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axi
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Athens Greece
Sep 1999
time: 07:33
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Okay, alot has been written in this thread and some points I adress here have been rebutted by others before me as well, but I wrote this by commenting as I read the thread.
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But as an economics major, you can see that if layoffs aren't made in an economic downturn, more companies will go out of business, causing job losses. Forcing companies to keep paying employees that are no longer profitable leads to fewer companies and fewer jobs. So yes, during an economic downturn it would make workers jobs less secure, but would also mean there are more jobs in the economy, meaning more people are actually in work |
What kind of companies are those that go out of business when business is bad for a couple of years? Don't they have savings from the profits they had earlier? No long term strategy?
If the type of economy you want is a bubble economy made of zero-commitment dot-coms and Mc-Jobs, then you have a point. But I don't know of any serious firm that would be willing to toss away half it's skilled and trusted workforce because of a bad year and then expect to do good when an economic upturn forces them to replace them.
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an economic downturn doesnt mean no new jobs are being created, at least over here. There are always some sectors, and firms, that are growing even during a downturn. |
True, but laws are made for all the companies indiscriminantly, so the general trend is what counts.
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Actually higher productivity makes recessions worse, because of the layoffs. |
Read my post more carefully. I wrote that increasing productivity with zero or negative production rate has to lead to layoffs (considering the contemporary business strategy, since of course one could always reduce working hours or have their employees sitting it out). However, high productivity is needed by an individual enterprise during a recession in order to maintain a competitive advantage and obtain an increasing part of the shrinking pie. But, since the employees will be unwilling, you can't have the productivity increase and thus you're doomed to having a shrinking business, with less employees and less production.
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The problem is once good times do come all the anti-reform types say the reforms aren't needed. |
And the first and foremost anti-reform types are inside the enterprises themselves. During good times they are the last people inside a firm that will risk changing things. Not to speak about their frivolous spending and mismanagement.
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Yes, there will be lay offs if reforms occur but the sooner reforms are completed the sooner companies will make profits (by shedding excess labor) and the sooner they will start hiring again. |
IMO you are forgetting the macroeconomic side of it. If the govt allows the layoffs, they decrease private spending which lets the economy tank even further.
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No. Productivity impovements do nothing for stability, and can actually cause a recession. |
What scale are you referring to? Company, sector, nation, worldwide? I was referring to company-wise productivity which is a good thing. Above that, you do have a point about stability but as for the recession, doesn't market demand have to be really inflexible for that to be true?
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For a short time, yes. But if you have them for a very long period of time, or forever, it would encourage people not to work. Sorry but communism doesn't work. |
If you force companies to pay for them (that's what severance pay is, in some way), then you would encourage them not to lay off. This is evident isn't it?
Okay, I could start flipping all your arguments inside out and they would still hold, but do things actually happen that way? There is no proof whatsoever of any significant amount of people staying in unemployment because they prefer it.
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The state can't create jobs that will benefit society (state jobs don't do anything to help). |
But how come the jobs that benefit society the most (doctors, schoolteachers, policemen, firemen, air traffic controllers) are provided by the state?
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Imagine that employers hire more in a recession so that producivity falls. |
Of course one could imagine a productivity increase/decrease that does not come from firing/hiring employees. Productivity increases can be brought by better organisation and implementation of newer technologies, both of which need the participation of the employees in order to succeed.
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State jobs require money and that requires either taxing the citizens or businesses. |
State jobs pay back the money they require by providing useful services.
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axi
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Athens Greece
Sep 1999
time: 07:33
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By the way....
(from reuters.com)
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By Andrea Hopkins
WASHINGTON (Reuters) - Initial U.S. jobless claims surged unexpectedly last week, taking claims to their highest level since late September, but analysts shrugged off the large jump as a holiday-related blip.
The number of Americans filing first-time claims for state unemployment insurance aid rose 43,000 to 364,000 in the week ended Jan. 1, up from a revised 321,000 in the previous week, the Labor Department said.
It was the largest one-week gain in nearly three years and far surpassed Wall Street expectations for a rise to 331,000 from the originally reported 326,000 in the prior week.
A Labor Department analyst said the rise was partly due to difficulties with seasonal adjustments for the holiday, and economists said the data did not alter their outlook for healthy hiring in December.
U.S. Treasury bond prices got a modest lift on the weaker-than-expected claims report, while the dollar shaved some gains but remained higher on the day. U.S. stocks opened higher as a slew of retailers reported holiday sales data, though the weak employment data caused some concern.
Analysts stressed the volatility of the jobless claims report, especially around the holidays.
"This week was the end of New Year's Eve and we always have trouble adjusting for holidays. This year Christmas was also on a weekend," said Anne Parker Mills, head of foreign exchange research at Brown Brothers Harriman in New York.
"If you look at the four-week moving average, the level remains consistent with comfortable gains in the jobs number. It does not do anything to change consensus expectations for a gain of 175,000 jobs tomorrow," Mills said, referring to the Labor Department's December employment report, due for release on Friday.
The closely watched four-week moving average of claims, which smooths weekly volatility, climbed to 333,000 from 332,250 in the prior week.
The department's employment report is expected to show 175,000 jobs were created last month after November's 112,000 gain. The unemployment rate is expected to be unchanged at 5.4 percent. |
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Drogue
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Omnipresent conscience
Oct 2002
time: 05:33
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quote:
Originally posted by axi
What kind of companies are those that go out of business when business is bad for a couple of years? Don't they have savings from the profits they had earlier? No long term strategy?
If the type of economy you want is a bubble economy made of zero-commitment dot-coms and Mc-Jobs, then you have a point. But I don't know of any serious firm that would be willing to toss away half it's skilled and trusted workforce because of a bad year and then expect to do good when an economic upturn forces them to replace them. |
If a market started not to make profit, most companies either downsize or change tact. By going out of business I don't mean bust, I mean they choose to cut down the loss making part until business takes up again. During a particularly cold winter, should an ice cream manufacuter keep all their workers, just so they have them in the summer when they're needed? Why should they have to pay them when they're not needed? It would be more efficient for them to not have workers during the winter, and rehire when they're needed. This type of seasonal employment - employment during the times when it's needed - is far more efficient, as the people can then be productive at something that is needed during the winter, like at a skiing resort, and at ice cream making in the summer. If you have laws that stop hiring and firing, then you can't do this, and that company would be far less efficient and they'd be fewer companies entering seasonal markets, as well as the lack of productivity.
If business is bad, it pays to downsize until it recovers somewhat. Why pay for people during times when they're not needed, when there's excess capacity?
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Kontiki
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Canada
Aug 2001
time: 00:33
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Communist beer goggles again, Kid? Your link in biz.ed is for output per worker. Look up productivity from the same site:
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Productivity - The efficiency with which the factors of production are used. It can be calculated by taking total output and dividing by the number of factors of production. The higher this figure, the more productive the factors of production are. |
In real economics, factors of production include more than human bodies.
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