyone had a vested interest in reducing the debt and then maximising the income. Every pound earned was worth earning and every additional pound of debt was felt by everyone as either increased taxes or reduced income.
One idea I had for a universal basic income was to start it off at one equal part per person of the national debt. That would mean it starts off negative, I.e. a tax, then reduces until the debt is zero. After that as the revenue from the tax is invested in things that produce a return and the return is shared amongst everyone.
As our current debt is about £35k per person or 85% of GDP that would mean something like an additional 10% tax for 20 years just to clear the debt (with 50% of the population actually working).
This might vary a bit either way as current spending and borrowing needs increase or decrease the debt.
That's a huge burden on those currently in their 30s and 40s who would pay for the bulk of it, however they would get the eventual payoff of a fully funded retirement and a debt free country to pass on to their children.
It's a bit of a get out for those currently approaching retirement who would pretty much retire as normal, though wouldn't receive any UI.
Beyond that it's a steady system which could be expanded to replace the range of taxes and benefits currently on offer, as well as the army of people required to administer them, freeing them up to contribute more. It would mean everyone had a vested interest in reducing the debt and then maximising the income. Every pound earned was worth earning and every additional pound of debt was felt by everyone as either increased taxes or reduced income.
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