Mini-jobs: Will they help?

A new legal category of work might help people into unemployment.

The creation of "mini-jobs", which allow people to take on work without paying tax or national insurance, is being considered by the Treasury as one of a package of measures to make it easier to create employment.

The idea – being promoted by some influential Conservative MPs – is modelled on a scheme in Germany, in which employees can earn up to €400 a month (about £314) without giving up any of their salary, and employers pay only a flat rate to cover pensions, social insurance and wage taxes, making administration simpler.

People can hold several mini-jobs up to the €400 a month tax-free limit, with the only impact on their income being the reduction of unemployment benefit over a certain threshold. Between €400 and €800, workers pay tax on a sliding scale.

As discussed in an ex-ante appraisal of Germany’s 2003 mini-jobs reform by the DIW Berlin, the plan is essentially a subsidy on low earnings so as to increase employment in low wage markets and to ease the long-term unemployed into the labour market.

Firstly, on the supply side, it is argued that welfare recipients are unlikely to enter the labour force when the already low wages they have access to are further depressed by social security contributions. Secondly, on the demand side, DIW argue that:

Given limited downward wage flexibility in the low wage sector due to binding minimum wages, SSC have to be borne at least partially by the employer of low-skilled workers, thus reducing their employment.

The Free Enterprise Institute, which has spearheaded the appeal for "mini-jobs" in the UK, has praised the German reform for lowering youth unemployment, increasing turnover in the jobs market, and increasing temporary work by two per cent in ten years. The report goes on to lament the fact that temporary workers account for just six per cent of the UK labour force, in contrast to Germany’s 15 per cent.

While the merits of increasing temporary employment are at best contentious, German commentators have criticised the mini-jobs model for creating "a massive disincentive for the unemployed".

Rather than bridging the gap between the labour market and the marginalised, they argue, mini-jobs have further ostracised the peripheries of the labour force by trapping them in low-wage jobs that offer no margin for progression. It is held that the subsidies, by inflating the value of low-wage jobs (as is intended) will lead people to substitute longer-term, more stable sources of income with mini-jobs. This, one can argue, while soothing unemployment in the short run, can have hazardous effects for income inequality, as well as stifle the development of a skilled labour force. Similarly, employers will be encouraged to fragment existing full-time jobs into series of mini jobs, thus extending the potential evils of the reform beyond those that are currently excluded from the labour market.

Consequently, the subsidy (as predicted by the aforementioned DIW paper) may reduce tax revenue without actually reducing welfare subsidies. This is confirmed by Johannes Jakob of the Federation of German Unions, who contends that the most viable option consists in combining welfare with a tax-free mini-job.

While the initiative may induce some people to temporarily seek employment, it is likely that mini-jobs will prove an expensive and structurally venomous distortion of the labour market.

John Lennon in a Mini Cooper. Well how would you illustrate mini jobs? Photograph: Getty Images
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Obama's Hiroshima visit is a wake up call on the risks of nuclear weapons

The president's historic visit must lead to fresh efforts to rid our world of destructive missiles and safeguard our futures.

We now know more than ever the dangers of an accidental or deliberate detonation of a nuclear weapon. We also realise that there can be no adequate humanitarian response to such a nightmare scenario.

Malfunctions, mishaps, false alarms and misinterpreted information have nearly led to the intentional or accidental detonation of nuclear weapons on numerous occasions since 1945, according to testimonies by experts and former nuclear force officers. In the past two years alone, the organisation Global Zero has documented scores of “military incidents” involving nuclear weapon states and their allies, alongside the increasing risks stemming from cyberattacks.

Put this together with recent insight into the appalling long-term health impact of the Hiroshima and Nagasaki explosions themselves, and the sheer human cost of any future nuclear bomb blast, and you have a truly alarming picture.

We were in Hiroshima and Nagasaki last year, speaking to survivors, or hibakusha, as they are known. More than 70 years on, their lives, and the lives of countless people in Japan, are still overshadowed by these two watershed events in the history of modern warfare.

After the detonations, Red Cross staff struggled in unimaginable conditions to relieve the suffering caused by the atomic blasts. With hospitals reduced to rubble and ash and medical supplies contaminated, the provision of even basic health care was well nigh impossible.

But the nightmare is far from over even today.

Doctors at the Japanese Red Cross Society hospitals in Hiroshima and Nagasaki say that some two-thirds of the deaths among elderly hibakusha are from probably radiation-related cancers. And aside from the physical symptoms, the psychological trauma is still ever present.

No-one who visits Hiroshima’s Peace Memorial Museum, or who sees the continued suffering of thousands of elderly survivors, can be in any doubt of the catastrophic and irreversible effects of nuclear weapons. Nor could they in good conscience argue that these weapons somehow act as guarantors of global security or protectors of humanity as a whole.

Of course, the bombs in the arsenals of nuclear-armed States today are far more powerful and destructive. And modern research only makes the case against them stronger. Studies suggest that the use of nuclear weapons now even on a limited scale, would have disastrous and long-lasting consequences on human health, the environment, the climate, food production and socioeconomic development.

Health problems would span generations, with children of survivors facing significant risks from the genetic damage inflicted on their parents.

Seventy years after the dawn of the "nuclear age", there may be no effective or feasible means of assisting a substantial portion of survivors in the immediate wake of a nuclear detonation.

And make no mistake. The devastation of a future bomb will show no respect for national borders. It is likely to ravage societies far beyond its intended target country. Which makes the continued existence of nuclear weapons and the risk that entails a global concern.

Faced with these conclusions, you might imagine the international community would pull back from the brink of potential tragedy and take steps to eradicate these weapons.

Sadly, last year’s review conference of the Treaty of the Non-Proliferation of Nuclear Weapons, which had the opportunity to advance disarmament, failed to do so.

The International Red Cross and Red Crescent Movement has called on States to negotiate an international agreement to prohibit the use of and completely eliminate nuclear weapons within a binding timetable. We reiterate that call today. The political will to rid the world of this menace must urgently be found.

Until the last nuclear weapon is eliminated, there are essential steps which nuclear States can and must take now to diminish the danger of another Hiroshima and Nagasaki.

It is imperative that these States and their allies reduce the role of nuclear weapons in their military plans, doctrines and policies and cut the number of nuclear warheads on high alert status. The current modernization and proliferation of nuclear arsenals is leading us towards potential catastrophe.

The horror of Hiroshima and Nagasaki and the human suffering inflicted still holds powerful lessons. President Obama’s landmark visit on Friday will surely be a powerful reminder of the terrible destruction that nuclear weapons wreak.

We must act on this reminder.

To truly pay homage to those whose lives were lost or irrevocably altered by the Hiroshima and Nagasaki bombings, President Obama’s visit must galvanize the international community to move without delay towards a world free of nuclear weapons.

The fact that these weapons have not been used over the past 70 years does not guarantee a risk-free future for our children. Only the prohibition and elimination of nuclear weapons can do that.

Peter Maurer is President of the International Committee of the Red Cross. Tadateru Konoe is President of the International Federation of Red Cross and Red Crescent Societies and of the Japanese Red Cross Society.