to think there is a moral obligation on employers to do things efficiently from the start?

[StealthPolarBear]

I'm sorry if this is a bit jumbled, I'm still thinking it through. The spending cuts are hitting, and while people are being made redundant, many employers are also making 'efficiency savings' - not recruiting to vacant posts, changing the way they do things to make it cheaper. But all of this results in job losses down the line - maybe not to them, but to the new graduate who can't get a job, or to their supplier who suddenly finds demand reduced. I know their only legal obligations are to their employers, but if they could ahve been doing things efficiently to begin with, why weren't they? Why create a false demand in effect, only to whip it away?
And I'll ask again, why can't all taxpayers just pay a bit more tax? How much would it cost in real terms to make the 'savings' they need?

I agree that everyone should do everything the most efficient way from the start. But it's not always that simple. Processes tend to "evolve" and change over time and rather than scrapping everything and starting again, you tend to mould what you have. Also you do need "some" slack to cover for people being off, unexpected happenings etc.

My experience of this in the private sector is that people have been made redundant/taken voluntary redundancy and those that are left have just been left to pick up the parts of their jobs that they deem most important (as well as doing their existing job). I know as a result of VR, I am now doing 2 people's jobs so in reality doing neither to a very high standard.

A real-life example would be that daily monitoring of a computer system stops being done (because 99% of the time it is totally fine). And then everyone runs around like mad fixing it when it crashes. Is this efficiency?

Most people with busineeses try their best to be as efficient as possible as inefficiency harms profits. That doesn't mean they eliminate inefficiency though and so when times are tough and they have a long hard look across their business they can generally find some waste and inefficiency to eliminate.

interesting thoughts thanks.
I just feel that to prevent cutting jobs in their own organisation,, they make 'efficiency savings' but somewhere down the line, someone pays for that.

but you could argue that they created a job for that set length of time, which is better than no job at all.

It better for individual businesses and the economy as a whole for waste and inefficiency in both the private and public sectors to be eliminated.

But inefficiency is partly what caused the problem. Taxes were being spent on unnecessary Govt jobs. The Govt should have been encouraging private enterprise to export and bring money into this country. Instead we ended up with a ridiculous percentage being employed by the State (NHS is third biggest employer in the world!!!) and a cash outflow to China who now produce everything.

I don't think that more tax (so that the State can employ everyone, directly or indirectly) is the answer. The solution is more international trade (the only problem with this is that other States are coming to the same conclusion and we can't all be net exporters).

I run a business that used to employ 7 people. Everyone was busy and if i could have employed more people, I would have found work for them that would have added to profits.
(I ran out of space for bodies so I stuck at seven). back then, the inefficiency was that I didn't rent larger premises.
Then it was 6, then 5, then 3, then 2 and now just 1. So now the inefficiency is that everything is set up for 7 people (7 desks, 7 pcs, a seven person office etc requiring heating but I only have one person).

Demand has changed. People don't have money to spend on my company's product any more. So, its difficult even to make enough money to pay that one person's salary and the cost of keeping the office warm and the telephones working. I don't get a penny out of it.

And if taxes get any higher then I won't be able to have a business at all, because my company taxes will be higher, my employee's net salary will reduce and so she'll want a pay rise and my customers will have even less money for luxuries.

I am not complaining, just explaining that this is the reality of raising taxes and of being efficient in running a business.

No I agree purits, inefficiency was part of the problem. But my argument is that improving efficiency still results in job losses somewhere down the line. So improving efficiency may be the right thing to do but it shouldn't be sold as the victim free way iyswim.

but what about PAYE LA? Or would raising that just not go far enough alone?

I may be wrong but don't the countries that have the highest quality of life (I'm thinking Norway and Sweden) have very high taxes?

people look at their net take home pay. when it isn't enough, they look for new ways to make money. the traditional route is to ask for a pay rise.

and even if you just raise PAYE, then my potential customers will have even less money to spend, so demand will drop again.

Getting rid of waste is good for jobs in the long term though as it boosts economic performance and competitiveness.

lokaku - its good up to a point. after that you stop cutting unhealthy things and start having to choose between core business needs. If lots of firms are damaged in this way, then the economy suffers long term damage too.

I guess this is what the last labour govt were trying to do - a sort of keynesian economics - borrow to invest in the economy in the hope that it recovers (and can then repay the debt) before the decay becomes too deep.

"even if you just raise PAYE, then my potential customers will have even less money to spend, so demand will drop again."
good point

In reality the bext thing I could do right now is close down. i still know how to operate a business like mine so i could re-open in a year or two.
The reason i don't / haven't so far is just that its mine and I don't want to kill it so i keep hoping we can squeeze enough life into it to keep going until this is over. If i was more hard headed then it would close tomorrow.

however if enough people do the sensible thing for themselves and just give up then the country is in very serious trouble.

I agree with LublieAva. Private enterprise is not some static thing constant from year to year, it's fluid and has to respond with market conditions. Business expand in the good times and contract in the bad times. Plus, where there's any expenditure, there's always room to make savings..... look at your own household budget for comparison. Businesses going bust because they failed to trim costs are no good to anyone.

"But my argument is that improving efficiency still results in job losses somewhere down the line."

Short-term, maybe, but not long-term.
Gordon Brown started off by talking about balancing the books over an economic cycle. If he had done that - saved in the good times so he had money to spare in the bad times - then your policy might work (as a short-term fix). But he forgot about Prudence and spent all the money and then some more. Instead of having a nice cushion in the bank to see us through the hard times, we are horribly overdrawn.

I think Gordon Brown began to believe his own publicity - no more boom or bust. He actually thought that somehow he had managed to push the economy in a permanent slow upward growth. So he borrowed against future earnings and then had to borrow more when the crash came. Then he made it worse by not having the political confidence to trim back the spending he'd established when he had thought that we would have everlasting growth.
That's the mistake.. but only time will tell if the current attempt at a cure will work or actually bring on an even more serious decline.