It’s entry AND exit

By Bill Kaye-Blake 06/12/2013 1

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?

One Response to “It’s entry AND exit”

  • I can’t see where one of the numbers in the Stuff article has come from. It says 69,000 workers were employed with a 90 day trial, then says 27% of EMPLOYERS have fired someone. By calculating 27% of the 69,000 WORKERS they boldly assert that 18,000 workers have been fired. Nowhere in the article is it stated how many EMPLOYERS took on workers on a 90 day trial; what if it had been 10,000 then the number fired would be only 2,700! This vital fact is missing from the article, but then the old newspaper cliche holds, “never let facts get in the way of a good story”.