Employment, Wages, Unemployment

I've argued against the "union-busting" that Gov. Walker and the Tea Party movement pushed through in Wisconsin.  My problem was that the legislation was not broad enough.  Not just unions should be targeted.  Executives and CEOs should be too.  If there is a pay-cut in government or in a company, it should be across the board, with executives leading the way.

Walker may not have "won" in the long run but he had a point. 

The point that he had is the need to enable companies to reduce salaries/wages when the company/economy is going downhill.

I think this might be done by enacting a law that permits companies to make across the board cuts in the pay of all employees, including all executives and board members, despite any contracts to the contrary, when the profitability of the company has gone down to zero.

Some years ago, I started thinking about a new way of paying employees.  A base wage that eould not change, with bonuses for individual productivity, for team productivity, and in relation to the profitability of the company.  Pay by formula.   When hard times strike, employee pay is automaticaly reduced.  The employee has to tighten his or her belt, but still has a job.

More of that would end the need for unemployment compensation.

As it is, employment/unemployment and compensation is very unfair.  Production line employees get laid off when misfortunes hit.  Engineers get laid-off with a nice nest egg in severance pay.   And too often, the CEO gets a bonus or a new CEO is hired for a record amount. This is crazy.  These companies are run with a total disregard to employee loyalty, and a blatant in-your-face statement about the differences between executives and line employees.  There can be no loyalty in such a company.  No teamwork.

You have to treat everybody alike or at least similarly.  Except that cuts should be higher in the executive suite.

I've never believed in lay-offs. Permanent employees ought to be ... permanent. Not seasonal like migrant farm workers. Not as a pool that can be discarded or picked up as needed.   But being permanent means too that they share in the fortunes and misfortunes of the company.   That pay cuts occur immediately and automatically, according to an objective formula.  It means employees have to realize that income will vary, that there are no automatic raises or cost-of-living increases.

Which brings up the unemployment picture.

With the 2012 election coming, some are saying that something has to be done about unemployment, that it is a problem that must be fixed. That someone in charge, like the president, needs to wave a magic wand and cure things. To a large extent they are wrong, pandering to misinformed popular opinion.

Many of those jobs lost will not be replaced. The companies that survived are leaner and meaner, doing more now with fewer employees. Less deadwood, fewer chair warmers and middle managers, more automation. Those jobs will not be coming back.

Then too, some companies and industries are gone.

Jobs continue to be exported. There is one area where the president and Congress can try to make a difference, by providing incentives for American companies to stay in America and disincentives (penalties) for leaving. Lower corporate taxes, for example, with high penalties for companies that attempt to fictionally move elsewhere.

International business competition is becoming a more level playing field. More competition from China, India and Brazil means some U.S. companies will be losing market share or going out of business, a trend that has existed for 50 years and will continue. In the very long run, Americans will be no more wealthy than folks in half the nations of the world. This is a statistical principle called "regression to the mean."

More and more, U.S. income and lifestyle will regress to the mean of the world as a whole. That is unavoidable.

All of which means that a lot of the unemployed will not be getting an equivalent of their old job back. They are going to have to settle for retraining, for a less expensive way of living. To find new goals and interests. There are no magic wands.

Any politician who doesn't tell us this is lying through his/her teeth.

Copyright 2011 by El Alacran and The Refracted Image