Paying Employers to Keep Their Workers on Payrole
Economists always have a multitude of proposed solutions to solve economic / social issues (as to to the effectiveness of these measures - we shall leave it to another debate).
What the Singapore Government proposed today was quite interesting. Perhaps it was due to me not paying attention during the economics classes - but a job credit plan (whereby the Government pay 12% of each employee’s monthly wage to the employers, upto $300 per month, so as to encourage firms to avoid retrenching workers) sounds like a brand new philosophy to me. (Although in substance it may be similar to Obama’s “Making Work Pay” tax credit programme)
Some economic ‘gurus’ may argue that such actions may “distort the labour markets” and adds ‘friction’ to the smooth economic functioning of a competitive firm, whereby redundant/ineffective workers may be kept on the payrole due to such economic packages. However, my word to these ‘gurus’ is to wait till your own job is on the line - where you ponder about how to pay for your next meal - before re-evaluating such economic packages.
Too much blood (read: jobs) have been shed in this global financial downturn. Thank goodness for such plans to save the day for the commonfolks (at least for Singapore)
Read more - US largest stimulus package - US$825bn plan (WSJ)