Re: AltInst: a "work spreading tax"

From: Tom Walker <>
Date: Fri May 29 1998 - 15:42:08 PDT

David Chapman wrote,

>I'm not sure whether I've properly understood your paper, but you seem to
>be saying that in at least some instances employers would make more profit
>if they employed more workers each working fewer hours, presumably for the
>same pay per hour. For some reason I can't see, they don't realise this,
>and they need to have it pointed out to them.

Yes, that's what I'm saying. In a case study I did looking at employment in
a telephone utility, six out of a workforce of 162 had been hired within the
last seven years. There were another ten who had been hired in the eight
years prior to 1991. That is to say, over 90 per cent of the workforce in
that unit had more than 15 years of seniority. Average seniority was 19 years.

When I mentioned the high average seniority to a researcher who has done
case studies in pulp mills, she replied that in the pulp mills the *newest
hires* had 17 years seniority. I've heard stories of the same kind of aging
employment structures in college adminstration, government departments and

Short term savings from "hiring freezes" translate over time into an
expensive, top-heavy human resources mix. I would guess that employers don't
realize this because if you only do year-to-year comparisons, you only see
the short-term "savings" and not the long-term loss.

The apt comparison would be with maintenance, depreciation and replacement
of capital equipment. If you're only looking at the short-term maintenance
costs, you can "save money" by running your equipment into the ground. As I
understand it, this is what happened in Eastern European economies under the
Uniform Chart of Accounts. The goods produced by some "profitable"
enterprises were worth less than the raw materials they consumed.

I agree that the work-spreading tax would be an excellent way of pointing
out to employers that they could make more profits by hiring more people to
work fewer hours. The problem remains of convincing the politicians (who
also don't see this) and the high priests of policy (who are rigourously
trained to not see) that a work-spreading tax is really more educational
than interventionist.


Tom Walker
#408 1035 Pacific St.
Vancouver, B.C.
V6E 4G7
(604) 669-3286
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Received on Fri May 29 15:59:25 1998

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