Cost of Separation


Consider eating out.  Going to a restaurant and having dinner–lunch would work, breakfast too.  The way it works today is that a small short term “contract” is enacted.  You sit down and order, the joint brings you food and you have to pay for it.  This is understood to be a contract because if the place doesn’t bring you what they said they would, you have legal recourse.  Ina similar manner, should you choose not to pay, they have recourse as well; it’s illegal to d”dine -n dash”.

And this works well.  Based on this arrangement, I’m willing to try new places as often as I’m moved.  If something opens near me, I almost always try it.  Further, in a quest to find more and better restaurants in a specific genre of food, I’ll expand my radius and drive further to experiment.  However, what if it didn’t work this way.  What if the arrangement was different.

Suppose that if you wanted to try a new eatery you had to commit to eating there once a week for a year.  In short, by agreeing to eat there just once, you were legally bound to eat there 51 more times.

Do you think you would try more or fewer new restaurants?

It’s obvious.  We would all eat at fewer new restaurants.  Not only that, but we might find that as a result of such a restriction, fewer new restaurants would be opened in the first place.  In other words, the general overall “eating out” experience would be diminished.

The exact same is true of jobs.

As it becomes harder and harder for me separate from my labor, I’ll buy less and less of it.  It’s pure and simple.  It’s as true of labor as it is of restaurants as it is of cars.  And it’s being demonstrated around the world:

(Reuters) – Employers burned by the cost of laying off workers in the last crisis are uneasy about taking on permanent staff amid faltering economic growth putting pressure on the current workforce, a staffing industry executive said on Thursday.

Demand for temporary workers often acts as a leading indicator for overall economic growth, as firms hire flexible workers at the start of a recovery and cut staff ahead of a downturn.

Staffing firms Randstad, USG People and Manpower have warned of slowing jobs growth in Europe as the region’s debt crisis hammers consumer and business confidence.

“What has happened in this recession is that the psychology of hiring has completely changed,” said David Arkless, president of global corporate and government affairs at Manpower Group.

In the past firms hired temporary workers at the start of a recovery and gradually took on more permanent staff. But now, even in sectors and companies that are growing, employers are mindful of the huge costs of downsizing in the last recession and reluctant to take on permanent staff, he said.

“Employers are saying this could kill my company if I do the wrong kind of hiring now and it turns into a double dip recession,” said Arkless. “They are stretching the human element of their company to breaking point because they are so scared of hiring any more people right now.”

We all wanna make sure that our workers have it good.  However, when we mandate too much good, they get nothing.

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