by Rick Lowe
Yet another bill will be presented to Parliament this week where the general public and business community will not be allowed comment until after the fact.
In typical fashion the government is crafting amendments to the National Insurance Act so they can offer unemployment insurance to Bahamians.
One might believe it is magnanimous of the government to offer this programme, but even I would be a hero if I could pass laws to take money from one person under the threat of fines or jail time and give it to someone else.
Even though I understand the draft bills are being "kept out of the public domain" somehow copies were delivered to me, so here's my observations after a quick read:
1. Computer payroll systems will have to be changed to accommodate this.
2. As usual the Minister is king. The Minister can extend the period at his discretion. Of course that is not emphasised or discussed in the public discourse to date.
3. More forms will be required when an employee is dismissed with a fine of $200 a day until they receive them.
4. This represents a tax increase at the worst possible time, without a corresponding decrease to compensate.
5. Like the National Insurance government mandated Ponzi scheme, it will go bust as all these programmes tend to do.
6. With all the best intentions of the political class, abuse will become ingrained in the system that honest tax paying Bahamians will have to fund.
All in all, it emphasises the Socialist tendencies of our government.
If history has proven one thing it is that Socialism is a pipe dream and this puts The Bahamas firmly on the road to becoming another failed Socialist state.
Give me Capitalism, warts and all, any day.
In their effort to mitigate the loss of employment – this legislation like the minimum wage has unintended consequences. In both examples it increases unemployment particularly for lower income bracket as business adjusts it employment policy to accommodate the added cost.
It is a measure of the ignorance of basic economics by legislators.
When market prices are artificially increased -in the case the job market – hiring and salaries must be adjusted to accommodate the increased cost of employment.
As one person said to me most indignantly when this was being discussed, in the blind by most I will add,
and I had explained that this increase in doing business will be passed onto the public,
“Well, we’ll just have to put some price control measures in place to stop them from doing that”
Ignorance personified unfortunately.
Overlooked I think is the fact that, to succeed in business one has to make rational, informed, logical decisions, and wronly taken decisions result in losses/failure.
Is the private business sector the only class of people left that labour under these unfair truths?
There ought to be a law…….
My personal view is that government handouts such as this proposed unemployment benefit are universally abused. And, if the ‘great’ countries of the world can’t control the abuse, how will we? (Oh, I forgot …. those great countries are going bankrupt!)
The comments in yesterday’s paper (Chris Lowe?) about the required severance pay in our current labour laws had merit – businesses already pay mandated ‘unemployment benefits’ to non-voluntary departing employees, so with the introduction of a new unemployment tax/benefit, will those employees end up getting 2X in benefits? No incentive there to rush out and find new employment.
And what happens to the voluntary departing employees? They choose not to work and are paid benefits? Or the ‘dismissed for cause’ employees – do they get benefits if they embezzled funds from their employer?
There are a dozen other scenarios. In the UK, for example, unmarried women are ‘rewarded’ with benefits when they continue to have kids, remain unemployed, etc. Not that that would happen here!
I haven’t seen the proposed plan document, but I take it there is a time limit for benefits to be paid, i.e. if you don’t go get a job within some period the benefits will stop? The Help Wanted pages in the classified are filled with job opportunities so presumably the period of unemployment will be very brief!!!!!
I too haven’t seen the proposed bill, so I’m talking only from my knowledge of Unemployment Insurance schemes elsewhere. In general, UI or EI (Employment Insurance) as it’s sometimes called, is not a handout from the government, rather it’s an insurance scheme into which empoyees contribute. Employees become eligible only after having contributed for a certain period of time. Benefits are calculated as a percentage of an average salary. Benefits are for a limited time period during which the recipient has to show evidence of looking for work (registry on job search boards, etc.). In some places, benefits may be tied to re-training programs.
UI or EI was originally intended to minimize the period of unemployment. The whole intention is to provide recipients with the support to enable them to find and secure suitable re-employment.
UI was never intended to be welfare. Welfare (social security, national insurance, etc) was originally conceived as a way to stimulate demand. The idea arose out of the Great Depression. In economic downturns, people spend less, businesses fail, more people are thrown out of work, and you get a vicious cycle. Welfare payments are seen as a way of stimulating spending – getting money into the hands of people who are going to spend it. The big lesson people took from the thirties was that a cycle of demand contraction was disastrous and extraordinary measures would have to be taken to break the cycle.
The point I’m making here is that neither welfare nor UI are intended to be socialist measures. Quite the opposite, they are designed and intended to stimulate market economies.
All of that having been said, I’ll be the first to admit that these measures have been abused and used for purposes for which they were not intended. As they say, there’s many a slip between cup and lip…
What is this, lessons from Obama ? I think businesses are being taxed way to much now, plus,have almost NO rights at all. Fidel is starting to look like a mild man.I think we the people should tax the hell out of the Politicians.Take away their salaries, take away their cars & drivers, limit their travel to totally necessary trips only, no more pensions. This is absolute bull.It is past the time for businesses to say, OK, enough, none of us are going to pay another dime until you stop killing us.What if we all did that? Just my opinion.
One by one, competent people are giving up, thowing in the towel, walking away.
Not so noticable unless you stop your own mad rush in life and think about it.
Part of the problem is the feel good or politically correct way to ignore the realities of a stagnant society which is not just on life support, but whos members have willingly hooked themselves up to the machine.
Reduce it to this simple equation:
If I am stranded on an island with resources that will enable me to eat, I must still convert those resorces into consumable form, or I will perish.
To think that someone will magically appear to harvest those resources and comvert them so that I can eat is folly, yet this is how government is insisting it can function although in their case, it is the private sector who produces the resources and converts it into consumable form, but for the government to feed itself and its dependents with.
Harsh? I don’t think so, just reality.
Government produces nothing and can give nothing other than what it has first taken from someone else.
It is eroding its own premise for existance, and unfortunately will destroy many with it in its persuit of those assets of others it needs for its own political handouts and purposes.
Reality bites.
.
And it takes out chunks, not just the bite !
Notice the beating the British P.M. is catching?
Obama changing tune?
Our goons sweating the unknown?
They’re gonna need competent people, to help them deal with the realities they have conveniently avoided for decades.
We do indeed live in interesting times.
I was driving down the road yesterday and found a local radio station airing the proceedings from Parliament. Turns out it was 810am ZNS on FM 104.5
but, I had my worst fears and suspicions comfirmed:
I believe idiots have taken over the house!
The utter lack of civility, utter lack of respect to the proceedings or member holding the floor, the lack of content especially, just absolutely disgraceful.
I never watch those preceedings on TV because I get tired of looking at the Speaker seemingly asleep while voices drone on with the latest offence perpetrated by some other child of the playground, and also because it looks as if not too many members attend.
I believe every one of those elected to that house are, as a group, a major component of the problem.
There is no way they could possibly be ideologically representative of the people of this country.
How sad if either they are, or are not.
Unfortunately you are right.No more right or wrong or whats right for the country, just a big good for nothing animal house.Just the fact that they refuse to deal with the judicial system sends a very strong signal to me. Is it because they are all lawyers & are making a killing out of the system the way it is & do not want to change it ? Just my opinion.
Agreed, they do not represent me.
Also, and not to merge two treads but just as some brokerages seem to owe government millions in un remitted duty, I understand it is modus operandi for lawyers also, to not pay stamp tax on doc’s, ect even though clients do remit same to them.
Personally if I ever give anyone funds to pay anything anywhere on my behalf, I ask for the reciept.
It is so that trust never becomes an issue.
My Grandfather, once in the Treasury taught me that.
Incedentally, when the receipts stopped flowing in the treasury, he resigned.
Something about not wanting to be held accountable before a Royal COmmision of Inquiry.
Understand, the right thing to do. The problem we are back to now is the accountability one, or the total lack there of.
The two missing components of a civilized society:
Trust and accountability.
Trust of each other and of our elected officials and courts ect.
Accountability to the written laws of the land, and therefore each other.
These have been absent for decades.
They are not easily re-found.
DP – I’m not advocating or knocking Unemployment insurance. I’m just noting that it’s a mistake to think of it as a path to socialism. Rather it was conceived to make capitalism work better. Anyway, that’s neither here nor there.
Nor do I believe that businesses should pay for UI. Employees who wish to participate should contribute out of their own salaries. Or if it is to be made mandatory, it should be a mandatory employee-side contribution. After all they are the ones who benefit from theses programs.
I think there’s a much bigger problem in the Bahamas, though. It’s the belief that people have that something is owed to them, that it’s the government’s responsibility to support them and find work for them. Moreover, the government have turned the ministries in to job creation programs rather than agents of essential services.
Bahamians no longer take responsibility for their own success or failure. We have become a nation of dependents.
Thanks for stopping by again Mr. Bethel.
I understand your position, but do not wish to trust any government with my unemployment plan.
Look what they have done with our NIB funds.
Also, when we consider the fact that there is a mandated Unemployment Scheme in place with severance pay requirements, there is no justification for this in my mind.
And you hit the nail right on the head:
“Bahamians no longer take responsibility for their own success or failure. We have become a nation of dependents.”
I could not agree more Rick/Eddie. Nobody seems to think they are responsible for anything anymore. This is foolish.People seem to think that the Government can do everything for them, how can they when they can’t even deal with the simple things like moving the Montague ramp.We are responsible for ourselves.I think this all comes from the old stale promises of politicians, when they are only doing what they should be supposedly anyway, & they can’t even do that.
Someone sent me this & I thought it was great .Socialism at Texas Tech
When my dad attended Texas Tech, he had an economics professor that said he had never failed a single student before but had, once, failed an entire class. That class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer. The professor then said ok, we will have an experiment in this class on socialism.
All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A. After the first test the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. But, as the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too; so they studied little. The second Test average was a D! No one was happy. When the 3rd test rolled around the average was an F.
The scores never increased as bickering, blame, name calling all resulted in hard feelings and no one would study for anyone else. All failed to their great surprise and the professor told them that socialism would ultimately fail because the harder to succeed the greater the reward, but when a government takes all the reward away; no one will try or succeed.
Thanks DP.
I received that as well and was going to post it as a blog, but you beat me to it.
It’s spot on.
Thanks Rick. Could somebody tell me what is going on with our PM ? Now he is talking about the unemployment Insurance as a stimulus plan as well & also increasing the national insurance payments !The only thing this is going to stimulate is the pocket of the government & take more money from the very same businesses that keep them going.
Good news ! We do not need the unions anymore, we now have unemployment Insurance !