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April 7, 2010

Ramesh Ponnuru asks the following over at the Corner:  The subject is work sharing, and a government kickback to cover some of the wage loss by workers as a result.  Go read the article below for details.

It’s an interesting idea. Has anyone seen intelligent criticism of it?

Intelligent?  Well, probably not, but here are a couple criticisms…

There are many obvious and hidden costs in terms of employing a person.  In a standard office environment, cutting work hours back a small amount wouldn’t (for instance) alleviate the need for the person to have a desk, computer, phone, etc.  Less hours for people spreading more work would probably still mean the need for full office space, HR support, basic bookkeeping, etc.  Let’s also not forget that healthcare and any profit-sharing or retirement benefits would still have to be maintained.  So cutting wages does very little to cut the burden.

 I also like the comment that the government would kick in some cash to support the workplace.  Where would that cash come from?  The workers.  So it’s not a cut, then a kickback.  It’s a cut, a kickback, and then a cut via additional taxes to pay.  You can spread that across a vast pool of employed, but that still creates overhead, taxes, and does not really land in the pockets of the workers.  I don’t see how that gets productive, and it certainly impacts more than the affected workers, since everyone has to pay the tax.  This would be a burden on companies that don’t have to make the cuts as well as ones that do. 

Finally, take into account the productivity losses of sharing tasks between people.  There’s always loss of production in a handoff of a task.  So spreading the work across people might save money, but it might cost the company money in time and usefulness of the conclusion… I’m not there.

Work sharing isn’t a bad option in some areas where you have redundancy of skills and expertise, and the key is to keep line workers or single-skill employees in place.  But the more specialized industry and/or office jobs wouldn’t likely see any benefit.  I believe a move like this would be rife with hazardous unintended consequenes… so when do you think the administration will propose it?

Updated 4/8:  Ramesh summarizes the responses, and James Sherk at Heritage takes this on as well.  I like this part:

The mistake comes from believing that there is a fixed amount of work in the economy to be divided among workers. If that were true, then cutting work hours would create more jobs. But the amount of work that can be done in the economy is virtually unlimited. Why? Because human desires are unlimited. Samuel Gompers, the founder of the American Federation of Labor, was once asked what his members wanted. He could answer in just one word: “More.”

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