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Comments on: Compulsory redundancy payments http://www.tvhe.co.nz/2008/12/12/compulsory-redundancy-payments/ The Visible Hand in Economics Sun, 14 Dec 2008 20:45:03 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: reginald http://www.tvhe.co.nz/2008/12/12/compulsory-redundancy-payments/#comment-4182 Sun, 14 Dec 2008 20:45:03 +0000 http://tvhe.wordpress.com/?p=2033#comment-4182 Hi i just want to let you know that i love your site and i would like to be linked to your site.
Thank you

]]> By: Matt Nolan http://www.tvhe.co.nz/2008/12/12/compulsory-redundancy-payments/#comment-4175 Sun, 14 Dec 2008 19:13:22 +0000 http://tvhe.wordpress.com/?p=2033#comment-4175

DG :
I don’t see why there should be any redundancy at all. If you are fearful of the income drop that would come with unemployment, you should save more or take out income insurance (esp if you have a big mortgage).

True. However, I see the argument more as one about why we would want to increase the cost of removing labour – in what ways does that improve outcomes and in what ways does it hurt outcomes.

]]> By: Matt Nolan http://www.tvhe.co.nz/2008/12/12/compulsory-redundancy-payments/#comment-4174 Sun, 14 Dec 2008 19:10:39 +0000 http://tvhe.wordpress.com/?p=2033#comment-4174 “When most people take a low level job they accept the remuneration offered rather than negotiating how their pay will be split between super, health insurance, redundancy and take home.”

Indeed there is a cost to negotiations. However, I thought a mix of unions helping form contracts and education surrounding the payoff associated with contract types would more than circumvent this issue.

“I think the effect of inertia in opt-out vs. opt-in retirement schemes shows that many people don’t necessarily “negotiate a contract with a severance package in the first place” that best suits them.”

I would like to see the “inertia” associated with opt-in vs opt-out retirement schemes – the initial version of Kiwisaver would have shown this. However, I’m not sure that we actually have a fair idea of how much “inertia” exists.

Even if the small transaction cost of thinking is significant we have to ask – is legislating the best way to improve outcomes, or could better education/information provide the boost.

“Compulsory redundancy payments could reduce the burden on the social welfare system so may be in societies best interest if not the individuals.”

Why? The money is coming from businesses instead of from taxes – which stem from a mix of liabilities on businesses and households. Why should the entire cost of providing a welfare net fall on businesses?

]]> By: DG http://www.tvhe.co.nz/2008/12/12/compulsory-redundancy-payments/#comment-4054 Fri, 12 Dec 2008 10:46:15 +0000 http://tvhe.wordpress.com/?p=2033#comment-4054 I don’t see why there should be any redundancy at all. If you are fearful of the income drop that would come with unemployment, you should save more or take out income insurance (esp if you have a big mortgage).

]]> By: Ebolacola http://www.tvhe.co.nz/2008/12/12/compulsory-redundancy-payments/#comment-4055 Fri, 12 Dec 2008 02:00:22 +0000 http://tvhe.wordpress.com/?p=2033#comment-4055 When most people take a low level job they accept the remuneration offered rather than negotiating how their pay will be split between super, health insurance, redundancy and take home.

I think the effect of inertia in opt-out vs. opt-in retirement schemes shows that many people don’t necessarily “negotiate a contract with a severance package in the first place” that best suits them.

Compulsory redundancy payments could reduce the burden on the social welfare system so may be in societies best interest if not the individuals.

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