Friday, 11 June 2010

Voluntary cuts

I was engaged in a discussion last night night about whether there'll be a double dip recession due to the cuts in the public sector.
As someone who's been cut by the private sector twice in the last five years, I'm a little ambivalent.

However, understand that, via Raedwald, Glasgow City Council needed to make 4,000 people redundant, so they asked for volunteers and got 3,000 folk taking up the offer.

Is this a symptom of a workforce who hates their job, or people confident they can find work elsewhere, or who have enough in savings to take time out from paid employment?

If its highly skilled folk, then surely this takes skills away from the council, leaving only the incompetant people left to provide council services, so you get a lower quality of service. On the other hand, in the great scheme of the enconomy, the highly skilled folk will find new jobs quickly so them and the incompetent folk still get paid, still spend their wages and keep the economy ticking over. Whilst if it was the incompetents who got redundancy and were unable to find new employment, then they'd just be a drain on the economy.

This is still too general, you don't want to lose an average number of people from across your entire council sector, you just want to lose people from the services that the council are crap at or shouldn't be providing. Like parking inspectors or diversity co-ordinators, whilst keeping social workers and garbage collectors. But offered the chance of voluntary redundancy, its going to be the folk in non-jobs who grasp most tightly at job security, and the folk with the most valuable skills who jump ship.

Its a difficult one, how you prioritise lowering the cost of local councils and maintaining the quality of service.

It would be interesting to see, in Glasgow, the spread of redundancy volunteers by department, just as a sign self-confidence and skills.

Anyhoo, back to double-dip recessions, if everyone, in any sector was offered voluntary redundancy, would this inherently lead to a recession, or by making the labour market more liquid, would it speed up the recovery?
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  1. it would mean that we all get to keep/spend more of our own money as we don't have to pay their wages. Hence, as the overall amount of money in the economy should remain the same, it should be spent on goods/services rather than debt interest, increasing demand and hence employment.

    Or sommat like that.

  2. Bastiat's essay about what is seen and what is not seen applies here. Also, thinking about this sort of thing in terms of money probably doesn't help. Think of it in terms of people doing useful work. If people are leaving the council and doing work for the private sector, I call that an increase in useful work done.