It’s entry AND exit

06/12/2013 § 3 Comments

Oh, fer the love of Mike.

Thousands lose jobs¬†under the new-ish 90-day trial rule.¬†Sure, and yes. That was always going to happen. As the Minister points out, however, thousands more were hired under the trial period rule, and around a third of those hires depended on the trial period. So, let’s do the math from the Dom Post:

Hired: 69,000 in trial period in 2012, of which possibly 1/3 depended on the trial period = 23,000

Fired: 18,000

Net: 5,000 in 2012.

The point of this sort of legislation is to overcome a lemons problem. Employers don’t know the quality of employees until they try them out. A bad hire — one that doesn’t fit — can wreck a small business. That makes employers averse to hiring — better to muddle through. If they know they can reverse a bad decision fairly costlessly, they are more likely to give someone a go.

That will mean more hires. It will also mean more firings.

So, who is going to tell those 5,000 people (or whatever the number is) that they can’t have jobs because someone else has been ‘unreliable or had a bad attitude’.

And just by the way, I can’t believe that this work from 3 years ago is the only econometric analysis of the law. Hasn’t someone else done something better?


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