The Corner

Re: Work Sharing

Readers make several points in response to this post. The emails overlap, so I’ll summarize:

1) A mid-level IT manager writes, “In the real world, reducing X hours worked to 0.75X, but reducing pay to 0.95X, is called a RAISE.  It’s a payout of more compensation per unit of work.  Absent a commensurate increase in output, this is a net economic loser – a permanent reset of the pay and productivity expectations of that workforce.  What happens, pray tell, when le bon temps roule again – are good workers going to accept a 25% increase in work hours for a 5% raise?  Or will they take advantage of scarcity to make those productivity reductions permanent? (Based on human nature over the last, oh, 5,000 years, I’m going with option 2).”

2) Getting rid of an employee lets the company save on wages and benefits; cutting hours will not lead to a proportional reduction in benefits.

3) Work sharing would prevent the firm from optimizing its productivity: It is, after all, being bribed to handle the reduction of its labor needs in a way it would not otherwise handle it. It might also demoralize the most productive workers, who would be taking cuts to prevent the layoff of less productive ones. Writes one reader: “People doing jobs are seldom interchangeable and it is hard enough to find one right person for any given job. The task of finding two, who can then work together as efficiently as one, may impose cost, coordination, and accountability problems that make work sharing more expensive in a lot of jobs, and completely unworkable in others. Would someone else be able to finish your columns just as well as you could?” (Don’t answer that!)

4) Its potential is limited. In industries where the work is not going to come back after the recession, work sharing would just retard the adjustment the economy needs to make.

Update: James Sherk of the Heritage Foundation is also opposed.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.


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