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Promote employment by abolishing minimum wage/unfair dismissal

Comment 16th July 2010

Abolish the National Minimum Wage.

Abolish employment protection legislation relating to unfair dismissal.

Each was introduced for the best possible motives but, as so often, has unintended consequences. 

Here the unintended consequences of  legislation designed to help individual workers results in discouraging:-

(i) employment in absolute terms ["I cannot employ Tom, as I do not want to pay as much as the NMW"] and

(ii) the free movement of labour ["I cannot dismiss incompetent Richard and employ the excellent Harriet , as Richard may sue me for unfair dismissal"]

I write as the owner of a small business. 

The business happens to be the practice of law, including employment law.

I act for plenty of other owners of small businesses, many of whom suffer from unfair dismissal employment law claims and all of whom would take on more staff if they knew they could pay staff what they wanted and hire and fire staff as needs dictated.

 

Why does this matter?

If you think that full employment is a good thing (and most people do), then ridding the country of artificial constraints on (i) employment and (ii) the free movement of labour is also a good thing.


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