Socialised income protection is a market based dole

As referenced in my letter to the newspaper today, the Danes use an interesting approach to keeping the workforce fluid based on minimising the fear of retrenchment. They do this by maintaining incomes between jobs and removing redundancy payments. This is a free market approach to the dole and significantly reduces unemployment compared to a fixed dole (which has been empirically shown). Clearly it needs to be considered in light of Denmark's other socially progressive policy, but it just seems a much simpler scheme than trying to force people to work for the dole and keeping the unemployed essentially under the poverty line. Those who are highly employable will easily hop from one job to the next, those who are not considered economically valuable by society (those currently referred to as 'bludgers') can still live a reasonable life.

comments peter: I do like what i read in that article you reference about Denmark. I'm not very familiar with parental leave issues, but i like that parental leave in Denmark is "financed jointly by all employers" : I'd have thought that it does reduce pressure not to employ women. (Cf. I think Richard Branson on how to get around those annoying laws that prevent one from asking a potential female employee questions about whether they intend to have children: "It's easy: don't hire them".)

And I too am uneasy with protection systems that focus on trying to keep people in jobs that aren't economically sustainable as a trade-off against social stability. njh: It's a commons problem: If all employers jointly take on the cost of maternity leave, then any one employer has no advantage in not hiring and by not hiring, they potentially miss a good employee. heycam: Income protection instead of job protection sounds like such an obvious better idea. The whole car industry up-propping does annoy me.

I like the idea of trying to move the industry towards green stuff, but i feel like there should be a more direct way of doing that. "When you lose your job, you are immediately eligible for government-financed retraining or education to help you equip yourself for a new job"

Sounds great!




[æ]