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December 9, 2009
There is More to Life than Economics, no Matter what the Papers Say
I came across an interesting Associated Press story (via ABC News) involving Taco, a local manufacturing company. Taco is using a strategy calls that the article calls "work-sharing" to avoid layoffs during the current economic downturn.
The piece that makes the article really interesting is the AP reporters' unrealistically stark explanation of Taco's management's reasoning behind work-sharing…
Taco wanted to avoid layoffs. If it cut workers who average nearly 18 years on the job, it couldn't be certain of getting them back when business picked up. Training new workers costs time and money. Instead, the company tried a strategy called work-sharing to spread the pain and preserve jobs.It is an odd choice to cite avoiding training costs as the only factor going through Taco's management's minds. Instead, the manufacturer's leadership seems pretty clearly to be combining a realistic view of economics with an understanding that the long-run success of any human organization depends on treating people as more than cogs of a machine, and on everyone working together, to find ways to help one another out through a time of trouble.
This realization is probably a major reason why Taco has been one of the few manufacturers to have survived in Rhode Island. Rhode Island's government should try and draw a lesson or two from them, starting with an acknowledgment of economic reality and of the importance of giving people the flexibility they need to get ahead in new and creative ways.
UPDATE:
Commenter "John" points out that the work-share implemented by Taco is actually part of the stimulus...
It sounds great, but it is part of the Stimulus program. The workers are paid "partial" unemployment benefits while they work less hours. So I guess you could say it was really the government's good idea...if it retains it's status as a good idea now that is attributable to the government.At least at the link provided by John, the Government is able to realize that avoiding layoffs is more than a matter of reducing retraining costs...
In addition to sparing employers the potential lost of its existing workforce, WorkShare also spares a company's employees the financial and emotional hardship associated with a layoff situation.So is this a good use of stimulus funds, letting people bridge an economic downturn with minimal disruption?
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It sounds great, but it is part of the Stimulus program. The workers are paid "partial" unemployment benefits while they work less hours. So I guess you could say it was really the government's good idea...if it retains it's status as a good idea now that is attributable to the government.
http://www.dlt.ri.gov/ui/WS.htm
My wife's employer did the same thing.
Posted by: John at December 9, 2009 1:41 PMWell, the idea of changing work roles around in response to changing economic situation when the opportunity exists, rather than going right to layoffs, is still a good one, for both economic and non-economic reasons.
However, knowing that there's an outside infusion of cash not related to the company's output needed to make it work does have to make me a little more skeptical of the this particular implementation.
I've noted your comment in the main post.
Posted by: Andrew at December 9, 2009 2:20 PMMore evidence that AP reporters work there because they aren't smart enough get into the Army and go to Iraq.
I met John Hazen White Sr. about 12 years ago and visited Taco several times. From my 30 years as a banker, having visited hundreds of companies, I can say Taco is one of the most employee-focused, benevolent businesses in America. They do the right thing regardless of "stimulus" subsidies. It's a matter of values and principles. It's the definition of good management.
Kudos to John White and his team (meaning all the fine people at Taco).
Posted by: BobN at December 9, 2009 3:48 PMMore evidence that AP reporters work there because they aren't smart enough get into the Army and go to Iraq.
Considering how much of the Projo's news coverage is outsourced to the AP, it doesn't give you much hope for the idea of the informed voter.
Posted by: EMT at December 9, 2009 4:13 PMWhile I applaud the Workshare concept -- for once government does something creative and useful -- a side-impact of this is that reported unemployment rates are underreported, since those cut-back are not "unemployed."
Posted by: Ragin' Rhode Islander at December 9, 2009 4:47 PMThat's true, Ragin, but there are so many weaknesses and room for fudging in government statistics anyway that I suspect the workshare effect is not material.
There are also a great many small business entrepreneurs who are "self-employed", who are not eligible to apply for unemployment benefits, and they do not appear in the statistics either. A great many of them are struggling or have failed in the past year. I am one of the struggling ones.
Posted by: BobN at December 9, 2009 6:12 PM--"I am one of the struggling ones."
Roger that and ditto that!
Posted by: Ragin' Rhode Islander at December 9, 2009 10:26 PMWork share has been around for a while! Before any Stimulas money was paid out! The company I work for put us on workshare in early 2008 for 12 weeks (I believe it was?) It prolonged a layoff for many people that ended up happening anyway as the economy went down the toilet.
Posted by: John at December 10, 2009 10:55 AMI've been with this company over 30 years and "back when" (late 70's) we were put on furlogh days for much of the year. The comapny kept the skilled employees and we kept our jobs for as long as we could, agai, before there was no choice but to lay off a number of people.