[lbo-talk] Executives promise to do worse in the future...

Tom Walker timework at telus.net
Mon Jun 20 20:57:48 PDT 2005


Michael Perelman wrote,


>Tom did not mention the obvious reason for overtime -- a way of getting
>around benefits. As pensions and medical benefits disappear, overtime
>might become a thing of the past ???

Believe me, I've mentioned it many, many times before. Perhaps the reason I didn't mention here is that I posted a newspaper column about work by Chris Ortiz. However, I don't think the benefits story at all conflicts with Ortiz's bad management story. In fact, the belief by employers that they are saving money by getting around benefits is itself an instance of bad management -- namely, they're confusing labor rates (what they pay the workers) with labor costs (total output divided by what they pay). Jefferey Pfeffer from the Stanford Graduate School of Business wrote about management's "Six Myths about Pay" in the Harvard Review of Business. The problem with "getting around benefits" is that it may just end up increasing per-worker benefit costs in the long run. Remember the benefit costs are QUASI-fixed, they are not carved in stone. Depression, burn-out, long-term disability all those affect the per-person benefit costs. Overtime will become a thing of the past when people start to realize all around that it doesn't pay. It's not a zero-sum game, it's lose-lose. Oh sure, there are ways that people can convince themselves that they're gaming the system but when the system becomes as thoroughly gamed as it is now it becomes pure pathology. And hey, the biggest scammer on OT doesn't pay benefits. Guess who?

The Sandwichman



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