UK: Firms Will Freeze Salaries to Pay for Pensions
13th October 2012
The Department for Work and Pensions set up its auto-enrolment scheme this month. The policy obliges companies to enrol all staff into work pensions and is designed to give up to 11?million employees a private pension for the first time.
Estimates from the department suggest that companies will look to save £2.6? billion of the annual cost of the pensions by capping wage rises for their staff.
History of a government program:
- “Wouldn’t it be great if everybody had X?”
- “Yeah, but they’re too stupid to do X on their own.”
- “No problem! We’ll just pass a law making their employer’s pay for it! What could go wrong?”
- “Well, if we have to pay for X, then we can’t pay for Y. Sorry.”
- “But that’s not what we intended!”
- “Well, then, don’t make us pay for X.”
- “I’ve got a better idea — we’ll pass another law making you pay for Y as well! Win-win!”
- Repeat until employers run out of money and all the ‘beneficiaries’ lose their jobs.
- Politicians retire to someplace sunny with generous benefits paid for by taxpayers.
- Jobless people eat their gruel while some old reactionary tells them the one about the Goose That Laid the Golden Eggs.
They never learn that when they vote for people to give them free stuff, the free stuff has to come from somewhere.
“The reality is that the money has to come from somewhere. You can’t just magic it.”