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"A company might reduce the hours of all workers to avert laying off an employee." These kind of politics are probably the main reason, why Germany is currentl

by yaix 15y ago

"A company might reduce the hours of all workers to avert laying off an employee." These kind of politics are probably the main reason, why Germany is currently relatively well economically. They permit to avoid large overhead costs in economically uncertain/fluctuating times. Why companies do that? Large companies in Germany are run 50% by the unions and only 50% by the stockholders. If you want to lay of people, the union representatives have to agree. That avoids that the CEO takes simple shortcuts like mass layoff to save some money shortterm for the upcoming quarterly report. They are forced to considder the wellbeing of the employees as well, because the employees' union partially run the business.

lispm 15y ago
Germany has this instrument for decades. In this case it was easy to see. The economic crisis before had seen a more layoffs. So companies knew the effect and they wanted to avoid it. They wanted to keep their workforce to avoid the cost of rehiring well trained people, to be able to take advantage from the recovery as early as possible, etc. It was not just the Unions. Even the conservative government also was part of it.
- yaix 15y ago
  Never said "just the unions". But remember the VW deal in the 90s about the 4 day workweek, to avoid layoffs as VW cut down production back then? That was the unions, and that was a milestone to show how it could be done. So when this crisis came, there was some good experience with temporarily reduced work hours.
  - lispm 15y ago
    Correct. Plus their was the bad experience of not doing enough during the last crisis.
CWuestefeld 15y ago
They are forced to considder the wellbeing of the employees as well A practical example of this is the Cologne-based Toyota F1 racing team [1] of a few years back. Despite having one of the largest budgets and workforces in the sport, the team was never successful at all, never having won a race. Common wisdom among racing pundits was that the workforce was inefficient, and just not cut out to be a top-rank F1 team. But the labor practices of Germany prevented Toyota from getting rid of the deadwood to build up a better-performing team. The end result was that Toyota threw in the towel and got out of the sport altogether. Of course, other examples in the OP show different results. But the absolute meritocracy of top-tier sports is hard to argue against. I would submit that it's a purer example (although "anecdote" isn't the singular of "data"), since the intrigues of international politics and voodoo of macro economics may obscure much of the truth. [1] http://en.wikipedia.org/wiki/Toyota_Racing http://en.wikipedia.org/wiki/Toyota_Racing
- gte910h 15y ago
  Sports aren't a meritocracy. They (generally) aren't equally funded, and often compete on money. They outsizingly reward hits over simple strong performance.
  - CWuestefeld 15y ago
    But funding comes from performance -- it's a feedback loop. The teams that perform the best get greater funding. That is a meritocracy. In any case, my point would still stand. The Toyota F1 team was understood to be one of the top-funded teams, but was unable to compete at a level commensurate with their budget.
    - gte910h 15y ago
      Funding comes from many things in sports. Not just performance, but home town spirit, other business endeavors, etc.
redsparrow 15y ago
Unions don't always choose what is best for everyone. My aunt and uncle were working at a unionized automotive parts factory here in Canada and the factory needed to reduce payroll due to lost sales. They gave the union a choice of either cutting everyone's hours (and thus wages) by 10% or of laying off 10% of the workforce. When put to a vote, the choice was to lay off the 10%. This happens because when each union member votes, they know if they are in the 10% or not as layoffs are based on seniority. It wasn't some CEO taking a shortcut, it was the individual co-workers looking out for their own (perceived) best interests. (I don't remember what the actual percentage was, but it was in the 10-20 range.)
- yaix 15y ago
  "Unions don't always choose what is best for everyone." Of course not, it depends highly on the ability of members of a group to colaborate. And that ability is on decline in the US since the mid-60s according to an extensive study in: (Book) Robert Putnam, "Bowling Alone". In Germany they would usually vote against a layoff because they will not only think of themselves but of their co-workers and their families.

by yaix 15y ago

lispm 15y ago

Germany has this instrument for decades. In this case it was easy to see. The economic crisis before had seen a more layoffs. So companies knew the effect and they wanted to avoid it. They wanted to keep their workforce to avoid the cost of rehiring well trained people, to be able to take advantage from the recovery as early as possible, etc. It was not just the Unions. Even the conservative government also was part of it.

yaix 15y ago
Never said "just the unions". But remember the VW deal in the 90s about the 4 day workweek, to avoid layoffs as VW cut down production back then? That was the unions, and that was a milestone to show how it could be done. So when this crisis came, there was some good experience with temporarily reduced work hours.
- lispm 15y ago
  Correct. Plus their was the bad experience of not doing enough during the last crisis.

CWuestefeld 15y ago

They are forced to considder the wellbeing of the employees as well A practical example of this is the Cologne-based Toyota F1 racing team [1] of a few years back. Despite having one of the largest budgets and workforces in the sport, the team was never successful at all, never having won a race. Common wisdom among racing pundits was that the workforce was inefficient, and just not cut out to be a top-rank F1 team. But the labor practices of Germany prevented Toyota from getting rid of the deadwood to build up a better-performing team. The end result was that Toyota threw in the towel and got out of the sport altogether. Of course, other examples in the OP show different results. But the absolute meritocracy of top-tier sports is hard to argue against. I would submit that it's a purer example (although "anecdote" isn't the singular of "data"), since the intrigues of international politics and voodoo of macro economics may obscure much of the truth. [1] http://en.wikipedia.org/wiki/Toyota_Racing http://en.wikipedia.org/wiki/Toyota_Racing

gte910h 15y ago
Sports aren't a meritocracy. They (generally) aren't equally funded, and often compete on money. They outsizingly reward hits over simple strong performance.
- CWuestefeld 15y ago
  But funding comes from performance -- it's a feedback loop. The teams that perform the best get greater funding. That is a meritocracy. In any case, my point would still stand. The Toyota F1 team was understood to be one of the top-funded teams, but was unable to compete at a level commensurate with their budget.
  - gte910h 15y ago
    Funding comes from many things in sports. Not just performance, but home town spirit, other business endeavors, etc.

redsparrow 15y ago

Unions don't always choose what is best for everyone. My aunt and uncle were working at a unionized automotive parts factory here in Canada and the factory needed to reduce payroll due to lost sales. They gave the union a choice of either cutting everyone's hours (and thus wages) by 10% or of laying off 10% of the workforce. When put to a vote, the choice was to lay off the 10%. This happens because when each union member votes, they know if they are in the 10% or not as layoffs are based on seniority. It wasn't some CEO taking a shortcut, it was the individual co-workers looking out for their own (perceived) best interests. (I don't remember what the actual percentage was, but it was in the 10-20 range.)

yaix 15y ago
"Unions don't always choose what is best for everyone." Of course not, it depends highly on the ability of members of a group to colaborate. And that ability is on decline in the US since the mid-60s according to an extensive study in: (Book) Robert Putnam, "Bowling Alone". In Germany they would usually vote against a layoff because they will not only think of themselves but of their co-workers and their families.