There is an article in the Times today about how this is happening in Spain, and in Europe in general. The middle class is shrinking due to the lack of good jobs. It said that something like 90% of new jobs in Spain are temporary, including jobs which give a very reduced number of hours of work, mostly so the employers can avoid paying social taxes.
That clearly happens here also. Right after the recession many of my daughter’s friends, right out of college, could not find jobs for more than 30 hours a week, which then did not provide benefits.
Perhaps an answer to this is to force employers to be consistent in benefits, so if full time workers had $X allocated to benefits, part time workers - say 30 hours a week, had $3/4 X - which is how social security and Medicare works now. That would increase the cost of hiring temps and decrease the incentive.
The biggest employer based benefit is healthcare, and an employer covering 3/4ths of that for a part time worker means that the part time worker probably cannot afford to pay their share. And there is the fact that having a UHC would eliminate that entirely.
Then you just have little perks like PTO and maybe a retirement plan. I personally think that employers are just being assholes if they do not offer those to part time workers, as they don’t actually cost all that much, and unlike a healthcare plan, are proportional to hours worked.
Or, we could get rid of the regulations distorting the market in this way.
The problem with extending the benefit to part-time and temp workers is that these benefits can be really expensive to set up and administer. You really only want to do that for employees that will give you many, many hours of employment to amortize the cost. I get that you are kind of proposing this as a feature, to get them to stop hiring so many temporary and part-time workers. But perhaps it might be useful to be more introspective and say, “You know, we thought that regulation X wouldn’t have any effect on patterns of employment. Now that we see how much cost and effort companies are going to to avoid regulation X, we might want to reconsider that and fix it.”
Regulations are rules. New rules applied to complex systems act as shocks, and the system then recalculates everything and mutates to adapt. That’s the origin of the law of unintended consequences.
If I ask, “What happens if we pass a law prohibiting X”, some people would say, “You get the same thing, except with bad thing X eliminated.” The real answer is, “I have no idea, because I have no way of knowing how the system is going to adapt to the new law, and we can assume that the opponents of the law will react in some way we don’t yet know.” For example, putting a hard cap on CEO pay in cash had the unintended consequence of moving CEO compensation into stock and retirement benefits, and that happened just before a boom that saw many CEOs get far richer from their stocks than they ever would have from their ‘too high’ salaries. There is good evidence that Sarbanes-Oxley resulted in fewer companies going public, and that Obamacare slowed employment growth because companies refused to expand into the regime where they would be hit with penalties. And so it goes.
Other than healthcare, all other perks are based on hours worked. It does not take any more hours to amortized someone working 30 hours a week and earning .576 hours of vacation as it does for someone working 40 hours a week with .768 hours earned. If they are getting a matching 401k or IRA plan, then it is matching based on their contribution, based on their hours, so it costs the same proportionally to their hours.
The real cost of an employee is in training them, and that is why I personally try never to have part time employees, as I have to put as much investment into training into a part timer as I do into a full timer, and get much more benefit out of the the full timer.
Which is why you can never just let the old rules stand, because those too have unintended consequences that we need new rules to fix.
Which is why we have chosen lawmakers to go to the capitols of their respective states and nations to determine the best course for creating new rules that will have as few unintended consequences as they can, while addressing the unintended consequences of the last rules.
It sounds like a lot of work, and it is, but the cost of having a civilization is that it requires a bit of work to keep it all going.
Lots of companies have a menu of benefits, which give a certain pot of money to buy benefits, leaving you to get the rest. Part timers would get a pro-rated chunk. I discovered that the Netherlands does this when investigating if I could work part time before retiring.Not as good as full benefits, but better than getting nothing.
And of course UHC is superior.
Having a law allowing companies to not provide benefits below a certain number of hours distorts the market by encouraging the hiring of part time workers who work less than those hours.
I think the incremental cost of adding a part timer to a benefit program would be trivial compared to the additional cost of providing those benefits - which is something I mentioned. It is not like you are setting up a new program for them.
In any case, if you hire 3 40 hour per week workers rather than 4 30 hour a week workers you are reducing the number of workers and thus saving money - if this is indeed a big issue.
It is true that this would reduce employment - but it would also reduce underemployment and reduce the number of workers who need to take multiple part time jobs to make ends meet.
And I’d be fine with a waiver for part time workers like kids who are covered under their parents’ insurance.
If we had a healthcare system like yours the need for this kind of rule change would be much less.
Since it sounds like you are involved in this, do part time employees typically get 401K plans? Sounds unlikely to me. How about life insurance and disability insurance?
Or simply implement universal healthcare coverage, which is something that employers would probably be quite fine with in the long-term, even if they oppose the taxation now. Employers actually don’t like to offer healthcare benefits. They costs are only going in one direction and they’d much rather invest that money in dividends or investment. I know you’re probably going to reply that we should have fewer healthcare regulations, but those regulations are there because of some kind of problem the market wasn’t fixing in the first place. It’s just easier - and more economical - to copy an idea that has generally worked well in other industrialized societies.
When I was technically a part-timer at one of my previous jobs, I got a 401K. You had to work over a certain number of hours but you could work less than 30, as I recall.
Well, I don’t have a 401k, but rather a SIMPLE IRA, as I’m not big enough to do a 401k, but yeah, anyone who wants to contribute can contribute. It doesn’t cost me anything more to have a 20 hour employee on it than a 40 hour employee, either way, I’m matching part of their contribution. I pay a flat fee for maintaining the plan, no matter the number of people on it, and I get a tax deduction based on what I match, so, in theory, if I have enough people on it, it should actually save me money.
Life insurance I do not offer to anyone, and if you want to count Aflac as disability insurance, I “offer” that to anyone, but it doesn’t cost me anything to do(in fact, I get to hold onto their money for a bit, between the time of payroll deductions and the time that I pay the Aflac invoice, so having more people on the plan actually makes me slightly more profitable).
Life insurance is actually fairly cheap, but the main reason that companies offer that is not for you, but for them. If they give you a $10,000 policy, they will actually have a similar policy for themselves. It makes sense that if you die on them, they are out the money that they spend on training and the labor they were expecting. Life insurance is to protect the company more than it is you, and it is offered to you, because they cannot just take out a life insurance policy for you without your permission.
Everyone also gets vacation pay, at the “excellent” accrual rate of 1 week a year (0.0192 hours per hour). Obviously, a full timer builds up more vacation than a part timer, but proportionally, they are the same.
Healthcare is the biggest fixed cost. If you provide it to someone, it costs the same if they work 5 hours or 50.
Some employers like to be able to offer healthcare benefits, because it prevents their employees from leaving. A large part of why people stay in jobs that they hate is because they are terrified of losing their health insurance, and a large part of the reason it is hard for small businesses like mine to get quality employees is because they want health insurance, and I cannot offer it.
IMHO, A UHC would increase mobility of the workforce, and encourage more investment in small businesses.
I don’t work for Wal-Mart, but another big box store that does have its own drivers. A rookie simply can’t get a job with them, there is a minimal requirement for long-haul experience. The reason is simple - they want to hire people with a history of being reliable and safe. Once a trucker does get a job with my company they get a stable route (or routes), slightly higher pay and benefits, and a bit more stability in their lives. They aren’t home every night but they have a pretty good idea of how often and when they’ll be home. Yes, that reduces turnover considerably, but you have to get through the initial churning mess of starting a career in trucking before you apply for the job.
I’ve known a few guys who went into trucking. There are a lot of nasty companies out there pushing their drivers to do shady things to make profits, there is an incredible amount of stress, some places jerk their drivers around with rapidly changing schedules that alternate between overwork (leaving them exhausted, which is very bad for a driver and the safety of those around him) and being stranded in a strange town for days before getting assigned a new route, lousy equipment, and so on. Which, as much as wages, affects turnover. A new trucker is most likely going to be dealing with that shit until he gains sufficient experience to apply to a company with better circumstances that demands some experience and a track record, or something like an accident (or disgust at the conditions) takes him out of the profession.
If you’re 22-25 with no family or responsibilities and you can more or less live out of a truck for a year or three it’s doable. If you’re in your 40’s and 50’s - which is a segment that’s looking to retrain and other jobs are made obsolete - with responsibilities like a family or something that is a LOT less practical (although some do it). But barriers to the career aren’t just money or the future of AI trucking, it’s also the initial few years of unrelenting travel, stress, and shit required before you can get your foot in the door at a company that will treat you decently and give you a schedule enabling you to do more than just sleep and drive a truck for months at a time.
And bigger employers could still offer other kinds of incentives - or simply reinvest their money somehow. I don’t think most companies would miss being in the position of offering health insurance coverage that inevitably costs more as time goes on.
I understand. I guess where I’m going is that since most of the productivity gains seem to be done via a mechanism of automating away entire strata of positions, and thereby streamlining things (the example of having the field people enter their data on iPads rather than paper forms is one I was personally involved in), I can see why employers might not be quite so eager to share that wealth with people whose jobs didn’t materially change.
It seems like in the past, most productivity increases were also coupled with job changes- stuff like kaizen, etc… so it made some kind of sense to the management to increase wages in line with that stuff. Not so with stuff like the example I mentioned above- they basically sped things up, made it more accurate, and shit-canned 40 people all in one fell stroke, for the cost of a few dozen iPads and the cost to develop a solution. (less than probably 2-3 of those workers’ annual wages). I can imagine management’s bafflement at a suggestion that they share some of that wealth with the rest of us- “But your jobs didn’t change- YOU aren’t more productive.”
What I want to know is what happened around 1973 that started the wage/productivity gap. Basically productivity has followed the same line, while starting in about 1973, the relative wage increase flattened out. This isn’t anything new- it’s just that the gap is very wide now and its effects are starting to be felt more and more acutely than before.
Ithasn’t. The myth comes from three mistakes.
First the wages statistics exclude supervisory jobs, government jobs, and people who receive bonuses. At the same time the productivity numbers are for the entire economy.
Secondly, the wage and productivity numbers are using different deflators. Wages are deflated using the Consumer Price Index and productivity is deflated using the Implicit Price Deflator. The CPI showed 21% more inflation than the IPD since 1973.
Lastly,it ignores the self employed. The percentage of people self employed has gone up since 1973 and all of their income is excluded from the wage statistic but their productivity is included in the productivity statistic.