Friday, June 17, 2016

90 day trials don't work

When National forced 90-day employment trials on us, it was on the promise that it would increase employment. Making people easier to sack, so they said, would encourage businesses to take risks in hiring.

Naturally, they lied:

The controversial trial period allowing workers to be easily sacked within their first 90 days on the job has failed to boost employment, research has found.

Treasury-funded research conducted by Motu found no statistically significant increasing in hiring by employers following the introduction of the 90-day trial periods in 2009.

Motu Fellow Isabelle Sin said the research used "data from every firm and every person in New Zealand" to assess the law changes' effect.

"The main effect of the policy was a decrease in dismissal costs for firms, while many employees faced increased uncertainty about their job security for three months after being hired," Sin said.

And that's unsurprising, really. Businesses hire people when it is profitable to do so, not because they can. And whether it is profitable to do so depends far more on the underlying economics of the business - whether they can move more widgets or whatever - than on whether they can fire people more easily. So all the law does is enable abuse by bad employers while increasing uncertainty among their employees. Its about encouraging servility and keeping wages down, not increasing employment.

We can add this to the long list of NeoLiberal policies which fail empirical testing. Tax cuts don't increase economic growth. Benefit sanctions don't incentivise work. Charter schools don't improve education outcomes. But those failures aren't just academic - they produce real human suffering and social consequences which need to be rectified. The expense of which is then used as "justification" for even more such destructive policies by the right.