mandag 11. november 2013

The New Blue-Blue Money Shuffle...Taking from The Poor and how NAV will end up with the Bill.

Now we see the true colours of the blue-blue government, who like in the UK are trying to appease the small business owners and blue meanies in Norway.

On the other hand they have a largely socialist agenda- opening up the state pension fund to pay for infrastructure and allowing more money per head to those most vunerable in society.

However the first thing to note is that they are open for more temporary workers and they have now removed a subsidy which allowed people on lower incomes to own their own home. These will both lead to more people being dependent on state money and a culture where working is less attractive than being on social benefits.

The national "house bank" is a state initiative to underwrite higher risk, lower interest loans for people like us in fact, who want to get on the property market but are exposed to temporary contracts and a lack of capital. Removing the low interest will directly lead to repossessions and will make borderline people with health issues see that work does not lend itself and going on social security sickness benefits is more attractive. It is laughably easy in norway to get onto "trygd" benefits and that I have not heard one ioata on in the new budget: originally the Frp party campaigned that these people should be out shovelling snow, but of course that takes beaurocracy. In fact that is an area for immediate cut- support for getting people into work.

Allegedly to counter balance getting people into work, the pale-blue-rinse-quite-socialist-spender government now will allow employers to have more freedom to employ people on (endless) temporary contracts. The finance minister claims that this will allow people who have been out of working life to get a foot hold. In effect it will mean that more people join the queue at NAV, the health, social security and work agency,  when it suits all employers.

Excluding layabouts who have "social angst" and the type of bad backs which allows them to go mysteriously on holiday to Tenerife each year, but not work a day in ten years, then Norway has extrememly low unemployment despite having the highest unemployment benefits in Europe. The fact is there is a working culture here and it is relatively easy to both get work and to get a permanent contract, which leads to consumer-confidence and personal security and home ownership.

Opening up for more temporary employment will mean a much bigger bill for NAV within four years, and a grey area like in the UK where people are fully dependent on state income to top up uncertain and part time work. It will not affect the types of jobs where there is a large element of training or a prerequiste for education - on the one hand employers will want longer term contracts and committment from employees, while on the other employees will seek out companies with permanent contracts and avoid temping once they have enough experience.

By in large the benefits of this new loosening up will be in the service industry, and for some business cultural reason, most ironically, in the same financial industry which now denies mortgages to people on temporary contracts.  I already experience the customer service level in private shops and restaurants to be on a par with the former eastern europe, and having people on temporary, seasonal contracts will lead to these positions being more social dumping with surly, untrained and unmotivated staff turning up with the lights on but no interest.

On the other hand it will also lead to more criminality as those in the border line areas of in and out of work begin to see that there is a more steady income to be attained from selling drugs, smuggling, VAT evasion , and fencing dubious sourced items.

My last employer had a policy of trying to have 20% of staff on contract. This prove completely impractical at every level in the organisation- in those positions requiring engineering skills, they got mediocre engineers or those who abused the job as a temporary short term income for a couple of months- hardly time to settle into the job. On the side of administration too, they could get qualified people, but when the temporary position was a required head count and desired to be permanent, they had found that they could not retain staff- they had spent time and effort looking for permanent positions elsewhere and did not even bother to negotiate, they just left.

For me I was more used to contracts and a fair deal of job insecurity and the poor employment protection in the UK. However with the cost of living here I have found that now I am only interested in  permanent positions and I am prepared to come down in pay to be able to work within a short commute to reduce costs and increase time with the family. A temporary job now, as I ended a contract which I made into a contract from a permanent job actually, would be that for me too- zero loyalty although I would use a job offer externally to squeeze a permanent position out of the employer!

Another effect is that when a couple have children, it is the partner in temporary employment who is most likely to take sick leave on behalf of the children.

It is already quite easy to employ people temporarily, but there is a border where you must give them a "permanent " contract which gives workers here as good employment rights as workers who are members of unions in Germany for example. So what this means is being able to employ people on successive temp contracts and lay them off when you have a hole in your cash flow or want to pay more profits out. There has been a counter balance in the employer paying some more redundancy but I have not looked into the details of this, and it may be that when a contract ends then there is of course no need for them to pay up: it is the state who will, as in the UK, end up giving out massive hidden subsidies to the type of industries who should stand on their own feet and develop quality service. This will go over into public health provision of course, where private companies and cash restricted departments will do the same to try and save in money when they can stretch a lower level of resources over a period with financial motivation in front of patient need. The state will pick up the tab.

The Frp and Høyre parties (progress party and right of the house pale blue tory party)  have many members who are the bourgeois - they own or manage SME sector businesses. An expansion of temporary employment will actually hurt the SME sector in Norway because it will make it easier for people to get into the larger companies in Norway in the oil, petrochemical and service industries where training abounds and also they are then in-the-door for permanent positions or when their position becomes a necessary one. Larger employers see employees as valued resources here, not a commodity of which a large percent can be brushed away easily to improve the free-cash-flow for a quarter. Being able to offer temporary contracts is far more attractive to the SME sector because they have less cash reserves and more obvious peaks and troughs in their turn-over to cost gearing. However they will find that they will struggle more to recruit properly qualified and experienced people who are not attracted to the insecurity of temping.

In trying then to "solve" a small problem of low level unemployment in general -  and this being here the actual issues of disaffected youth and immigrants of a non western back ground -  the new government will introduce more of a dynamic to place more otherwise productive people into state dependency on an on-off basis, while also presenting the SME sector with fewer good candidates. In reducing the investment in getting these two groups above into training and higher value work, they just create an administrative merry-go-round for NAV for them and for other non qualified staff who previously enjoyed job security and payed taxes year-in-year out, rather than collecting benefits on a frequent periodic basis. 

The longer term damage of a temp-contract-society is clear in the UK: more people dependent on the state in hidden figures, less people having access to owning their own homes, more being made homeless because they do not have a steady income, more choosing sick benefits over trying to work, and people staying longer on unemployment benefits while waiting for a permanent job.

Capitalism doesn't care: the blue-blue like to be able to say that they are getting more people into work, as they do in the uk, but they are shifting subsidy and public spending away from improving quality and efficiency through loyal, motivated and highly trained staff over to paying for all the down time and insecurity which follows an expanded part time and temp sector in the economy. That the  bill on this social insecurity shifts from other forms of state investment in people,  and most likely goes up within this government's first term,  capital will just call for cut backs and these will once again affect the non unionised, poorest section of society worst.

The danger is , as with the retail finance sector in oslo, that the level playing field becomes unbalanced and more sectors see the balance sheet short term benefits of employing larger proportions of their staff on temporary contracts. Also with a potential raft of privatistaions, this may lead to as in the UK, an erosion of quality of provision at the point of delivery where on the ground workers are no longer qualified, experienced or motivated in those areas. A culture where people grab temporary work from better paid temp jobs when they end, and misuse the lower end job for temp income with little or no motivation.

It becomes an anti-culture for business and particularly those involved in annual state contracts in newly privatised services- they will never want to employ people permanently until they have a virtual monopoly on provision.

In the UK we have a bigger service sector and on the one hand that soaks up unqualified school leavers, while on the other hand it becomes a kind of soft landing for many graduates and University drop outs who were under achievers and worked part time during their study.

The Scandinavian model of good wages, home ownership, medium high taxes and high permanent employment has been eroded in Sweden and Denmark, where unemployment is far higher than in Norway or Finland.

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