SUBJECT:
EMPLOYMENT INCOME CAPP
PURPOSE:
This briefing note is a recommendation for changes in policy pertaining
to employment income.
ISSUE:
There is not enough regulation for the limitations on income gained from
employment.
Background:
The purpose of employment is primarily to gain
cash capital. Cash capital can be defined
as surplus monies or liquid assets which can be used for expenditures. Having cash capital allows people to make
their own business, invest or make personal expenses. The objective of investment is really to
reduce the strain or effort people use to generate income. Being financially literate is going to become
an imperative skill in the next few years.
Having a business on the other hand, allows individuals to manage their
own operation. By managing such
operation. People can ascertain self sufficiency. This is the common factor here whether one
has employment, investments or is in business.
These people relying on employment have been socialized to the point
that perhaps they feel they do not have other options. This is not the case, citizens in Canada have
a plethora of options available to them.
The reason people have been relying on employment as their main source
of income is because the value that it is placed in it with consideration of
the historical class conflict between the bourgeoisie and the proletariat. Unions have worked hard to protect the perceived
value of employment and this has transcended cultural boundaries such that it has
expanded globally from the UK. Since the
industrial revolution, it was discovered that those selling their labor were
being exploited. This caused massive
backlash causing unions to place great value on employment. Even before this however, during the French
Revolution, the proletariat caused massive uproar resulting from unfair living
conditions. In Japan however, there was
a massive revolt against the Shogun for rationing and prioritizing people higher
in the social hierarchy. These
tribulations have caused the world to place a high value on employment so much
so that it became peoples go to for their income. In extreme cases, it is their only source of
income. As it becomes evident we have encountered so far the labor economy, the employment economy and the business economy. Now that Canada has ensured equity for its citizens, it is now time to bring about the investment economy.
Secondly, employment is used to retain competency. Further, having multiple jobs allows employees
to implement refined techniques which essentially build skill. Various tasks are accomplished in different
ways as one enters different work sites.
Employers cater these tasks accordingly to their operation as they seek
to improve efficiency. By improving
efficiency money can be saved. Increased
output is also the result of increasing efficiency. One
such way increased efficiency can also be achieved is through technology. In short, through having a job, a person can
continue to maintain their professional competency.
Automation is a problem the community will
face in the next few years. Artificial
intelligence and automation lack the ability to do three things which humans
have the upper hand. Firstly, they lack
creativity. They are therefore unable to
or have difficulty doing things that are done that require art or design etc.
This can cause people to find jobs in these sectors. Second
complex perceptual thinking. Which means
that these machines lack the ability to perceive events, a trait in humans that
are highly developed. Third and lastly
these machines lack the ability to be able to display complex emotions. Feelings such as empathy cannot be replicated
therefore these machines are not yet capable of sharing feelings as empathy or
even interpret emotion. As employers seek
to increase efficiency in the work place, they will be more reliant on
automation to replace their employees. There
was a study wherein 702 occupations were assessed for how they are affected by
automation, it found that 47% of the workforce will be subject to computerization.
Considerations:
There is a major problem in our
contemporary society, where new graduates are unable to find employment. This is going to become a huge issue as more
and more students graduate. Statistics show
however that the certain universities have been experiencing reduced
matriculation. Matriculation is the
process whereby prospective students apply for college and university. College enrollment in the US has decreased for
the eighth consecutive year according to the National Student Clearinghouse
Research Center. This could very well benefit
graduates. Further according to
Georgetown University Center, they predicted that by 2020, 63% of all jobs
would need some education beyond high school education. According to the latest data however, 70% of
workers were in such jobs as of 2018. In
2010 it was 59%. This could also benefit
hopeful graduates. But what is alarming
is that 41% of recent college grads work in jobs not requiring a degree while
33.8% of all college grads are underemployed.
In December 2019 the unemployment rate for people aged 22 to 27 with a bachelor’s
degree was higher at 3.9% exceeding the unemployment rate for all workers aged
16 to 65 at 3.6% according to data obtained from the Federal Reserve Bank. What is evident here is that these grads have
limited opportunity as they have not found jobs related to their educational
accomplishments. Along with automation
and reduced employment opportunities for graduates we can very well see a bleak
future for these grads. We therefore propose,
the government intervene in that these grads job share with senior employees where
then employment income capps are then placed which will determine when these
graduates will assume roles for the remainder of the year. The main stakeholders for this matter are the
government, employers and employees.
Options:
Option 1:
Job sharing and promote moonlighting.
This is not feasible. Massive uproar would occur. Further, amendments to the Labor Standards
Act would be difficult to pass in parliament.
However, the government may have no other option as automation is likely
to decimate the job market. Further,
this would cause new grads to become more likely unemployed. Thus, it becomes necessary to safeguard employment
by implementing job sharing programs. Through
job sharing, skills found in certain work places can be refined causing greater
efficiency therefore benefiting employers.
Moon lighting is a concept where people work multiple jobs. Through moonlighting employees can have the
opportunity to observe different styles of employment related to their
profession. By sharing skills standards
can be increased. Through job sharing
and moon lighting, the government ensures that citizens especially those having
a difficult time finding employment and with consideration of their ascertained
educational achievement, receive equity. This option is also very considerate
of equality as people are to be treated in the same manner as they go out into
the work force. This is a very
sustainable option as it is projected that automation is going to shrink the
available job market. By adding job
sharing and moonlighting, employers can share transferable skills through their
employees and in turn this would increase efficiency.
Option 2:
Capp on employment income on primary job while encouraging secondary jobs
and other revenue generating activity.
Through mandating job sharing and placing income
capps only on employment this could allow people to invest or start their own
business. By investing private
industries can be given the cash reserves to innovate causing excitement in
industry. Through starting businesses, a
more competitive landscape could be found which would result in the generating
of new ideas and concepts. However,
implementing income capps could be seen as an incremental step to limiting the
wealth of people and it is likely that people would severely push back. The government must therefore, create
legislation to justify this and guarantee that capps wont be implemented for
other channels of income such in investment or business. Further legislation should reflect the
limitation of income on the primary jobs and if the second job reaches said
cap, another job must then be considered and etc. Medical workers are a main source of
knowledge on the matter of multiple jobs.
These people gain experience from one place and use it in others. These transferable skills could greatly benefit
employees and employers as they find ways to improve the work place. This option is the most equitable solution as
it increases the ability for unemployed people to find jobs via job sharing
programs. This also ensures that people
can generate income through alternate avenues as is the case with investment
and or business. People wont be limited
to the limiting belief that their only option is employment. By selecting this option, people can rest
assured that they are being treated equally. Each person will be taxed the same
amounts and as according to the legislation.
The government should retain the current method of taxation of these
income via administering it as according to the Income Tax Act. By not changing the brackets, the government
can assure people that they are looking at the best interest of the country
with consideration of their citizens.
This is a very sustainable option as job sharing programs would ensure
that people would be employed and also taxed accordingly.
Option 3:
Education on financial literacy.
In order to implement employment income
capps and job sharing/ moon lighting programs, it is first necessary to
socialize people. Socializing people
requires a lot of patience. It is a long
tedious process that takes time.
Administering a financial course in high school programs could be a good
start. However, those not in high school
should also be educated. Employers or
banks should have programs to educate people about financial literacy. These employers should get tax breaks from
the government. This option is the
practical first step and it is going to make or break people. By socializing people about financial
literacy it could be the determining point of whether he or she experiences a
life of comfort or dispair. It then
becomes important to administer this accordingly. This option is very equitable as it will
allow the citizen to generate income other than from employment. This is also considerate of equality as citizens
would be receiving the course as according to government provisions. Lastly, this option is very sustainable as it
serves not only to protect the people, but the industry and the country
thereafter.
Option 4:
Status quo and research.
This option is the most feasible but it
really does a disservice to the citizen and the country. By doing nothing, it is likely that automation
would continue to decimate employment.
This would result in an inefficient economy. This would also bring about a workforce that
is not prepared to be resilient in the face of hardship. Transferable skills wont be shared therefore employers
wont learn from one another. This option
is not very equitable as people will continue to find difficulty ascertaining
employment. Although not equitable, this
option still at least treats individuals with equality as the methods of handling
employment will remain unchanged.
Recommendation:
Option three is recommended.
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