The " Swings and the Roundabouts " !

Treasurer Wayne Swan has announced a new scheme to encourage employers to have another look at those over fifty years of age.   From July 1, a bonus will apply for hiring the over fifties - and keeping them employed for three months.   At $ 1000 per head, it is a powerful incentive, but there is a limit.  A  cap has been set at ten thousand employees.

Most unemployed people are very much aware of how age damages their chances of getting a regular pay packet.  In many industries, forty-five seems to be the critical age when job applications cease to draw interest, and for most over fifties anything more than a temporary job is only a distant dream.

We have an employment problem at both ends of the age barrier.   The older unemployed can not get work because they are labelled as " too old " and young people miss out on employment because they are considered " too young ".

Obviously, this bonus scheme will not please everyone.   It will certainly result in some older people gaining paid work, but those jobs will be at the expense of opportunities which might have gone to the young unemployed.   Wage rates for young people are less than those for mature aged workers, hence that bonus balances up the difference.

Schemes such as this are really just tinkering around the edges.   The real reason employers are reluctant to hire is because of the " job security " measures that make dispensing with an employee both difficult - and expensive.  

Governments live in an unreal world when it comes to commerce.   The backbone of any successful business is the right to " hire and fire " as circumstances demand.  When business is good - you hire more people and expand.   When a recession takes hold you retrench and produce to the level of demand.   That is the way business has been conducted since the days that camels carried traded goods along the length of the silk road.

Today's laws have created an imbalance.  There are no problems with hiring - but firing is entirely a different matter.   An employer can be hauled before a court of enquiry and made to give detailed reasons for his or her action, and if the judging tribunal disagrees - can be saddled with a demand that the employee be reinstated, despite that employee being surplus to the needs of the business.

That costs dollars.   Lots and lots of dollars !   And it is one of the reasons that many employers are not persuaded to increase their workforce in good times.  They prefer to work a smaller number of people overtime, rather than take the risk of litigation when trade slows - and retrenchments are necessary.

It all comes down to a balance between the right of an employer to reduce staff when that becomes necessary, and the rights of those employed to get a fair deal by way of fair pay and job security.  Until we get that right - there will be unemployed at both age  ends of the work force.

Tinkering with employment by way of artificial bonus schemes merely distributes jobs by the vagaries of " the swings and the roundabouts ".    Some win.  Some lose - but the problem remains !