3 ms·

>We live in something very close to a free market. Hiring and firing is more difficult than you imagine, I think, due to transaction costs and emotional/social

>We live in something very close to a free market. Hiring and firing is more difficult than you imagine, I think, due to transaction costs and emotional/social barriers. I've read theories that suggest that unemployment and labour force participation remain stubbornly high (and may remain persistently high) as the Great Recession allowed the private sector to clean out "dead weight" employees it has maintained for longer than it needed to. In other words, it became easier and more acceptable to fire people.

fat0wl 13y ago
yes especially from what i've seen at big corporations where i've worked, the same amount of work could be done with like 1/3rd or 1/5th of the staff if the managers paid more attention to efficiency. The recession aspect is really interesting and I bet this indeed happened, and I bet there is little negative feedback because most of these people add nothing to the company's efficacy anyway.
yetanotherphd 13y ago
I never imagined that hiring/firing was not difficult, that is not really important for my argument. The property of the free market that I was relying on was simply that employers only hire people that they expect, on average, to be worth their pay. There is nothing in our economy that would induce an employer to hire an "unnecessary" worker.
- fat0wl 13y ago
  heh go sit in at a corporation then. i believe the core concept is that they have so much money that they'll generally hire a lot of people onto projects "just in case it helps the project move faster", basically overstaffing to an extreme degree where some are only adding small decorative support to the core laborers who are knocking down the real tasks. And as you said they "hire people that they expect, on average, to be worth their pay" but when one turns out to be below average they seem to let them fester for a while before eventually figuring out what to do with them -- often a transfer rather than firing. At some big companies once you have the job, you have it. Worst case scenario is then hitting your ceiling with no chance of promotion but not usually a firing from what I've seen (and I'm in the contract world, where firing is actually much easier).
- drabiega 13y ago
  > that they expect, on average, to be worth their pay. This is actually a pretty huge caveat. As it turns out, information is hugely limited and this has pretty far reaching implications for the shape of the labor market. Firms desire to grow and hire people to that end but they're necessarily pretty bad at guessing who will actually be profitable to hire and it's even difficult to figure out if the employees you already have are profitable and if so which ones. The result is often that lots of people get hired, many in capacities to try to figure this information out, and thanks to immense capital a few of them produce enough to employ the rest. This arrangement works because other firms are similarly handicapped but it is far from efficient in terms of resource, capital, or leisure allocation.

fat0wl 13y ago

yes especially from what i've seen at big corporations where i've worked, the same amount of work could be done with like 1/3rd or 1/5th of the staff if the managers paid more attention to efficiency. The recession aspect is really interesting and I bet this indeed happened, and I bet there is little negative feedback because most of these people add nothing to the company's efficacy anyway.

yetanotherphd 13y ago

I never imagined that hiring/firing was not difficult, that is not really important for my argument. The property of the free market that I was relying on was simply that employers only hire people that they expect, on average, to be worth their pay. There is nothing in our economy that would induce an employer to hire an "unnecessary" worker.

fat0wl 13y ago
heh go sit in at a corporation then. i believe the core concept is that they have so much money that they'll generally hire a lot of people onto projects "just in case it helps the project move faster", basically overstaffing to an extreme degree where some are only adding small decorative support to the core laborers who are knocking down the real tasks. And as you said they "hire people that they expect, on average, to be worth their pay" but when one turns out to be below average they seem to let them fester for a while before eventually figuring out what to do with them -- often a transfer rather than firing. At some big companies once you have the job, you have it. Worst case scenario is then hitting your ceiling with no chance of promotion but not usually a firing from what I've seen (and I'm in the contract world, where firing is actually much easier).
drabiega 13y ago
> that they expect, on average, to be worth their pay. This is actually a pretty huge caveat. As it turns out, information is hugely limited and this has pretty far reaching implications for the shape of the labor market. Firms desire to grow and hire people to that end but they're necessarily pretty bad at guessing who will actually be profitable to hire and it's even difficult to figure out if the employees you already have are profitable and if so which ones. The result is often that lots of people get hired, many in capacities to try to figure this information out, and thanks to immense capital a few of them produce enough to employ the rest. This arrangement works because other firms are similarly handicapped but it is far from efficient in terms of resource, capital, or leisure allocation.