Posted 4 years ago on Aug. 19, 2012, 12:25 a.m. EST by Misaki
This content is user submitted and not an official statement
Let's get this straight: smart people are to blame for high unemployment because they have too much confidence in the current economic system.
The weak labour markets over the past few decades have led to a decreased share of national income going to wages. If, say, the top 20% of income worked half as much, this would instantly eliminate our unemployment problems and give employees enough bargaining power to raise wages for the 150 million workers in the United States by 10%. One person doing this might not have much of an effect, but this is because they would be influencing prices for the entire nation.
If it takes 12 million new job openings to go from 8.3% unemployment to nothing, this means a single new job that is created by employees at a company working less raises everyone's wages by 10%/12,000,000, or 0.000000833%. But since it affects 150 million people, the total increase is 125% of the average wage rate, while the business that does this pays essentially the same rate for the work that is done.
Since flexible work policies attract talent, individual companies have every reason to support this too. The only question is how to get people to work less without changing payroll costs, but this has an easy solution.
Think of what happens when someone works less with the current systems of monthly salaries or hourly wages and overtime. If someone takes a day off with the salary system, they're generally expected to make up for it another time or else it forces someone else to do the extra work. With hourly wages, if someone can't work it might force the company to pay someone else overtime wages and a higher total cost of the work.
A better way is to pay a lower rate for extra amounts of work so people will agree to do it without feeling that the extra income is required, but also use the same lower rate for decreases in the amount of work done. If employee salaries accurately reflect their productivity, then these adjustments exactly balance out and someone won't feel bad if they need to, for example, leave work a few hours early to attend a parent-teacher conference or go to a doctor's appointment.
Neither should they feel bad if they delegate tasks to other people and focus on their key responsibilities, because the system would recognize that no special privilege is involved and fairly decrease their compensation to match the lower contribution to the company.
This would end up helping workers in low-wage countries around the world while harming countries that sell luxury goods to the rich, but this is a feature, not a bug. It would also mean fewer people on food stamps or other types of welfare in the United States, and therefore lower government deficits and inflation, but this is also intended even if some people think that deficits lead to higher growth.
Copy and share this message. We create the story.