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Timesizing News, March 2009
[Commentary] ©2004-09 Phil Hyde, Timesizing.com, Box 117, Harvard Sq, Cambridge MA 02238 USA 617-623-8080
3/31/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Redding businesses using *state Work Sharing plan, By David Benda, Record-Searchlight via Redding.com - Redding,CA,USA.
[So far there are roughly 20 such state programs with pressure on the rest of the states to get with it.]
The economic slump has spiked interest in a state program that gives employers a temporary alternative to layoffs.
Instead, under Work Sharing Unemployment Insurance, the employer reduces employees' workweeks.
Affected workers collect a percentage of their unemployment benefits - if the workweek is cut from five days to four days, it would be 20 percent - for the day they don't work.
"The biggest thing is we have longtime employees and we have spent a lot time and money training them," said Sue Harbert of Harbert Roofing in Redding. "We just don't want to terminate them and have them looking for another job."
Like all businesses connected to building, Harbert Roofing has seen its workload decline.
Harbert Roofing already has laid off five employees and wants to avoid more layoffs, Harbert said.
While the company hasn't started a Work Sharing program, Harbert said the contractor will eventually have to use it.
"We have 25 employees and I have 25 packets," said Harbert, who declined to say when she would start.
Established in 1978, Work Sharing saw the number of participating employers increase 102 percent last year, from 1,386 in 2007 to 2,800 in 2008.
The number of employees covered rose from 76,300 two years ago to 109,000 in 2008.
Talbott Smith, who oversees the EDD program, said as of mid-March the state had approved 1,095 Work Sharing employer plans - nearly the total amount for 2007.
Smith didn't have a county breakdown for Work Sharing claims.
"It has been challenging for us because, as you know, the unemployment rate continues to go up," Smith said. "We have had month after month where we've seen historic increases in unemployment."
Shasta County's unemployment rate in February was 16.2 percent, a 16-year high. Moreover, 100 fewer workers were employed in construction last month than in January. The sector saw a decline of 1,300 jobs in February compared with February 2008.
Sylvia Schmitt, who owns Big Valley Sanitation and Design Time & Tile, signed up late last year for Work Sharing. Between both businesses, Schmitt has 12 employees who are eligible.
"We did sign up, but I haven't had to use it. So far we have been very fortunate and we've been able to keep everybody working," Schmitt said. "We have restructured our business a little bit and we are OK."
Work Sharing plans are good for six months and an employer can sign up for one year. New plans are approved in about five days once they are received, said Smith of the EDD.
Employers are charged for Work Sharing benefits the same way they're charged for regular unemployment insurance benefits. However, employers who participate have the potential of seeing a higher unemployment insurance tax rate in future years, Smith said.
Turtle Bay Exploration Park is another north state employer looking to Work Sharing.
The Redding nonprofit organization in January announced it was trimming operating hours and cutting management salaries and has lost eight employees since mid-2007.
Jacque Holden, human resource officer at Turtle Bay, said she contacted the state Monday to file a Work Sharing plan. Holden expects roughly 10 employees would be eligible for Work Sharing.
"It's fabulous to know that such a program is out there, and it benefits the employee and employer," Holden said.
Reporter David Benda can be reached at (916)? 225-8219 or email@example.com.
Work Sharing facts
Established in 1978, California's Work Sharing Unemployment Insurance Program allows payments to workers whose wages have been cut due to an economic slowdown:
- An employee whose work week has been reduced from five days to four days faces a 20 percent cut in wages and hours. Work Sharing benefits would be 20 percent of the unemployment insurance benefits the employee would receive if unemployed.
- A minimum of two employees, making up at least 10 percent of the company's regular work force or a unit of work force, must be affected by reduction in wages and hours worked to submit a Work Sharing plan.
- Employers are charged for Work Sharing Unemployment benefits in the same manner as for regular unemployment benefits.
For more information, call (916) 464-3300.
- Lenox American Saw cuts workweek to 4 days, saving nearly 70 jobs, By JIM KINNEY, The Republican - MassLive.com - Springfield,MA,USA.
EAST LONGMEADOW, Mass. - Lenox Industrial Products & Services put most of the production workers at the Lenox American Saw factory here on a four-day work week this week in the hope of avoiding further layoffs.
The workers will get four days of pay and one-fifth of what their unemployment benefit would have been had they been fully laid off, said Daniel P. McDonough, vice president of personnel at Lenox, on Tuesday.
The arrangement is through the state's WorkSharing program.
Without the WorkSharing program, Lenox would have had to lay off 60-70 workers outright, he said. The factory has 600 employees, including 220 production workers.
Lenox workers average about $16 or $17 an hour, said McDonough.
"It's pretty much across the board," he said.
Edward T. Malmborg, director of the state Division of Unemployment Assistance, said the WorkSharing program has been in place since the 1980s and is getting more and more use in this recession.
As of March 14, there were 252 companies and 3,873 workers participating, he said. In March a year ago, there were 372 employees in the program.
The government allows for the program, but not every state has one, said Malmborg.
Under the program, workers gain unemployment that is in proportion to their reduction in hours. They also receive a percentage of the $25-per-child dependency allowance under certain conditions.
Workers also get to keep their company benefits, including health care, said Malmborg.
He said the state markets the programs to companies that believe they will recover and be able to bring workers back to full time within six months.
Lenox benefits by keeping its workers, McDonough said.
"It also helps us to maintain the experience and skill we'll need when this turns around," he said.
David A. Pirkle, president of Lenox Industrial Tools, said the demand for the tools it makes for building contractors started to fall early in 2008, but the company weathered that storm. Then, in October, the market for industrial band saws and other tools used in such industries as lumber, aerospace, and especially automotive fell dramatically.
Parent company Newell Rubbermaid reported that net sales for 2008 increased by 1 percent to $6.47 billion, compared to $6.41 billion in 2007. But net sales for just the fourth quarter of last year fell 11.6 percent to $1.45 billion, compared to $1.64 billion in the fourth quarter of 2007.
In the middle of January, Lenox laid off 35 workers, McDonough said. The company laid off 11 more workers a few weeks ago.
Pirkle said the company cut other costs, as well.
"Now, as of February, we've done a good job of getting our arm around where the bottom is," he said. "We are hitting our forecast now."
He expects orders to begin picking up next summer, with a more robust recovery sometime in 2010.
Jim Kinney can be reached at firstname.lastname@example.org
- European March Inflation Slows to Lowest on Record (Update1), By Simone Meier, Bloomberg.com.
Europe's inflation rate dropped more than economists expected to the lowest on record in March as the economic slump intensified across the region, adding to concerns that deflationary pressures are emerging.
Inflation in the euro area slowed to 0.6 percent from 1.2 percent in February, the European Union statistics office in Luxembourg said today. The March rate is the lowest since the data were first compiled in 1996 and below the 0.7 percent forecast by economists, according to the median of 35 estimates in a Bloomberg News survey.
Inflation is subsiding as Europe's economy grapples with the worst recession since World War II and companies cut spending and jobs to weather the global slump. Spanish consumer prices declined from a year earlier for the first time ever in March, data showed yesterday. The European Central Bank has signaled it is ready to reduce its benchmark rate further from a record low to help revive growth.
"We don't have an inflation threat at the moment and that's why the ECB has to focus on deflation," said Sylvain Broyer, an economist at Natixis in Frankfurt. "We'll probably reach the low point in inflation at just below zero around mid- year."
Consumer-price expectations fell for a fifth month in March, reaching the lowest level since the indicator was first published in 1990, the European Commission said in a report yesterday. Manufacturers' selling-price expectations also dropped to a record low.
"The grim outlook for economic activity in the euro area and widespread evidence of falling inflation call for exhausting the remaining scope for further cuts," the Organization for Economic Cooperation and Development said in a report today. "With the bleak economic outlook, quantitative easing should be used to support demand."
The euro-area economy will probably shrink around 2.7 percent this year and stagnate in 2010, the ECB said earlier this month. Inflation may average about 0.4 percent this year. The central bank aims to keep annual price growth just below 2 percent.
"We expect demand to remain very weak throughout 2009 before gradually recovering in the course of 2010," ECB President Jean-Claude Trichet told European lawmakers in Brussels yesterday. He said 2009 will be "a very, very difficult year, where you have to accept negative growth all across the year."
With employers firing workers to cope with declining demand, Europe's jobless rate probably rose to 8.3 percent in February from 8.2 percent in the previous month, according to a Bloomberg survey. That would be the highest since June 2006. The statistics office will release the unemployment report tomorrow.
Munich-based Siemens AG, Europe's largest engineering company, said on March 27 that it is cutting personnel costs and will "significantly" increase the number of employees working shorter hours. Heidelberger Druckmaschinen AG, the world's largest manufacturer of printing presses, plans to fire 5,000 workers, or about a quarter of the workforce.
A 50 percent drop in oil prices over the past year has helped push down inflation. European core inflation, excluding energy and food prices, is currently at 1.7 percent.
The "spectacular decline" in energy costs since mid-2008 has increased "the risk of deflation," ECB council member Nout Wellink wrote in a March 26 report. Trichet yesterday said policy makers "don't see that risk substantiated" at the moment. While inflation rates will "possibly temporarily" turn negative around mid-year, they are expected to accelerate again in the second half, Trichet said earlier this month.
There is "already strong evidence that underlying inflationary pressures are diminishing rapidly," said Howard Archer, chief European economist at IHS Global Insight in London. "We expect the ECB to bring interest rates down to a low of 0.5 percent by mid-year."
Most economists in a Bloomberg survey expect the ECB to lower its benchmark rate to 1 percent when council members next meet on April 2 in Frankfurt. The central bank already has cut the key rate by 2.75 percentage points since early October.
To contact the reporter on this story: Simone Meier in Frankfurt at email@example.com
- German Unemployment Rose More Than Forecast in March (Update2), By Brian Parkin, Bloomberg.com.
German unemployment rose more than economists forecast in March as foreign and domestic demand weakened, affecting companies' profits and forcing them to cut costs and jobs.
The number of people out of work rose a seasonally adjusted 69,000 to 3.4 million, the Nuremberg-based Federal Labor Agency said today. Economists forecast an increase of 52,000, according to the median of 32 estimates in a Bloomberg News survey. The adjusted jobless rate rose to 8.1 percent from 8 percent.
Heidelberger Druckmaschinen AG, the world's largest maker of printing presses, and Kloeckner & Co. SE are among companies cutting jobs as sales slump. While the German government plans 82 billion euros ($108 billion) in stimulus measures, Europe's largest economy may contract as much as 4.3 percent this year, according to the RWI economic institute.
"The downturn is spreading from the external and industrial sectors to the wider economy," said Jennifer McKeown, an economist at Capital Economics Ltd. in London. "It seems likely that consumer spending will remain very weak" and that "a recovery is some way off."
German exports, which account for about a third of the economy, are waning as economies from the U.S. to Japan slump, stifling demand. Business confidence in Europe, the buyer of two-thirds of the country's exports, fell to a record low this month, the European Commission said yesterday.
The Organization for Economic Cooperation and Development today said the combined economy of its 30 member nations will shrink 4.3 percent this year, the most in more than 50 years.
German unemployment began to increase in November after falling steadily for more than three years. The jobless total may increase by an unadjusted 430,000 to 3.7 million this year, the Labor Agency's IAB forecasting unit said on March 24. The projection assumes an economic contraction of 3.5 percent.
The tally may be even higher, according to the agency's President Frank-Juergen Weise, who said in an interview today that he won't exclude the unadjusted total rising to 4 million by the end of the year.
Chancellor Angela Merkel, facing an election in September, is counting on the economic stimulus programs, including funding shorter working weeks, to curb the rise in joblessness.
The labor provisions allow companies to reduce workers' hours and pay while keeping them on payrolls and the labor agency tops up pay packets. Merkel in January extended the facility for each worker to 18 months from six months.
Steel-maker Salzgitter AG said last week that it will place a third of its 24,000-strong workforce on short-time after orders fell. German companies notified the Labor Agency in February that they were planning to add 700,000 workers to those already working shortened shifts.
The economic slump has prompted the European Central Bank to cut its key interest rate by 275 basis points since early October to a record low of 1.5 percent. The Frankfurt-based bank will probably lower the rate to 1 percent on April 2, according to economists surveyed by Bloomberg.
According to the latest comparable data from the Organization for Economic Cooperation and Development, Germany's jobless rate rose to 7.3 percent in January from 7.2 percent a month earlier. The U.S. rate jumped to 7.6 percent from 7.2 percent. Unemployment in France rose to 8.3 percent from 8.2 percent.
In western Germany, the number of people out of work rose by a seasonally adjusted 57,000 in March, while the number in eastern Germany increased by 12,000, today's report showed.
To contact the reporter on this story: Brian Parkin in Berlin at firstname.lastname@example.org.
3/30/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Jobless But Not Jokeless in Journalism, by Dave Astor, HuffingtonPost.com - New York,NY,USA.
Many Americans don't care that newspapers are hemorrhaging jobs, but laid-off journalists wandering the streets could become a quality-of-life issue. So I have some suggestions about how jobless "journos" might become gainfully employed at a time when traditional media jobs are growing scarce.
There are always the predictable options such as blogging, freelancing, teaching, and PR work.
[Show us the money.]
But we also have to think outside the box.
For instance, new jobs could be inspired by the move of many readers from print to online. Typical moving companies, with their trucks full of furniture and lamps, aren't trained to transport readers fleeing "old media." But ex-journos could start their own moving firms -- and go on to gently encase print readers in bubble-wrapped boxes before putting them on trucks bound for their digital destinations.
Another way to create jobs would be to have reporters work shorter hours. For instance, a small newspaper with 10 reporters each toiling 45 hours a week could have 450 reporters each work one hour a week.
[Ridic, haha, but less ridic, how about having 15 reporters each work 30 hours a week, or even 30 reporters each work 15 hours a week? The fewer would-be reporters pushing for jobs at lower pay, the more pay of existing reporters has a chance to rise.]
Individual salaries would need to be adjusted accordingly but, heck, the price of gasoline has dropped since last year.
Meanwhile, journalism's wage-freezing trend creates other job possibilities. Out-of-work reporters could sell big blocks of ice to keep paychecks frozen in warmer climates. Ex-journos could also launch online travel sites specializing in trips to the Arctic Circle, where wages of vacationing reporters wouldn't unfreeze during the few days they manage to get away from their understaffed newsrooms.
What about jobs for laid-off editorial cartoonists? Given that there might be more former staff cartoonists (still living) than current staff cartoonists (presumably still living), there are enough ex-staffers to draw a huge cartoon time machine for trekking back to B.C. (Before Cutbacks). These visual satirists could then earn some bucks doing trenchant commentary on the wars of Alexander the Great. A wireless connection to transmit battlefield 'toons might be hard to find, but tech support became less expensive after it was outsourced to the poorer sections of ancient Egypt. (If you're looking for a joke here about pharaoh reporters getting buried in inverted pyramids, look elsewhere.)
Finally, if President Obama pulls most American troops out of Iraq, that would free up billions of dollars for domestic use. Put some of that money in the hands of unemployed journos, and they could build souvenir stands outside shuttered newspapers to sell mugs and other knickknacks reading: "The reporter I bought this from once had a real job."
- 5 Long Is. businesses fight to avoid layoffs, BY CARRIE MASON-DRAFFEN, Newsday - Long Island,NY,USA.
The beginning of the year spooked Sharon Newman, the chief executive of printing company Action Envelope in Lindenhurst. News about big layoffs seemed endless.
"It was emphasized over and over in everything you heard that the companies that survive will be the ones that downsize and hold on to their cash," Newman said. "And we started thinking maybe we should lay off."
After some thought, though, she opted to stick with the 38-year-old company's tradition of avoiding layoffs. That strategy has placed Action Envelope in ranks that have become decidedly rarer during this recession: Companies that have never laid off employees.
In fact, massive job losses have helped define the current recession as the worst in a generation. Companies ranging from Macy's to Microsoft have announced plans to cut thousands of jobs. Major Long Island employers, including Arrow Electronics and Audiovox, also have announced layoffs.
But some local companies like Newman's have bucked that trend. They are mostly small businesses that prize their loyal and stable workforce. For them, layoffs are an option to try to keep off the table when scouring for ways to cut costs.
Still, Newman acknowledged that the recession has affected her business.
"If we are 10 percent down [over] last year, we will be content with that," said Newman, who has 35 employees. "I am not going to ruin people's lives over that kind of loss."
To avoid layoffs during the 1990-91 recession, she cut back the workweek of three pressroom employees from five days to four. This time she has cut back on the number of uniforms press employees use and the amount of coffee ordered for the office.
"There are a lot of places that you can cut before sending people to unemployment, and that is what we are trying to do," she said. "I think it's more important for us to think of creative ways to grow our business. ... "
If ever a company had a reason to panic in this downturn, it's the 23-year-old Alcott Group, a Farmingdale human resources firm that provides payroll and other services to businesses. After sales rose for 20 years, they were flat in 2008, said co-founder and president Louis Basso.
In this environment, though he said, "Being flat is the new growth."
Since the company is private, he has breathing room, he added.
"We do projections and try to meet those projections, but we don't get hysterical if there is a bad quarter," said Basso, who has 50 employees.
The not-running-with-the-herd strategy helped the company grow through the recessions of the early 1990s and 2001, he said. Basso sees recessions as opportunities to spend money to bring in more business, and that means holding on to employees.
"Your employees are your most valuable resources ... to get continuity with your customers," he said.
Layoffs are fairly new
Layoffs weren't always a popular business strategy to cut costs. In fact, they didn't gain popularity until the 1980s, when stiff competition heightened companies' concerns about their finances.
Corporations became "much more focused on their short-term bottom line," said Steven Kyle, professor of applied economics at Cornell University in Ithaca. "So they are much less willing to carry workers they don't strictly need."
But downsizings carry risks. Some laid-off employees could entice former co-workers or clients to join them, said Linda Berke, president of Taylor Performance Solutions, a Melville training and consulting company.
And, she added, "there's always a possibility that they could spread negative comments about you."
Pushed to the wall?
Some small-business owners who have resisted layoffs acknowledged that they sometimes may be justified - but in extreme cases.
"Unless a company is pushed to the wall and they have to do it so the company can survive," said Newman of Action Envelope, "I don't think it's right."
One of the secrets to no layoffs is no hiring binges, according to John Sullivan, executive vice president at Delta Computer Group, a 19- year-old Farmingdale tech-support and computer maintenance company.
"We've always run the business by the bottom line to make sure there is enough revenue to support the people we have in place," he said.
The company, which has 110 employees, grew during the last recession, he said, as corporations outsourced to smaller businesses like his. Though business is slow, Sullivan said he wants to be well-positioned when a rebound occurs. That means holding on to employees, he said.
"You don't want to lose that talent level," he said.
Advantage Payroll in Freeport has never laid off, either. In fact, it recently hired two salespeople, said its president, Robert Basso, who founded the company in 1996. (He is not related to Louis Basso.)
The company, which has 27 employees, posted double-digit growth in the last recession. And while business has slowed, Basso still adheres to the business model of going after new business in a recession and retaining staff.
"I would rather talk to people about reducing pay to keep the full staff," he said. Layoffs are "a blow to morale within a company."
'I would rather talk to people about reducing pay to keep the full staff.' -- Robert Basso
Laid-off workers could get former co-workers to join them elsewhere. - Linda Berke
When a rebound occurs, 'You don't want to lose that talent level.' -- John Sullivan
'There are a lot of places you can cut before sending people to unemployment.'- Sharon Newman
Peak to trough
The number of unemployed workers has grown as the recession has dragged on.
(Start of recession, Dec. 2007)
Sources: U.S. Department of Labor; State Department of Labor
3/29/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Colleagues pitch in to ease the pain - To avert layoffs, employees raise their hands for pay cuts, furloughs, by Erin Allworth, Boston Globe, front page.
The names did it. Brandeis University English professor William Flesch knew balancing the budget of the school of Arts and Sciences meant cutting jobs. But when he studied a list of staff members whose positions were in jeopardy late last year, Flesch balked. He envisioned the faces of people he knew and liked.
"It strikes you to do anything you can, not to have to fire people," said Flesch, who served on a committee charged with overseeing layoffs.
For him, that meant donating 1 percent of his salary to help retain employees who worked in nonteaching positions in the school. He urged other faculty in the department to do the same. About a third of them responded, raising $120,000 - enough to save two of seven jobs scheduled to be eliminated.
[This is the intelligent third, the salt of the earth.]
As the economic downturn persists, specialists who follow workplace trends say more employees are trying to save colleagues' jobs through voluntary pay cuts or freezes, furloughs, and donations. At Beth Israel Deaconess Medical Center in Boston, for instance, executives recently agreed to take a salary cut and doctors donated more than $350,000 to preserve several hundred positions. Similar outpourings have rescued 10 to 15 jobs at Gentle Giant Moving Co. in Somerville, and about 15 at AEW Capital Management, a real estate investment man agement firm based in Boston.
"There's this sense that we're all in this together," said Kathie Lingle, executive director of the Alliance for Work-Life Progress at WorldatWork, a human resources association in Arizona. "That's different from other recessions."
In a Suffolk University/Boston Globe poll on the economy conducted last week, 62 percent of the employed people who participated said they would accept a pay cut to save a coworker's job.
Widespread hardship can spur altruistic behavior, said R. Jay Wallace, who teaches moral and political philosophy at the University of California at Berkeley.
"This economic crisis is just bigger than any that most of us are familiar with, and it's likely to affect all of us: that person in the next office or the next cubicle or me," Wallace said. "If you have the sense that we've got to do something to save the economy or to save millions of jobs, I think people are willing to take extraordinary measures."
One of those people is Jill Anderson, whose household took a double hit because of the shrinking economy. She and her husband work at Gentle Giant, where employees opted to take pay cuts or monthlong furloughs to prevent layoffs.
"Maybe for half a second, it was like, 'Whoa!' " said Anderson, the firm's interstate sales manager. But then she agreed to give up a little to benefit everyone.
"This is about good people, a sort of family," said Anderson, whose income dropped 20 percent because she worked fewer hours for several weeks. Her husband, Tom, director of interstate operations at the company, did the same, on top of accepting a 5 percent salary reduction.
To compensate for the loss of income, the Andersons are buying groceries at a supermarket known for discounts, reducing monthly credit card payments, eating at home more often, and putting off buying summer clothes.
Coworkers like Dara McKenna are appreciative.
"Hopefully, it'll help save the company, which will, in turn, save my job, all our jobs," said McKenna, a Gentle Giant mover whose hours dwindled as lagging home sales lessened the demand for moving services.
Ryan Falvey, Gentle Giant's vice president of organizational development, said employees have helped save the company $800,000 to $1 million.
"Everyone recognizes that these sacrifices have helped us hold onto jobs," Falvey said.
At AEW, senior executives agreed to a 5 to 15 percent pay cut, depending on their salary, and chief executive Jeffrey D. Furber said he may ask employees to consider a furlough.
"I wasn't sure how this would be received," Furber said of the reduced salaries. "But I got so many e-mails from people in the firm saying, 'Great idea. I'd rather see this than someone else in the firm lose their job or me lose my job." '
Colleagues' concessions have helped AEW employee Michele O'Brien stay calm whenever she dwells on her family's finances. In October, her husband was laid off from his sales job at a software company. Meanwhile, the couple's 17-year-old son is looking at colleges to attend.
"Having the comfort level of a firm that was proactive in the way that AEW has been makes it easier for me to sleep at night because I'm not waiting for the other shoe to drop," said O'Brien, an assistant vice president in marketing and client services. Even so, she said, the family has ruled out a summer vacation, eliminated its entertainment budget, and made other cutbacks. Cambridge Health Alliance, which includes three hospitals in the Boston area, has been working to avert massive layoffs since the fall, when Governor Deval Patrick unveiled state budget cuts that would result in $40 million less for the hospital group, which relies heavily on government funding. That could have forced Cambridge Health Alliance to shed about 600 jobs from a workforce of more than 4,000. The alliance saved half the positions by negotiating with the state for aid and reducing expenses drastically. In an attempt to prevent additional cuts, Cambridge Health Alliance executives recently agreed to a 5 percent pay cut effective this summer. They will also donate 40 hours of wages each, and give up bonuses and other incentive-based compensation.
"The idea is to save jobs and preserve the mission of the hospital, not just balance the budget," said Doug Bailey, a spokesman for the alliance, which will save between $600,000 and $700,000 through the executive-level cutbacks. "And I think people are getting that."
Giving up compensation to save jobs seems to be a relatively new phenomenon, according to Lingle, the human resources specialist. It is rooted in established workplace initiatives, such as programs that allow employees to donate vacation time to help an ill coworker.
"In the workplace, it's the people who get the job done, and that's always where salvation is going to lie because they're on the front lines," she said.
Among all the goodwill, however, there is some tension. As people struggle with their personal finances, some may question whether they can afford to help others. Peer pressure also can play into someone's decision about giving up a raise or accepting a furlough, especially if coworkers go along with job-saving efforts, said Carolyn Marvin, professor of social ritual at the Annenberg School for Communication at the University of Pennsylvania. And when pay cuts aren't evenly distributed, some employees might believe they are being asked to shoulder too much of the burden.
"What is the proper sacrifice and who should be asked to sacrifice - those are the questions that we have to negotiate," Marvin said. "These are real prices that people are paying, and so it's all the more remarkable in some way when people are able to look beyond themselves and help others who are struggling even more than they are."
Beth Israel Deaconess chief executive Paul Levy said some of the e-mails he has received since the hospital reduced its layoff numbers have addressed the fairness issue. One employee said all employees, including those at the low end of the salary range, should have their wages frozen.
But an e-mail from an administrative assistant offered a more typical response, Levy said.
"I don't make a huge salary," wrote the woman, who is a single mother and holds a second job outside the hospital. "I can't offer much, but I would like to contribute $100 to the fund. I hope that helps a little in saving someone's job even if it's not my own."
Erin Ailworth can be reached at email@example.com.
- Deep cuts keep region's companies going, By Joe Napsha and Kim Leonard, Pittsburgh Tribune-Review via pittsburghlive.com/x/pittsburghtrib - Pittsburgh,PA,USA.
When Kennametal Inc. told all its employees to take a week off without pay this month, the cost-cutting move sparked some grumbling.
Still, "There was nothing we could do about it. We just dealt with it," said Kevin Honse, president of United Auto Workers Local 1059, which represents employees at the industrial toolmaker's Kingston plant in Derry, Westmoreland County.
"Everyone figured one week was better than a layoff."
Plant shutdowns and massive layoffs are getting most of the attention these days as the recession worsens and employers scramble to cut costs. But some Western Pennsylvania companies and government agencies are retooling workers' schedules, cutting or freezing pay and benefits or forcing staffs to take an unpaid hiatus, to keep core numbers on their payrolls as they await better times.
Kennametal, based in Unity, Westmoreland County, went through layoffs last year and said in January it would lay off 1,200 more workers, including 150 in Pennsylvania. The unpaid-week-off order for the remaining 12,800 workers came later.
Gannett Co., the nation's biggest newspaper publisher, in January ordered most of its 31,000 employees to stay home for a week without pay. And last week, the Pittsburgh Post-Gazette told about 170 managers and nonunion employees to take a week of unpaid leave in April, May or June, with the possibility of more time off later this year.
Compensation-wise, "Everything is on the table, and that is different from other slowdowns, said Dawn Cumpston, a partner in 3c Compensation Consulting Consortium in Wilkins.
In her 25 years in business consulting, "We didn't see anything like we are seeing now. They've cut bonuses and salaries to avoid layoffs."
Companies are cutting employees' hours, or giving more work only to full-timers or only to part-timers. Last month, the average work week nationwide was 33.3 hours, up slightly from 32.9 hours in January -- the lowest level since the federal government began tracking the figure in 1964.
[It's happening anyway - let's make it happen in the best way by Timesizing!]
Employers are looking at overall hiring and replacement levels, with an eye toward switching to more temporary workers, said Thomas Tomczyk, a principal at Mercer Health & Benefits' office Downtown. Manufacturing, wholesale sales and banking professionals may be the toughest to replace with part-timers, he said.
Still, more than 8.6 million people are working part-time because they can't find full-time work - a 76 percent increase from a year ago, the Labor Department said.
More than 70 percent of companies that Mercer surveyed in a global study in November said they want to cut wages this year below budgeted levels. Raises, if there are any, could drop to 2 or 3 percent, from 4 percent before.
Some companies and government agencies have moved to a four-day work week.
Channellock Tools kept its 400 employees at two plants in Meadville, Crawford County, working full schedules between October - when sales began to dip with the economy - through mid-February.
By then, "We had an inventory buildup that we could no longer absorb," said Don Hornstein, vice president of human resources at the company known for its pliers and other hand tools with bright blue grips.
Now, the plants operate Mondays through Thursdays, and are shut down on Fridays. The move is saving energy, as well as wages, but "where we are taking a hit is in benefit costs" which the company continues to pay for all the workers.
"From a pure dollars and cents standpoint, it's a better decision to reduce the work force and lay people off," Hornstein said.
[No it isn't, cuz you're just cutting spending power and markets further and guaranteeing further shrinkage.]
"But if we get an uptick in business, we are able to react quicker, and we are maintaining our work force by doing this."
No employees have quit over the reduced schedule, he said, and by collecting unemployment compensation for the one day they've lost, their incomes aren't far below their full pay.
James Craft, a professor of business administration at the University of Pittsburgh's Katz Graduate School of Pittsburgh, said four-day weeks can work in a variety of ways, and can be trickier to use in service- or protection-oriented businesses.
But they have plenty of advantages, beyond saving payroll or energy costs for employers. Younger people tend to look for more flexible schedules, and by working four 10-hour days, for example, they can have an extra day to run errands, and skip a day's commuting and day-care costs.
"In Utah, a lot of government agencies are doing this, and in general, a lot of municipalities have gone to four days," Craft said.
Westmoreland County Recorder of Deeds Tom Murphy looks forward to switching his 12 full-time and two part-time employees to a four-day schedule once the office completes its move in a week or two from the courthouse in Greensburg to new quarters nearby.
His plan, however, will spread staff out to extend the office's hours, five days a week. "We are going to be the test for Westmoreland County," he said.
With the 8:30 a.m. to 4 p.m. schedule, people have a tough time getting to the office to file or look up deed records, or they have to pay an attorney to do it, Murphy said.
The new 8 a.m. to 4:30 p.m. schedule will improve service without increasing costs, besides cutting commuting expenses for workers. County commissioners and the Service Employees International Union agreed to the change.
"Every fourth week, they'll get a Friday, Saturday, Sunday and Monday off," he said of his staff. "We have done telecommuting here - there are situations where we let people stay home and work.
"The next progressive thing is the four-day work week."
[Amen to that!]
[Sidebar on above article -]
Four-day week - Desperate measures, by Sean Stipp/Tribune-Review.
[Yeah, real desperate - we only cut the workweek in half from 1840 to 1940, invented the weekend and actually got some freedom out of technology for a hundred years - what's made us desperate is stopping workweek reduction cold since 1940 while continuing to pour in automation and robots. Ergo downsizing, with nary a thought that maybe, just maybe, downsizing is the opposite of growth.]
These employers in the Pittsburgh region have slashed costs by freezing salaries, cutting pay, eliminating contributions to 401(k) retirement plans, reducing schedules or forcing workers to take a week off without pay or to go on a temporary furlough:
- Alcoa Inc.
- Allegheny Technologies Inc.
- Ferro Inc.
- FedEx Corp.
- Kennametal Inc.
- Pennsylvania State System of Higher Education's 14 universities
- Pennsylvania State University
- University of Pittsburgh's main campus and its four branch campuses
- University of Pittsburgh Medical Center, Oakland
- United Parcel Service Inc.
- U.S. Steel Corp
3/28/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- IBM may cut 54 local jobs - Big Blue files report with state, By Sarah Bradshaw, PoughkeepsieJournal.com - Poughkeepsie,NY,USA.
WICCOPEE, NY - Pink slips could be handed out to 54 IBM Corp. East Fishkill employees, according to the New York state Department of Labor.
Those layoffs are expected to come "no earlier than June 24," state Labor Department spokeswoman Jean Genovese said.
Genovese was quoting information supplied by IBM under a new state law, effective Feb. 1. Under the Worker Adjustment, Retraining and Notification law, or WARN, IBM is required to give 90 days' notice prior to a mass layoff. A mass layoff is defined on the labor department's Web site as a private employer with 50 or more workers who terminates at least 25 employees. That's for a single site of employment.
There was no WARN filing for IBM's Poughkeepsie plant, Genovese said.
A Poughkeepsie IBMer told the Journal Thursday of having been dismissed with 30 days' notice to the end of the job.
An unconfirmed report Friday was that Manpower employees working at IBM facilities were told they will have to take an unpaid week off during April.
Robin Rabideau, a manager at the Poughkeepsie Manpower office, said she couldn't confirm contractors were asked to take a week without pay.
"The policy is that we can't relay our client's information and this relates to our clients," she said.
Rabideau did say "200 plus" Manpower contractors work for IBM in the Hudson Valley.
In January, the Journal obtained a Manpower memo stating two hours would be cut from each work week for the rest of 2009. The number of staffers affected wasn't specified.
Full impact still unknown
Besides the WARN filing, which cited economic reasons for layoffs, IBM has remained silent on the firings, which, The Associated Press said, are to tally about 5,000 nationally. IBM Director of Corporate Communications Doug Shelton didn't return several phone messages Friday regarding the WARN notice or the report of Manpower-related furloughs.
On Jan. 28, IBM made its first filing under the WARN law, but it was a partial one. The notice said 274 local workers in software application at East Fishkill would be let go as of April 27.
The Journal reported Jan. 29 employees and a union said as many as 900 people lost jobs in Dutchess County's East Fishkill and Poughkeepsie IBM plants during that round of job cuts.
In January, Shelton said IBM's interpretation of the WARN Act is it applies only where the layoff affects at least a third of the work force at the site.
In response to Shelton's WARN application, state Department of Labor spokesman Leo Rosales acknowledged the "mass layoff" definitions were subject to interpretation and said the department will be publishing clarifications to the law.
It's unclear if the Labor Department has done so.
The workers' group Alliance@ IBM reported on its Web site Friday job cuts totaled about 3,200 for the United States and Canada. That figure has been confirmed through severance package offerings, according to Lee Conrad, the group's national coordinator.
The "resource action" pertains to Global Business Services' Application Services unit, the Systems and Technology Group and other units spread across the country, he said.
Regarding the local job loss count of 54, Conrad said the number seems low.
"But until we get more confirmation that seems to be the number we have to go with," he said. Conrad added he believed there were job cuts in Poughkeepsie's site, but wasn't sure how many.
According to comments on the Alliance@IBM Web site, workers were given one week of severance pay for every six months of service, as well as six months of medical benefits.
IBM's total global head count at the end of 2008 was 398,455, including 115,000, or 29 percent, in the United States. A year earlier, the U.S. work force was 6,000 larger, and formed 31.3 percent of the total.
Gannett News Service contributed to this report. Reach Sarah Bradshaw at firstname.lastname@example.org or 845-437-4811.
- The benefits of a four-day week, by Patrick Collinson, guardian.co.uk - UK.
Henry Ford is credited with introducing the five-day week to the US , and is often cited as the man who created the American middle class. Might Toyota, through expediency rather than design, be bringing us the four-day week?
The Japanese car company, facing a 40% collapse in many markets, is considering putting its European factories on to a four- or even three-day week.
It's grim news for the income of workers at its Burnaston factory in Derbyshire, who could lose 20% or more of their pay. But it's rather better than sacking one-fifth of the labour force or cutting pay rates.
We have a lot to learn from the Japanese, who have coped with a two-decade-long economic downturn and deflation. Despite near-zero economic growth, unemployment has stayed far below western levels. Japan has chosen social cohesion over the quick-fix cures popular among Anglo-American economists.
We have a choice. We can sack millions of workers and widen the already severe social gulf between the haves and the have-nots. We can fortify our homes against the inevitable spike in crime as joblessness soars. Or we can share the pain, reducing our hours - and total pay - to "rightsize" output.
Importantly, we should not accept lower pay rates but lower pay through shorter hours.
Is this utopianism? Critics will point to the "failed" 35-hour week experiment in France. But is it really so outlandish?
[No, that "failed" 35-hour week cut unemployment one percent for every hour cut from the workweek.]
Factory workers used to work a five-and-a-half-day week - one reason why football matches traditionally kick off at 3pm on a Saturday.
Nobody despairs that we have lost Saturday morning working. And who should despair a move towards a three-day weekend?
Interestingly, we have tried this before - albeit in 1974, during even more calamitous economic times. The three-day working week lasted from 1 January to 7 March in 1974, as Ted Heath's government battled with striking miners.
What happened to our national output as a result? According to Hansard, the index of UK industrial production fell from 109.2 in the fourth quarter of 1973 to 103 in the first quarter of 1974 - ie: a drop of just 5.7%. So we worked 40% less but produced only 5.7% less. Seems like we are wasting our time going to work for almost half the week.
Of course, that's facile: during the three-day week, many workers remained on full time. And some industries might suffer disproportionately from extended weekend leave.
But imagine what an extra 52 days off each year would do to your work-life balance.
A three-day closure would mean reduced greenhouse gas emissions, lower childcare bills, lower commuting costs and less congestion. Studies show that it promotes higher productivity. Absenteeism would drop as employees make appointments for doctors and dentists on their extra day off.
Loss of pay is the rather large hurdle to get over. For some people it would be mitigated by the fact that the additional earnings of the fifth day are being taxed at 40% anyway.
The five-day week is a relatively modern concept. Maybe our grandchildren will regard it as oddly as we regard six-day-a-week factory working. What is the point in economic growth if it does not offer us more leisure?...
[Not unless we fight for it. Our grandparents thought we would have the same odd regard for the five-day week but we dropped the fight and it don't happen by itself.]
Let's make Thursday the new Friday. And save the global economy to boot.
3/27/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- A Guide to Payroll Cuts, By Ray Silverstein, Entrepreneur.com via msnbc.com - USA.
Right now, smart entrepreneurs everywhere are creating emergency action plans. They have to. Their companies' survival depends on it. It's what great leaders do.
The tough reality is, when earnings fall below a certain point, the only solution is to stem outgoing cash flow. For most firms, that translates to payroll cuts. It's difficult and painful, but it's also unavoidable when you're operating in survival mode.
Once the decision is made to cut personnel costs, there are three components to a payroll-cutting action plan: who and what to cut, when to cut, and how to minimize the damage to survivors.
1. What Are Your Options?
When most people think of payroll reductions, they think in terms of layoffs. It's a sure-fire way to cut operating costs, but it's also the most traumatic. If you do it, check your emotions at the door. That's why it's wise to plan in advance, as opposed to when you're in a panic.
How do you determine who stays and who goes? Decisions should be based on employee capability, not on seniority or on who needs a job most. Rank your employees according to their contributions. Create a list, starting with your most productive workers and working down to the most marginal. If you have to start cutting, you'll know where to start.
Remember, however, that you have other options:
* Declare a four-day work week: Moving from five days to four will generate an immediate 20 percent payroll deduction. And unlike layoffs, it affects all employees equally, which is more palatable for many employers.
* Reduce wages: If you're going to cut wages, do it across the board. One way to make reductions more endurable is to build in performance-based incentives. In other words, give employees the opportunity to earn more if the firm hits specific revenue goals.
* Turn full-timers into part-timers: By doing so, you'll not only reduce wages, but also save on fringe benefits and vacation time. Fringe benefits are only reduced if employees work less than enough hours, per state, not to be considered full-time employees. Remember, you're still obligated to honor vacation earned from past full-time employment.
* Enact furloughs: Ask each of your employees, in rotation, to take an unpaid leave of absence for a specific number of weeks.
* Suspend bonuses: Depending on what portion of payroll is paid in bonuses, suspending them can generate big cost savings. To be fair, make sure to announce the suspensions in advance of the bonus period.
Obviously all of these are tough on employees. But with unemployment at more than 8 percent and rising, most workers would agree that having something is better than nothing.
2. When Should You Cut?
Once you determine what emergency actions you'll take, identify your tipping point for setting that plan in motion. This is your point of no return: If business falls to X, then you'll enact Y.
It's up to you to determine your business's threshold. Every business has its own critical initiation point for its emergency action plan. The items you might want to consider are cash level (including receivables), inventory level, aging of outstanding bids, number of bids and backlog in hours or dollars.
The point is, when you set an objective, measurable point of action, you remove some of emotional upheaval from the process.
3. How to Minimize Damage
Whatever form of payroll reductions you make, recognize that your employees will be traumatized. It's up for you to set the tone. The best approach is to be positive and upbeat, but truthful about the challenges facing your company.
When announcing cutbacks, look your employees in the eye. Be frank, be real and appeal to their sense of reason. Validate what they may be feeling and remind them of the greater economic picture: "I know you're disappointed. I'm disappointed, too. But people in the unemployment line have even greater hardship then we do."
Leadership starts at the top. When asking employees to make financial sacrifices, you must make those sacrifices, too. Your people must see that you share their pain.
In the days that follow, practice "MBWA"--management by walking around. Maintain close contact with your employees. Ask them how they're doing, and let them know how the company is doing. Build a sense of purpose and possibility: "We have to work together and pull through this as a team." Leading by example is the best way to lead your company out of difficult times.
Ray Silverstein is the "Leadership" columnist at Entrepreneur.com and president and founder of PRO: President's Resource Organization, a network of advisory boards for small-business owners. He teaches entrepreneurs how to build a profitable advisory group business. Silverstein is also the author of The Best Secrets of Great Small Businesses.
- [And an example of 1a (above) being applied -]
25% Pay Cuts May Hit NYU Admin, by Charlie Eisenhood, NYULocal.com - New York City,NY,USA
Even after achieving "substantial administrative savings," as John Sexton put it in his January economic outlook email, it appears that NYU is still trying to find ways to shave money off of its labor budget. An administrator, speaking on condition of anonymity, talked with me about some possible payroll changes in the near future.
According to the administrator, who heard about the possible changes through colleagues in payroll and HR, NYU is considering two plans, both of which would drastically reduce pay and benefits to a number of lower-level employees.
The first would be a compulsory program. If NYU determined that a certain job could be completed in a 9-month time frame (i.e. an academic year), the employee would receive a 25% cut in both salary and vacation time. The employee would then have summers off. However, since they would still be "working" for NYU during the summer, the employee's income would still be paid out over a 12-month period.
The source I spoke with gave me the pay scale for all administrative and professional positions, making it easy to calculate what the reduction in pay would be for the lowest pay levels (12-16), the levels most likely to be affected by the potential plan.
The salary data I have are from 2006-2007. Since then there have been two "cost of loving" increases of 3-4%, I have increased the numbers I have by 3.5% (twice, with compounding)....
If this plan is implemented, the sharp cuts could force some administrators to search for new jobs. My source said, "If my salary is reduced by twenty five percent, I will have no choice but to leave the university."
The second plan allegedly in discussion would allow employees to opt into a four-day work week and receive a 20% cut in pay and vacation time. They would still work 12 months.
It's unclear who would actually want to join such a program. Three-day weekends aren't that great.
[They're a heckuva lot better than 7-day 'weekends.']
If NYU ultimately implements the first plan, they would just be making back-door layoffs. There's no way most people would be able to handle a $1000+ reduction in monthly take-home pay. (Remember that the numbers above don't have taxes, social security, etc. accounted for.)
I think that there are a lot of NYU jobs that don't require being here all summer. In that sense, the plan is logical, and over time NYU should be trying to save money by cutting back on the bureaucracy. However, as my source pointed out, "If NYU needs to reassess the role of an administrator or needs to cut funds, that should happen in two different conversations."
I agree. Suddenly forcing employees to take a huge pay cut just to avoid officially laying them off seems like a cheap way to avoid being cast as the "bad guy."
- [and another example -]
On stage, backstage, Seattle Repertory Theatre cuts back, by Janet Tu, SeattleTimes.NWsource.com - United States.
Buffeted by the sinking economy, a decline in subscription-ticket sales and an endowment it can't draw from, Seattle Repertory Theatre - the state's largest nonprofit regional playhouse - is taking some drastic steps, cutting its upcoming budget by one-third and and going to a four-day workweek.
For the next fiscal year, which starts July 1, full-time staff will work 32 hours a week. The theater is also planning two fewer productions, doing more co-productions with other theater companies, presenting smaller-cast plays and cutting a day from performance weeks.
Together, the moves are intended to bring the Rep's budget down from $10 million this season to about $6.5 million next season - the smallest budget in a decade.
Though they've been mounting for more than a year, the Rep's troubles are similar to those faced by many arts organizations locally and nationally.
"What's unique is how we're dealing with it," said marketing and communications director Katie Jackman - in particular, a theater of this size going to a 32-hour workweek. "It's fundamentally changing how we operate."
Most of the 40 full-time, annual, nonunion employees - who work mainly in administration, marketing and educational outreach - will work Tuesdays through Fridays.
As for the union-represented seasonal staff, whose numbers vary from year to year and can get as high as 50 workers, agreements have yet to be reached.
The theater has asked three locals of the International Alliance of Theatrical Stage Employees (IATSE) to reopen contract negotiations.
Those three locals, which represent some 25 full-time seasonal stagehands, set builders and wardrobe crew at the Rep, would be most affected by the shorter workweek. Their current contracts provide for a 40-hour-minimum workweek.
Though they're discussing the issue with the Rep's management, they haven't yet agreed to renegotiate.
In the past, the theater has asked for - and Local 15 agreed to - midterm-contract concessions, including forgoing pension contributions and cost-of-living increases, said Tara Heinecke, managing-business representative of IATSE Local 15.
"Nobody wants to see the theater go away. It's not just a job, it's a passion," Heinecke said. Still, "something needs to change fundamentally in the way (the Rep is managed), if we have to keep doing this."
The Rep's troubles have been building.
Since 2006, the theater has seen a yearly decline of about 9 percent in subscription sales, said Jackman, noting that such sales have also declined in other theaters nationally.
Its endowment - which had been the envy of theaters with smaller or nonexistent endowments - has taken a beating in the stock market and has now dipped below the $14 million original principal, meaning the Rep can't draw from it next season.
Having an endowment, which provided about $1.5 million to the 2008-09 budget, is double-edged, said managing director Benjamin Moore. "When you have income from it, it's fabulous." But it has allowed the Rep to build a larger operation that now needs to be cut.
The theater's draft budget for next season also estimates that grants and donations will drop by about $500,000.
In addition, one day will be cut from performance weeks, which will run Wednesdays through Sundays, rather than the current Tuesdays through Sundays. (Previews, though, will still happen on Tuesdays.)
The Rep has already had layoffs and required its full-time employees to take a two-week furlough.
"We have to live within our means," Moore said. "Everyone gets that. They know they have to make some personal sacrifices."
Across the country, other regional theaters are also facing difficulties.
The Guthrie Theater in Minneapolis is cutting its budget by 14 percent and has asked unions for a salary freeze. Shakespeare & Company in Lenox, Mass., is laying off seven employees and instituting a 10 percent pay cut.
"It's a tough, tough time for all of us. We're just trying to hang on, be creative," said Linda Jacobs, spokeswoman for Theatre Communications Group, a national organization for professional nonprofit theaters.
"It's a really important time for theaters to be a part of communities because it's a place for people to come together and feel united."
Seattle Times theater critic Misha Berson contributed to this report.
Janet I. Tu: 206-464-2272 or jtu(at)seattletimes.com
3/26/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Aided by Safety Nets, Europe Resists "Stimulus" Push [our quotes - US 'stimulus' is Guiana koolaid], by Nicholas Kulish, NYtimes.com
A welder on shortened hours is learning new techniques. (photo 1 caption)
Michael Hartmann, whose employer in Vienenburg, Germany, cut his work hours, is using the time off to get more training. (photo 2 caption)
VIENENBURG, Germany - Last month Frank Koppe gathered together all 50 of his employees at Koppe-Apparatebau for coffee, cake and the kind of bad news that has lately become all too familiar. He told them the small company's business, designing and manufacturing custom equipment for industrial plants, had been sliced nearly in half.
But rather than resorting to layoffs, Mr. Koppe asked half his employees to come in every other week. The government would make up roughly two-thirds of their lost wages out of a fund filled in good times through payroll deductions and company contributions.
The program - known as "Kurzarbeit," which translates as "short work" [or work sharing] - and others like it lie at the heart of a heated debate that has erupted on the eve of next week's Group of 20 meeting of industrialized and developing nations and the European Union, creating a rift between the Obama administration and European governments. The United States is pressing for a coordinated package of stimulus plans by member countries to encourage economic growth, something that Prime Minister Mirek Topolanek of the Czech Republic, which holds the European Union presidency, has called "a way to hell."
But virtually all European governments, led by budget-conscious Germany, are resisting the American pitch, saying the focus should be on stricter regulation of financial markets.
The Europeans say they have no need for further stimulus right now because their social safety nets, derided in good times by free market disciples [ever the chest-pounding experts on suicide] as sclerotic impediments to growth, are automatically providing the spending programs that the United States Congress has to legislate.
Europe's extensive job protections and unemployment benefits are "bad in the upswing, because firms don't dare to hire people, because then they are glued to them," said Hans-Werner Sinn, president of the Ifo Institute for Economic Research in Munich. "In the downswing, it's good if the people are glued to the companies. They keep their jobs. They keep their income. They keep consuming."
[There are still lots of Germans who haven't a clue what they're doing right.]
The German Federal Labor Office projects that it will spend some $2.85 billion this year for more than a quarter of a million people who end up on Kurzarbeit. In comparison, the agency doled out around $270 million last year, as the financial crisis first began to bite, and roughly $135 million in both 2006 and 2007.
That is a relatively small amount of money compared with the $787 billion stimulus package passed by Congress, but the Kurzarbeit program's defenders in the German government say it is carefully calibrated to keep people on the payrolls, where shared burdens mean an efficient deployment of resources.
[Take that, you U.S. & U.K. nitwit economists who keep sneering about worksharers' "true belief in the Lump of Labor fallacy"! Didn't your mommies ever tell you that "Sharing the burden lightens the load"?!]
The big numbers at the top of stimulus bills - promises of future highways, for instance - are not the same as money going into consumers' pockets right now, and from there into cash registers, economists here say.
"While the magnitude of stimulus has been much less in Europe's case, the stimulus has been getting much better traction in Europe than in the U.S. so far," said Julian Callow, chief Europe economist at Barclays Capital in London. He cited a German incentive program that gave consumers around $3,400 to trade in old cars for new ones and that had led to 22 percent more auto registrations in February compared with the previous year.
"Europe can still do significantly more and needs to do it, but the needs for the U.S. have been much more pressing," Mr. Callow said.
Germany already has generous unemployment benefits compared with the United States. And many German companies give workers the flexibility to save overtime hours, carrying over the pay for a rainy day. In the United States, despite scattered reports of unpaid furloughs and wage cuts, companies still rely heavily on layoffs to control labor costs.
As of July 1, Germany's roughly 20 million pensioners are receiving an additional 2.4 percent in the former West Germany and 3.4 percent in the former East, the highest increases since 1994 and 1997, respectively.
Germany's chancellor, Angela Merkel, believes the Americans have underestimated the economic impact of the country's two stimulus packages, worth a total of about $110 billion. Indeed, in terms of immediate stimulus, according to calculations by the International Monetary Fund last month, Germany has committed to stimulus spending this year equal to 1.5 percent of the country's gross domestic product, compared with 0.7 percent in France and 2 percent in the United States. According to a report from Bruegel, a research center in Brussels, while Germany churns out 19 percent of the European Union's economic activity, it accounts for 37 percent of the group's stimulus spending.
American critics, like Adam S. Posen, the deputy director of the Peterson Institute for International Economics in Washington, say that Germany needs to do more. "As a hugely export dependent economy, they have the most to gain from others' fiscal efforts," he said, "and the most at risk if the global trade contracts further - worse if they are accused of free-riding on leakage from others' programs."
Mr. Posen and others argue that while Germany may be doing more stimulus spending than others in Europe, it is counseling other European countries - many of which share the euro as their common currency - not to spend their way out of recession either, but to count on their safety nets to do much of the job.
"They're the ones who basically browbeat other countries into not spending," he said, "who give intellectual and political backbone to other countries' conservative leanings not to stimulate."
[This is true conservatism, not the radical redistribution to the richest that passes for conservatism in the rapidly self-ruining USA.]
Without knowing it, Mr. Koppe's 25 employees are playing their small part in keeping the German economy afloat. But nearly 70,000 employees of the automaker Daimler have been placed on short-hour status. On the bright side [like there's anything dark about shorter hours and more Freedom?!], it means they are able to play with their children, tend to their gardens or - with further government incentives - receive the kind of advanced training that will make them even more skilled when orders pick up again.
[God forbid Americans should spend time raising their own children! Leave it to strangers while lip-servicing "family values" with no Family Time!]
Harder times all but certainly lie ahead for Germany.
[Kinda makes you wonder, in hindsight from 8/16/2011 when the NYT had a major article on Germany without mentioning Kurzarbeit, if the NY Times is really the slightest bit liberal or progressive or even sane - Germany breezed through this downturn thanks to Kurzarbeit and many Germans didn't even know there was a downturn, in contrast to the once-great USA where only the richest didn't know there was a downturn.]
Commerzbank said Monday that it expected the German economy to contract by a shocking 6 to 7 percent in 2009, roughly double earlier projections and the worst decline of the postwar era. Critics of the German government's cautious approach to stimulus fear that because Germany is feeling the brunt of the worldwide recession last, its policymakers are underestimating its force.
Indeed, to travel between the United States and Germany is to find two countries experiencing the economic slowdown completely differently. The severity of the downturn does not appear to have sunk in yet in for Germans. There was no real estate bubble here, and few people have a substantial portion of their savings or retirement accounts invested in the stock market. The unemployment rate has risen more than a percentage point, to 8.5 percent in February from 7.1 percent last November. But, significantly, the latest figure is still lower than it was just a year ago.
"In contrast to America, our social systems are not on the decline right now," Mrs. Merkel said Sunday night in a widely watched interview on a television talk show. "Pensions are not cut, unemployment insurance is not reduced. On the contrary, we can register stable and, in some sectors, also rising expenditures, and this makes me hope that our social market economy will enable us to cope with this complicated situation."
Michael Hartmann, 49, a welder here at Koppe and one of the workers on shortened hours, said he and his wife were trying to save, buying cheaper groceries and driving less to save on gasoline, but doing nothing as severe as they would if he were laid off. "Of course I'm concerned about the reduced wages, but it's better than getting fired," Mr. Hartmann said.
In the meantime, he is learning a complicated welding technique at a nearby vocational school, which he hopes will make him more attractive to his current employer, or others looking for skilled workers.
Victor Homola and Stefan Pauly contributed reporting from Berlin.
- Peaceful Revolution: Women and Work: Why Employers' Work/Life Policies Can--and Should--Survive the Recession, by Joan Williams, HuffingtonPost.com
NEW YORK, N.Y. - It's no surprise to the vast majority of us who have both a job and family responsibilities that something's not working at work. The American workplace is perfectly suited for the American workforce...of the 1950s. Even today, when 46% of the U.S. workforce is made up of women and 81% of women have children by age 44, most good jobs in the U.S. (those with good benefits and pay and opportunities for advancement) are designed around the ideal of a worker who is available for and devoted to work 24/7, with no domestic responsibilities.
Some employers, understanding that having a mismatch between your workforce and your workplace doesn't make good business sense, have allowed for greater flexibility, quality reduced hours jobs, telecommuting, and other workplace policies that better reflect their workers' lives. Businesses -- at least those that want to be profitable -- do not institute policies that hurt the bottom line; which is why claims that employers are cutting back on work/life improvements due to their cost should be read very closely.
"Recession Pushes Some to Eschew Flexible Job Policies," writes Annys Shin of the Washington Post on Monday -- only one of a flood of stories reporting that telecommuting, reduced-hour schedules, and similar programs are dying on the vine during the current recession. Shin's done some responsible reporting here: she acknowledges a mixed picture (more of that later). But her focus, front and center, is on employers eliminating work/life initiatives as the kind of frill that naturally gets suspended in hard times, and that in a recession workers just want to keep their nose to the grindstone anyway.
Not so fast. Let's look closer at the three assumptions that underlie this story line.
First assumption: employers are responding to recession by eliminating work/life programs. As Shin eventually points out, some aren't. "Flexibility programs are helping us" respond to business needs in the current downturn, said Alison Hooker, of Ernst & Young. The challenge is to match supply and demand -- if you have less work, you can't go on for very long paying the same number of people to work the same number of hours. Having non-stigmatized flexible programs in place gives employers options. Sigma Group, an advertising firm, allowed some employees to reduce their hours, which allowed them to save jobs. Firms as diverse as Ernst & Young and George Mason University are encouraging employees to "test drive" flexible work options, with considerable success. KPMG Europe asked staff and partners to work a four day workweek or take a sabbatical of up to three months. Many did, saving jobs in the process.
How come we don't hear more about companies who are responding to the recession by encouraging flexible work, telecommuting, and reduced hours, as an alternative to layoffs?
[Gee, we dunno - could be cuz you haven't bookmarked Timesizing.com]
Second assumption: employers are saving money by eliminating "frills" like flexible work arrangements. Shin quotes someone from the Society for Human Resource Management: "Should we do telecommuting? They don't care. They're worried about where are they going to get payroll next week"
Maybe telecommuting is one way to make payroll next week. Blue Cross/Blue Shield of Massachusetts has hundreds of employees telecommuting as a result of a policy instituted three years ago. That policy is helping to cut costs, given that an employee who works from home does not need an office. Johnson Moving & Storage Company of Denver Colorado, where one out of three headquarters employees works flexibly, found that it had so many telecommuters that it saved a lot of money on its new headquarters building -- it needed less office space.
Telecommuting is only the beginning. Best-practice employers are encouraging flexible work as a way of avoiding layoffs for a simple reason: layoffs are expensive. The Project for Attorney Retention, which I co-direct, calculated that laying off one attorney in a practice group with average compensation of $200,000 can save $211,000. But having all six attorneys in the practice group voluntarily agree to reduce their hours and salaries by 20% can save $240,000. And keeping the whole department means that, when the economy ramps up, the firm will be able to ramp up much more quickly than did those firms that simply laid off much of their staff. Indeed, one reason the accounting firms are so interested in using flexibility rather than layoffs to the maximum extent possible is that, in the last recession, layoffs meant they lost business once the economy picked up because they lacked the capacity to handle the work.
The fact that many employers are choosing to cut costs through layoffs does not mean that allowing flexible work is not an attractive alternative that many employers are using.
Third assumption: employees aren't interested in working flexibly during a recession. To quote Shin's story, in a recession people naturally back away from flexibility programs because they are afraid of being fired. "Work as many hours as you possibly can. Make yourself indispensable" (quoting the executive director of Mothers and More).
For many women, the only alternative to flexible work is quitting -- what has been described as mothers "opting out" of the paid workforce, regardless of the limited choices involved. And women are not very interested in "opting out" right now because they fear that the breadwinner husband they rely on will be laid off. Ironically, sometimes people working remotely or who have reduced their hours are not considered for layoffs because they save the company money (through reduced rent or reduced salaries).
No doubt about it: some people are terrified that flexible work will make them vulnerable in this environment. But often that reflects not their "preference" but their fear of stigma or outright bias, some of it illegal. Indeed, The Center for WorkLife Law, which I direct, runs a hotline for workers with family responsibilities, and we saw a sharp uptick in the number of calls right after the recession hit. (Things have since calmed down.) There is no doubt that some employers are targeting pregnant women and women on flexible work arrangements. But that is not evidence that women no longer want -- or need -- to work flexibly: it's evidence that women are being targeted for doing so.
Some of that targeting is probably illegal. One story, probably apocryphal, is that when one man suggested laying off all the part-timers, a woman countered with the perky suggestion that they lay off all the disabled people. The point is that both steps may well be illegal: an employer who lays off all the part-timers will in many contexts have a layoff composed largely or exclusively of women. Not a wise move.
Is this the new "Opt Out" story? You know the one that depicts women happily "opting out" of work and heading home to care for their kids, despite the real data that many women do not and that those who do would often prefer to work part-time but were unable to do so in the all-or-nothing American workplace?
Like the "opt-out" story line, the story line of employer's recession-time cuts to work/life initiatives is misleading. The message underlying much of the current coverage is that flexible work was an expensive, feel-good accommodation that naturally disappears in a recession.
In fact, the real story is that employers with telecommuting and flexible programs that really work are finding that these new ways to work can enhance their competitive position in a recession. And that employers who unfairly target part-timers and pregnant women may well find their layoffs to be far more expensive than they thought--in legal fees.
A Peaceful Revolution is a blog about innovative ideas to strengthen America's families through public policies, business practices, and cultural change. Done in collaboration with MomsRising.org, read a new post here each week.
- Salzgitter 2008 profit down 25 percent, AP via International Herald Tribune - France.
FRANKFURT, Germany - German steelmaker and packaging company Salzgitter AG said Thursday that its full-year net profit fell by 25 percent last year, and added that it also expects lower earnings at least during the first half of 2009.
Salzgitter said it would broaden a shorter hours program for workers and cut back on investments as the global economic crisis affects demand.
Salzgitter's net profit for 2008 was down to E677 million ($914 million) from the previous year's E905 million, among other things because of higher costs for raw materials in steel production.
Earnings before interest and taxes, or operating profit, fell 21 percent in 2008, declining to E1.1 billion from E1.4 billion. However, sales for the year increased by 23 percent, climbing to E12.5 billion from E10.2 billion.
The company did not immediately provide fourth-quarter figures.
The company, based in the German town of Salzgitter, is the country's second largest steel company after ThyssenKrupp AG. In 2007, Salzgitter bought a majority in German packaging company Kloeckner-Werke AG, which specializes in drinks packaging systems.
Salzgitter did not provide a detailed 2009 outlook, but said it expected profits to be lower at least in the first half of the year.
"It is our intention to not only emerge from the imminently demanding and difficult year 2009, but also from a possibly longer downturn as a company that is both technically and financially intact," the company said in a note to shareholders.
"While there will be no hectic changes to our strategy, adjustments geared toward safeguarding intrinsic value will be made in all divisions," it added.
The company said it would take measures such as doubling the number of employees working shorter working hours to 8,000 in response to a drop in demand.
Salzgitter also said it would scale back costs by cutting about E200 million off its current investment budget, reducing it to some E850 million for the year.
Shares of Salzgitter were down 0.5 percent at E43.49 in late Frankfurt trading.
3/25/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Officials discuss further Building Department cuts, BY KRISTOFER KAROL, LivingstonDaily.com - Livingston,MI,USA.
The Livingston County Board of Commissioners is looking into further cuts in the Building Department.
During the first two months of 2009, the number of permits the building has issued is down 45 percent.
Some officials noted Wednesday that more layoffs or shorter hours could be imminent, including the loss of one electrical inspector, reduction in work hours from 35 hours a week to 30 hours a week for four clerical positions, and a reduction in hours from 35 hours to 24 hours a week for the four remaining inspectors, as well as turning the deputy building official into a part-time job.
Another option, according to Commissioner Jack LaBelle, would be to lay off inspectors. He noted while this would obviously deplete workers' income, it would be beneficial in that they would not have to pay as much for health care if unemployed since the federal government has agreed to finance 65 percent of COBRA payments this year for such individuals.
- BMW 'won't go down same road as Honda', By Jeremy Grimaldi, ThisIsWiltshire.co.uk - Swindon,England,UK.
SWINDON'S BMW plant has bucked the trend set by Honda and vowed staff will not face pay cuts.
The German car giant has guaranteed employees their full pay - breaking a string of pay cut announcements by other car manufacturers.
The announcement comes the day after Honda workers were sent letters explaining that associates would be subject to a pay cut because of poor trading conditions, which has seen car production tumble 59 per cent last month.
Since March 1 Jaguar Land Rover and Toyota have announced that all employees will either have their pay slashed by 10 per cent or have their work week cut to four days to avoid compulsory redundancies.
However, a spokeswoman for the Mini production plant in Stratton said yesterday that rumours of a pay cut at the pressing plant are unfounded - and even went one step further saying that worker's pay is safe at the current levels.
BMW spokeswoman Rebecca Baxter said: "It is business as usual.
"Any talk of pay cuts is a completely unfounded rumour.
"There are definitely no pay cuts of any sort."
She added that BMW was intent on quelling speculation that the company would follow Honda's lead and cut pay for one year.
BMW has suffered a slump in Mini sales over the past few month, suffering a 35 per cent loss since January 2008.
However, the company is still undertaking plans to release the new Mini convertible at the end of March - as Mini sales have not fallen as much as other car brands.
Last month BMW announced that 850 agency or temporary staff would go in a purge of labour, however, the company has remained committed to its full-time staff saying that no compulsory redundancies will be made.
Regardless rumblings in Swindon have persisted.
In February, a worker said that Swindon staff are becoming nervous because staff numbers have dived from 3,000 to 1,000 in five years.
Workers also voiced their displeasure at a plan to move 150 of them from Bridge End Road to the main Mini plant in Cowley, Oxford.
To make the move workers are being offered a GBP6,000 one-off payment.
But the number of employees who have taken the deal remains low.
3/24/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- CEO: St. Vincent's Infirmary Medical Center could cut up to 200 workers, AP via KFSM.com - Fort Smith,AR,USA.
LITTLE ROCK, Ark. - The CEO of St. Vincent Infirmary Medical Center in Little Rock says the hospital may cut as many as 200 workers as a national recession continues.
In a letter to employees, Peter Banko said the cuts will come by June 1. Banko says the hospital also will close its psychiatric unit for older patients, its Medicare-exempt psychiatric program and eye-surgery program by April 1.
Banko says hourly workers also have been asked to reduce their work week to 36 hours in March, while salaried employees were asked to use three paid time-off days during the month.
In the letter dated March 18, Banko says "it is very clear that this once-considered 'recession proof' industry is being deeply impacted along with every other industry in our country."
- Medibank cuts staff working hours, by Mark Metherell, Sydney Morning Herald via smh.com.au, Australia.
THE Government-owned Medibank Private health fund says it is moving 140 staff into part-time work as an efficiency measure triggered partly by the collapse in investment income that has hit private health funds.
The Community and Public Sector Union said yesterday the cut would mean shorter working hours for about 250 retail staff, but this was denied by Medibank.
The union's deputy secretary, Nadine Flood, said the changes would "result in significant cuts to take-home pay".
Medibank, Australia's biggest fund, has just announced a 5.7 per cent rise in premiums approved by the Government, and is also buoyed by about $1 billion in tax rebates paid to its members.
A Medibank spokesman, Craig Bosworth, said the fund was proposing to transfer 140 full-time equivalent positions into 135 part-time jobs, to better reflect the demand for services on its retail staff, who tend to be busiest at lunch times.
The staffing shake-up also reflected improved technology for claims management and greater use of the internet by customers.
Efficiencies were also necessary because of the big drop in revenue from the fund's investments which in previous good years have added significantly to its bottom line.
Mr Bosworth said the changes would not necessarily involve "significant" cuts to affected staff's incomes.
He said Medibank had consulted with workers about the changes.
But Ms Flood said Medibank's plan "forces full-time staff to work reduced hours or face the sack, which is a tough choice in the current economic climate".
[What's so tough about working reduced hours, especially during the age of robotics when "full-time" should have been reduced by design long ago prevent labor surplus from holding down wages?!]
The staff squeeze comes amid fears that the changes to the Medicare levy surcharge threshold will erode health fund memberships.
Ms Flood said that while the private health insurance sector faced serious challenges with the slowing economy, management should respect choices of employees, consider the financial impact on workers and delay the staffing changes.
"Medibank have just put fees up and are seeking to improve an already dominant position in terms of market share by purchasing smaller competitors."
3/23/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Skoda Auto '08 Net Profit -32%; Strong Koruna Weighs, Dow Jones (subscription) via Wall Street Journal via online.wsj.com - USA.
PRAGUE -- Car maker Skoda Auto AS, a unit of Germany's Volkswagen AG (VOW.XE), Monday posted a 32% drop in 2008 net profit as the koruna's rise against the euro exacerbated the wider downturn in car sales, and said the outlook for 2009 was uncertain.
The Czech Republic's largest exporter recorded a 10.82 billion koruna ($551.3 million) net profit for 2008, after CZK15.98 billion in 2007. It blamed foreign-exchange losses....
Late last year, the car maker temporarily cut its work week to four days as car sales plummeted in western Europe, Skoda Auto's key market....
- The Hours Of Service Rules: Myths And Facts, By American Trucking Associations, LogisticsOnline.com (press release) - Erie,PA,USA.
[Oo oo oo (quoting the 3 stooges) this should be rich! - a trucking agency takes a swing at justifying mega driving hours!... - we suspect the more they say, the worse it looks.]
Myth: The 11-hour driving limit and 34-hour restart provisions will significantly increase truck crashes and fatalities.
Facts: Since January of 2004 when the 11-hour driving limit and 34-hour restart went into effect, the large truck-involved fatal crashes fell from 4,335 (2003) to 4,190 (2007), while the number of truck miles traveled increased by 11B. The number of truck-involved fatalities has also decreased by more than 200 from 5,036 in 2003 to 4,808 in 2007. The truck-involved fatality rate (i.e., the number of fatalities divided by the miles traveled by trucks) has come down more than 10 percent and is at its lowest since the Federal Highway Administration (FHWA) began keeping records in 1975.
Operational flexibility from these provisions has also produced significant societal benefits that have lead to the betterment of drivers' lifestyles and sizable savings to motor carriers, shippers and consumers. The Federal Motor Carrier Safety Administration (FMCSA) estimated that eliminating the 11-hour driving limit and 34-hour restart would result in $2.2 billion in additional annual costs to the nation's economy.
During the five-year period the new hours of service rules have been in effect, billions of commercial motor vehicle driver hours have been recorded and hundreds of billions of miles have been traveled by trucks, proving the safety and benefit of these important provisions.
Myth: The 34-hour restart provision disregards the safety and health implications of cumulative fatigue on drivers.
Facts: FMCSA determined that the new hours of service rules through their combined effects would "not have a deleterious effect on the physical condition of the [truck] operators." Data from the Department of Labor's Bureau of Labor Statistics appear to support FMCSA's conclusion, showing that the rate of occupational injuries and illnesses in the trucking industry decreased by nearly 18 percent between 2004 and 2007.
FMCSA has repeatedly stated the need to view the various provisions of the hours of service rules, including the restart, as an integrated whole. FMCSA adopted hours of service regulations that included increased off-duty time (from 8 to 10 hours), a shorter driving window (from 15 to 14 hours and eliminated the deduction of off-duty time), an extension of the maximum daily driving limit (10 to 11 hours), a longer period of uninterrupted rest for sleeper-berth drivers (requiring 8 hours in the berth and another 2 hours off-duty), and sufficient time for two full sleep periods before restarting the workweek clock (the 34-hour restart).
In researching the driver's perspective, FMCSA learned that drivers value the 34-hour restart because it gives them more, not less, rest and time off-duty, including more time at home than the pre-2003 hours of service rules. An American Transportation Research Institute study on the impact of the new hours of service rules also found that the 34-hour restart, 10 hours off, and 11 hours of driving time are drivers' most preferred features.
Myth: The 34-hour restart will generate very long driving and on-duty times.
Facts: In the real world, this has not been the case. FMCSA found in their 2007 field study that only 27 percent of long-haul drivers were using any part of the maximum 11th driving hour. Only 8 percent of the restarts were exactly 34 hours, while 65 percent exceeded 44 hours.
As stated by FMCSA, "the longer hypothetical hours in driving and duty schedules" envisioned by critics of the 34-hour restart "requires an imaginary world with nearly perfect logistics for picking up and delivering a load."
3/22/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Berks County area companies try alternatives to layoffs - Protecting their assets, by Tony Lucia, ReadingEagle.com - Reading,PA,USA.
About every two and a half weeks during this recession, roughly 402,000 people - the equivalent of the population of Berks County - lose jobs across the United States.
So when Sharon Hines' employer, D&E Communications Inc., recently told its employees they could opt for a reduced workweek, she volunteered.
The reduced-workweek option was one of several cost-cutting measures rolled out by D&E to avoid laying off valued employees.
D&E is among local companies trying to maintain their work force and avoid layoffs, one of the first steps most companies take to trim costs in the face of declining profits.
These firms say they consider their workers an asset rather than a costly liability. And they are coming up with creative ways to avoid laying off these assets.
For about a month, Hines has worked a 34-hour, four-day schedule - six hours less than she had worked.
And she loves it.
"I really was excited," said Hines, a human resources manager with nine years at the Ephrata firm. "I was ready, at this point, to have a little more flexible schedule; to spend a little more time with my husband and my children. I still have to get the job done, but the hours work better for me personally."
Other companies are coming up with ways to save money other than cutting workers.
For example, to keep its permanent work force intact, Remcon Plastics Inc., 208 Chestnut St., cut back to a three-day workweek in January, said company President Pete Connors.
"Right around Thanksgiving, business fell off the table," said Connors, whose firm makes bulk packaging containers for food and pharmaceutical customers.
"I was so impressed with how our employees understood the situation," Connors said. "It was so encouraging to have everybody say, 'We get it.' "
Some production workers qualified for partial unemployment and others found part-time jobs in the interim, he said.
The company almost lost its long-term disability insurance because employees must work at least a 30-hour week to qualify. But Connors said his broker negotiated a temporary waiver from the insurance company, which wanted to keep Remcon's business.
Business has picked up to the point where his employees are now working four-day weeks, Connors said.
Even large employers are trying to avoid layoffs.
Carpenter Technology Corp. recently instituted several cost-savings strategies, such as intermittent department shutdowns, allowing senior production employees to volunteer for extended layoffs and not replacing employees lost through attrition.
The Spring Township-based firm has said it needs to retain its production workers to remain competitive.
That applies to newer employees, who will be more necessary in the future, as well as to senior employees with decades of expertise.
Carpenter's most recent financial statement indicated its business has been hit by the recession but that the firm remains profitable.
T. Kathleen Hanley, a senior vice president, said she does not foresee the need for layoffs, based on the firm's sales forecasts.
"Should all things remain equal, at this point in time, we don't see the need to do any formalized job reductions," Hanley said. "We will have some rolling shutdowns through the production mill. (But) that would, at this time, be the most significant action we'd be taking."
Other companies are trying to avoid layoffs by cutting costs.
D&E emphasized the importance of maintaining experienced workers last month when it rolled out a package of cost-cutting measures that averted layoffs.
In addition to the 34-hour workweek option that Hines took, the company offered a one-time retirement-payment opportunity for qualifying employees and limited pay increases for nonunion employees.
Judy Naylor, the firm's vice president of human resources, acknowledged that many firms see layoffs as the easiest thing to do.
"Everything else requires a lot of work," Naylor said, adding that some firms won't take the time or effort to look into alternatives to layoffs.
But, she said, an employee represents an investment by the employer and should be treated as such.
Providing options can benefit both the company and work force, she said.
"Two people on my team are doing (the reduced workweek) and they're very, very key to me," Naylor said. "Sometimes people are just looking for flexibility, and it pays."
Contact Tony Lucia: 610-371-5046 or email@example.com.
- Working together to cut the deficit, letter to editor by PEF Region 8 Coordinator TOM COMANZO, Albany Times Union via timesunion.com - Albany,NY,USA.
Joseph Bucci's Feb. 21 letter, "Taxing the rich, a drop in the deficit bucket," underestimates the revenue that will be raised through an income tax on the wealthiest New Yorkers and ignores the other ideas the Public Employees Federation [PEF] and other unions have advocated to help close the budget gap.
The fair share income tax proposal would raise about $6 billion a year.
The federal stimulus legislation will reduce our deficit by another $6 billion.
PEF also has advocated a three-year consultant reduction plan that would save $730 million over that period, an overtime reduction plan that would save another $160 million a year, a plan to reduce the cost of prescription drugs to the state that would save $100 million a year and the closure of corporate tax loopholes that would generate $300 million a year.
PEF has also asked the state to implement the voluntary reduction in work week program allowed under our contract. That could save another $100 million a year.
Working together, we can reduce the state deficit without making middle-class families pay more in taxes or lose $2,800 a year in salary.
3/21/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Dean Baker's "Third Round", by Tom "The Sandwichman" Walker, EconoSpeak.blogspot.com .
Along with Jamie Galbraith, Dean Baker also believes "the economic crisis, and its solution, are bigger than you think." In a report issued Tuesday, Baker "makes the case for a third stimulus package to in the face of economic indicators signaling that the economy is in a deeper downturn than was expected based on previous projections."
To get money into the economy effectively and quickly, the report proposes a stimulus package consisting, in part, of two tax credits: an employer tax credit that would extend health care coverage and another per worker credit for employers increasing the amount of paid time off.
Excerpt from The Housing Crash Recession and the Case for a Third Stimulus after the jump.
The other obvious mechanism for quickly boosting demand is employer tax credits for giving workers paid time off. The paid time off can take a variety of forms, such as paid family leave, paid sick days, paid vacation days or a shorter workweek. The idea is that the government would give an employer a tax credit of up to $2,500 per worker per year to cover the cost of a reduction in work hours of up to 10 percent of their work time.
This tax credit, like the health care tax credit, could be implemented with very little lead time and little bureaucracy. To qualify, an employer would need to post on a public website the reduction in paid work time that they have put in place. Since workers could see the work-time reduction claimed by their employer, they would be able to verify that the policy has in fact been put into place. The arithmetic on this is straightforward. Suppose that employers of 60 million workers reduce their work time through family leave, sick days, or shorter hours by an average of 5 percent, at an average cost of $2,000 per worker. Since demand will not have changed (workers are getting paid just as much as they had previously), employers will in principle want to hire an additional 3 million workers to make up for the lost labor hours. This would imply 3 million new jobs, or jobs saved (in many cases, it may prevent layoffs that would have taken place otherwise), for an expenditure of $120 billion.
The great virtue of this sort of tax credit is that it is both boosting GDP and also increasing the number of jobs for every level of GDP. If everyone in the economy worked 5 percent fewer hours, and we had the same level of output, then we would have 5 percent more people working. For this reason, it is the most efficient mechanism for bringing the economy back to full employment.
- Hunzeker: Cut $25 million from budget, By CARL MARIO NUDI - firstname.lastname@example.org, 3/20 Bradenton Herald - FL, United States.
BRADENTON - The Manatee County administrator told the board of commissioners to expect to see a general government budget of about $25 million less than last year.
At a work session meeting Thursday, County Administrator Ed Hunzeker presented the commissioners with a list of guidelines he will use in drafting the 2009-10 budget and said with the expected revenue shortfall, they will have to make some tough decisions on program cuts.
"It's going to be much more difficult than even the last two years," Hunzeker said. "The last two years the cuts were the low hanging fruit."
He said over the last two years, the county budget was reduced by about $65 million.
"It's going to be more painful and contentious this year," Hunzeker said. "Nobody wants their program cut."
The draft budget will be presented to the commission in June. Public safety services can expect reductions, and the "quality of life," or health and welfare programs will be subject to the largest trimming, he said.
"The quality of life issues are the things that are going to suffer," Hunzeker said. "You will need to decide issues such as: Is public service more important than quality of life, or is quality of life more important that social services."
Commission Chairwoman Gwen Brown said it was a matter of how one defines "quality of life."
"All those things you mentioned are quality of life," Brown said.
The administrator said an example would be operating expenses of the county park system.
"When the revenues were greater than the year before the county got involved in the park business," he said, referring to G.T. Bray park as an example.
Commissioner Joe McClash suggested the county develop its volunteer program to help defray costs at the county parks and preserves.
McClash also said the county needs to look at pay decreases.
Hunzeker said the budget would contain few pay increases and the decreases may be handled with a reduced work week schedule.
Commissioner Carol Whitmore asked Hunzeker to look at raising the employee contribution amount they pay for health care insurance.
Some of the other items in Hunzeker's list of guidelines included studying alternative fund sources, such as a stormwater fee or business license fees.
There also may be some tax increases to offset new state mandates or to preserve public safety services.
3/20/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- A look at economic developments around the globe, AP via Forbes - NY,USA.
A look at economic developments and stock market activity around the world Friday:
BRUSSELS - EU leaders pushed to double the International Monetary Fund's lending to $500 billion but steered clear of any big new government spending plans to fight the global economic slowdown. Struggling to balance mounting debt and joblessness, the 27-nation bloc has steadily refused to consider new stimulus, focusing instead on plugging holes in the worldwide financial system that caused the credit crisis. The plan put forth reflects the EU's difference of opinion with President Barack Obama's new U.S. administration over how best to resolve the economic crisis and may make for tough negotiations at an April 2 summit of the Group of 20 rich and developing nations.
In other news, official Eurostat statistics showed industrial activity in Europe continued to plunge in January, as the economic crisis caused manufacturers to shut down plants, cut work hours, and delay investments. From December to January, industrial production shrank 3.5 percent across the 16 nations that share the euro currency and 2.9 percent in the wider 27-member European Union.
Separately, European steel makers said that one in six workers have lost their jobs or are working shorter hours as demand for steel has collapsed. Eurofer - a group representing ArcelorMittal SA, Corus and ThyssenKrupp AG - said some 72,000 jobs, or 17 percent of the European Union's 440,000-strong steel work force, have been hit by the downturn. It says it is asking EU governments to boost financing for steel customers by giving more loans, guarantees and credit insurance.
BEIJING - Stocks wavered in Asia. Hong Kong's Hang Seng led the region's declines, falling 2.3 percent to 12,833.51, while Australia's benchmark S&P/ASX 200 stock index lost 0.4 percent to 3,465.8. Taiwan's benchmark sagged 1.5 percent. However, the Shanghai Composite index rose 0.7 percent to 2,281.09 as higher commodity prices lifted metal and mining stocks. For the week, the index rose 7.2 percent. South Korea's Kospi climbed 0.8 percent and markets in the Philippines and Thailand also rose.
MILAN - The Italian bank Intesa SanPaolo said it will seek 4 billion euros ($5.42 billion) in state aid, the third Italian bank to do so, as it reported an 11 percent drop in 2008 earnings. The government has earmarked 10 billion euros to 12 billion euros to buy convertible bonds from banks to help shore up their capital and ensure credit to small and medium businesses that power Europe's fourth-largest economy. Both Unicredit and Banco Popolare have said they would participate in such a plan.
Italian stocks ended 1.4 percent higher at 14,948.
LONDON - The British government allowed Northern Rock to continue making risky loans for another six months after it became the first bank to receive a state bailout, a report by the National Audit Office, a public spending watchdog, revealed. It also said the Treasury knew about shortcomings in banking oversight as far back as 2004 - but did not make the issue a priority.
Britain's FTSE 100 closed up 0.7 percent at 3,842.85.
BERLIN - Germany's economy shows no signs of picking up anytime soon and unemployment will likely jump as growth slows, the Finance Ministry said. The ministry confirmed in its monthly report that the economy had shrunk by 2.1 percent in the last quarter of 2008 - its third consecutive drop - and it projected a further contraction for the first quarter of 2009.
Separately, employees at German carmaker Adam Opel GmbH, a unit of struggling General Motors Corp., said they wanted to join Opel dealers in buying a stake in the company. Klaus Franz, the Opel workers' representative, said employees are in favor of joining dealers in an attempt to buy a 25 percent stake, a blocking minority which would give them a say in company decisions.
Germany's DAX added 0.5 percent to 2,791.14, while elsewhere in Europe France's CAC 40 climbed 0.6 percent to 4,068.74.
MEXICO CITY - Mexico's central bank surprised analysts and slashed interest rates by three-quarters of a point to 6.75 percent. The Bank of Mexico argued that the worsening global economic crisis, especially in the industrialized world, "is significantly affecting financial markets, capital flows and the development of emerging economies."
Mexican shares inched down 0.7 percent to 19,456 in afternoon trading.
GENEVA - The head of the African Development Bank, Donald Kaberuka, appealed to leading industrialized nations to include Africa in their plans to stem the global economic downturn. He said the continent has been hard hit by the world's financial crisis as demand for its natural resources and products dries up.
STOCKHOLM - Mobile phone maker Sony Ericsson warned it expects to post a first-quarter pretax loss as it continues to be hurt by falling consumer demand amid the global financial crisis. In a brief statement, the Sony Corp. and LM Ericsson AB joint venture also said it is taking a hit from distributors and retailers reducing their inventories. It predicted a first-quarter loss of between 340 million euros and 390 million euros ($465 million to $533 million).
The Stockholm 30 index dropped 2.7 percent to clost at 661.59.
ATHENS, Greece - Greek Prime Minister Costas Karamanlis said he could not rule out further emergency tax measures to deal with the economic downturn. The Finance Ministry this week announced a one-off tax payment of 1,000-5,000 euros ($1,350-6,775) for wealthier Greeks and a salary freeze for public servants with a gross monthly salary of more than 1,700 euros ($2,230). Karamanlis said those measures would only be effect this year.
- Stanfield's going to four-day workweek, By MARY ELLEN MacINTYRE ( mmacintyre(at)herald.ca ), Chronicle Herald, thechronicleherald.ca, Halifax?,NovaScotia.
TRURO - In a recession, there is a limit to the amount of underwear a consumer will buy.
However, as far as Stanfield's is concerned, that doesn't translate into layoffs at this family-owned business.
Company president Jon Stanfield said Thursday the company has to cut back on production a bit, but it's not about to send a bunch of fully trained workers out on the streets.
"Right now, there is a softness at the retail level and a downturn in consumer spending, so we can't expect to keep producing the same quantity," said Mr. Stanfield.
"However, good employees are key to business and it is important to keep people employed and keep people making a salary.
"The economy will change and investors will return and we'll be ready. Then we don't have to go back into the market, hire new employees and train them because we'll have them still here."
The company has notified its workers that a reduced workweek will begin probably as early as next month.
Mr. Stanfield would not reveal how many people work at the plant, but the workforce is believed to be over 400. He suggested that 50 and 60 per cent of his workers will go to a four-day workweek.
He said the company would pay its workers for the four days of work and Service Canada would supplement their income by paying a portion of the 20 per cent gap.
"So an employee would be getting, altogether, about 92 per cent of their normal income," he said.
"The Service Canada program is a good one and we've used it in the past. It gives a company the ability to attempt to keep its employees.
"It helps us to send a message to our employees, and that is that you're important to us."
3/19/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- JUST IN: City of Toledo begins 36-hour work week, WTOL - Toledo,OH,USA.
This change to a 36-hour work week takes effect March 20 for all exempt employees. Basically, that means employees are not in unions. Mayor [Carty] Finkbeiner says the move should save $500,000.
The employee's paychecks will go down, but they'll keep benefits. Mayor Finkbeiner says it was done to avoid laying off employees.
A press release from the City of Toledo
In the interest of balancing the City of Toledo's budget, beginning Friday, March 20, all exempt employees will drop to a 36-hour work week. This reduced schedule amounts to a 10% salary cut, and will save the City's General Fund $500,000 for the remainder of 2009. Approximately 100 General Fund employees will be affected by the reduced work schedule. Each Department director will be responsible for creating a 36-hour schedule for their employees to ensure City services are not affected by this change.
Today, Mayor Finkbeiner released the following statement: "These economically challenging times require all of us to make sacrifices. The City of Toledo's exempt employees understand the severity of our budget crisis, and I thank them for their cooperation. All City of Toledo employees must know we have but two choices -- each person sacrifice a bit, so that most of our employees are able to continue to work, or lay-off a significant number of employees. I urge that there be modest sacrifices across the board, so that we are not forced to make significant additional personnel cuts."
- Cut Labor Costs Without Layoffs: 28 Ways Health Clubs, Corporate Wellness Programs, Wellness Centers And Healthcare Practices Can Cut Labor Costs Without Layoffs, PRWEB via Emediawire (press release) - Ferndale,WA,USA.
Twenty-eight "no-layoff" techniques that cut labor costs at health and wellness businesses by 20% or more while keeping valuable health, fitness and wellness professionals.
Dallas, TX -- "You're laying me off? Actually, no." Successful wellness centers, health clubs, corporate wellness programs and conventional and CAM healthcare practices avoid disruptive layoffs whenever possible. Instead, they use The Radial Group's free guide Cut Labor Costs Without Layoffs: A 28-Point Checklist For Health & Wellness Businesses to cut labor costs by 20% or even more while keeping valuable health and wellness professionals.
The Radial Group provides sales, marketing and strategy advice to health and wellness businesses including corporate wellness programs, wellness centers, health clubs, nutrition and weight loss programs, and conventional, complementary and alternative (CAM) healthcare practices.
Win your employees' support by sharing the truth about how your wellness business is doing. Then they'll appreciate your efforts to save their jobs until business improves. And they'd rather keep their jobs - even for less pay or fewer hours - than face unemployment in this economy.
Leslie Nolen, Radial's president, recommends that health & wellness businesses:
She advises health clubs, corporate wellness programs, nutrition and weight loss programs, wellness centers and conventional and CAM medical practices to start with these five tips to cut labor costs without laying off employees:
Health & Wellness Business Tip #1: Shorten your workweek
Switch to a four-day workweek for all employees, including health coaches, personal trainers, dietitians, fitness instructors, and clinical staff.
You'll see an immediate drop in salaries and wages of at least 20% for full-time employees.
Health & Wellness Business Tip #2: Cut senior management pay
Cut senior management pay temporarily. Sales and marketing execs, programming directors, club general managers, and other executives and top managers usually earn several times more than front-line employees. So even a 10 - 15% cut adds up fast.
Health & Wellness Business Tip #3: Eliminate extras
Cut out freebies, perks and extras. Eliminate free logo apparel for trainers, health coaches, fitness instructors, dietitians and other professional staff and drop cellphone reimbursement, company-paid vehicles and company-paid meals and entertainment.
Trimming these expenses can save at least 5 - 10%.
Health & Wellness Business Tip #4: Rearrange work assignments
Shift work to underutilized staff - even if it's not in their normal department. Yes, managers can lead classes or sell. Yes, fitness floor staff and health coaches can clean locker rooms. Yes, trainers can lead group fitness classes or restock shelves.
Health & Wellness Business Tip #5: Think outside the box.
Job-sharing, flexible work schedules, and telecommuting all give you ways to get more productivity at less cost from experienced people. Work-from-home arrangements, for example, can produce substantial facility cost savings....
Get your free guide Cut Labor Costs Without Layoffs: A 28-Point Checklist For Health & Wellness Businesses and you'll also get a totally free subscription to The Health & Wellness Business Advisor, weekly sales, marketing and management tips specifically for health and wellness businesses.
3/18/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Economy prompts diabetes group to close for 3 days, By Stephanie Sanchez, El Paso Times - El Paso,TX,USA.
EL PASO -- Diabetics hoping to receive services at the El Paso Diabetes Association will be met with a chain-locked gate and a closed office until Thursday.
All nine of the association's employees, ranging from a receptionist to a diabetes education specialist, have been furloughed for the first three days of the workweek. The association's office will be closed while the employees are out, said Henry Brutus, the executive director.
[Et tu, Brute?!]
Brutus said El Paso Diabetes Association board members voted Friday to give employees three unpaid days off. The association's board president, Dr. Tamis Bright, and other board members could not be reached for comment.
The association had a deficit of about $29,000 last year, but the cut in spending was because of the weak economy, Brutus said.
"Typically every year, our first quarter is our worst quarter for the year," he said. "Given the current economy, we felt we needed to mitigate that somewhat so we wouldn't end up with a huge loss in the first quarter."
The association makes money through grants and fundraisers, Brutus said.
On Feb. 1, it had a 2009 Night of Hope Ball to raise money. The event raised about $20,000 through corporate sponsorships and a silent auction, association members said.
In addition, the association will have its annual Diabetes Awareness Walk on March 28. The event has helped raised up to $3,000 in previous years. The walk drew about 300 people and about 400 in 2008. The association has said the money pays for programs for children and adults.
Last year, the association served more than 13,000 people. Between four and 12 people who are uninsured and meet the federal poverty guideline receive free insulin from the association the first week of each month.
Brutus said the distribution of insulin would not be affected by the furloughs. Most services, such as classes and group meetings, have been rescheduled, he said.
"We are facing financial difficulties, as everyone else is," Brutus said. "But there is nothing abnormal or irregular about our activities."
Stephanie Sanchez may be reached at email@example.com; 546-6137.
- Actuant Q2 profit sinks; sees weak Q3; shares fall, by Dhanya Thoppil, Reuters - USA.
Diversified industrial manufacturer Actuant Corp (ATU.N) posted an 85 percent drop in quarterly profit, hurt by weaker end-market demand and extended customer shut downs, and forecast weak third-quarter results, sending its shares to a six-year low.
It also cut its 2009 outlook as it does not see a rebound in consumer or industrial demand by the back half of the year.
However, Wachovia Capital Markets analyst Wendy Caplan said investors could be well rewarded to aggressively buy once the noise settles as she sees roughly half the company's profit to be "early cycle."
The analyst, who has an "outperform" rating on the stock, was also positive on Actuant's cost management.
Actuant, whose products range from plugs and sockets to precision control systems for automobiles, has been cutting costs by reducing headcount, consolidating plants and establishing short work-week schedules to remain profitable in a slowing U.S. economy.
Actuant cut about 10 percent of its workforce in the second quarter. It had about 7,500 employees at Aug. 31, 2008.
"An assembler, hence low working capital user, Actuant is a superb cash flow generator, that uses its cash to deleverage and acquire good fit, low risk bolt-ons," Caplan wrote in a note to clients.
Working capital management and controlled capital expenses could continue to provide cash for ongoing debt reduction, Caplan said. The company had over $175 million of available liquidity as of Feb. 28.
"With $28 million in free cash flow generated in the second quarter, only $6 million in debt repayments this year, and $175 million available, it is managing well."
Wachovia Capital Markets and/or its affiliates have beneficial ownership of 1 percent or more of any class of Actuant shares.
BLEAK RESULTS, OUTLOOK
Second-quarter net income fell to $3.2 million, or 6 cents a share, compared with $22.2 million, or 35 cents a share, a year ago.
Excluding restructuring charges, it earned 9 cents a share. Sales for the quarter came in at about $300 million.
Analysts were looking for a profit of 14 cents a share, before special items, on revenue of $315.6 million, according to Reuters Estimates.
The company now sees 2009 earnings of 85 cents to $1.00 a share, on revenue of about $1.30 billion. It had previously forecast earnings of $1.60 to $1.80 a share, on revenue of $1.50 billion to $1.55 billion.
Analysts were expecting earnings of $1.21 a share, before items, on sales of $1.40 billion.
Shares of the company were down almost 6 percent at $7.91 in morning trade on the New York Stock Exchange. They had earlier touched a low of $7.42.
(Reporting by Dhanya Ann Thoppil in Bangalore; Editing by Himani Sarkar)
3/17/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Lufthansa Considers Reduced Work Week, By Darren Shannon, Aviation Week - New York,NY,USA.
Lufthansa could reduce working hours for 1,000 Germany-based non-hub service and support staff to mitigate a continued drop in demand that saw February's traffic fall 11.1% year-on-year on a near 7% cut in capacity.
The reduced work week is currently a concept, but details are being negotiated with the carrier's unions. A definitive plan could be proposed in weeks.
Lufthansa has already implemented a hiring freeze at its passenger operations, and a major slump in airfreight demand has resulted in a "short-time" working week for about 2,600 staff employed at Lufthansa Cargo (DAILY, Feb. 4).
"Our objective is to safeguard jobs amid the global economic crisis. To that end, we must adapt our services and capacities to match the ongoing demand situation," said the carrier's Executive VP Services and Human Resources Karl Ulrich Garnadt in a release.
"Short time allows us to compensate flexibly for declining demand without dramatic burdens on the staff," he added.
Lufthansa said no staff at the airline's Frankfurt or Munich hubs will be affected by the proposed changes, and that those working a reduced work schedule will retain 90% of their net pay.
The company employs about 31,000 staff for passenger operations.
This announcement coincided with the release of a February traffic report that recorded an 11.1% dip in Lufthansa's traffic, a 10.5% year-on-year decline in the German carrier's passenger numbers, and a near 10% fall in revenue passenger kilometers for all Lufthansa Group passenger operations.
Load factors fell in every major segment in February, notably in the Americas, where loads dropped 3.2 percentage points despite a 9.4% cut in capacity. Consolidated loads for the month declined 3.3 points to 72.1% on 5.7% fewer available seat kilometers.
- California unemployment statistics hide full impact of recession, World Socialist Web Site - Oak Park,MI,USA.
..."Now we don't eat the same"
Maria Gomez and Alejandro Gonzalez work at a Golden Tiger Chinese food
factory. The factory has cut the workweek to four days. Maria has worked there for about 20 years. Two of her sons, 21 and 26, live with her and her disabled husband. She agreed to be interviewed at a bus stop near her job.
Maria said that so far, the company hasn't laid off anybody. "Oh no, but things are very slow. There are about 300 workers in two shifts." Instead of layoffs, the company has cut the workweek down to four days.
Asked about how the family is doing, she said, "I myself, I'm not making enough to pay the rent or the bills. You have to deprive yourself of buying things. We work at different places, my two sons I, and my husband doesn't work. He's disabled, and gets money from disability. They give him very little to live on.
"We have to put our checks together. People today have to not buy lots of things in order to pay the rent. I worry about the rent. I have to pay the rent so they don't throw me out. Now we don't eat the same. We have to eat nothing but vegetables. There are lots of things that we like to eat but we can't buy. Now we don't buy so much meat. Once a week we eat chicken."
Talk turned to the causes of the crisis. "So much is spent on the wars in Iraq and Afghanistan," she observed. "What do I think of the war? Well it's not good. Why are they there? You know why I say that? It is because I have another son in Iraq. What do they have them there for? Nothing! Nothing, except to get killed!"
Nonetheless, Maria has faith in the Obama administration: "I think that he's going to take us forward. We hope so. I am 100 percent sure that he's going to take us forward. That's why we voted for him."
The WSWS pointed out that Obama hasn't stopped the war. Maria rejoined, "Because he can't stop it all at once, but he's going to stop it. You know well he's not going to say, 'Stop now!' He's going to stop it in 2010. Let's see, if we get there."
The conversation then returned to the economy, specifically to the stimulus plan. Did she expect that it is going to help? "Only if they use it well; if they know how to administer it. Because if the money only goes to the rich...many people have lost their houses; it doesn't help them. Yes, to the banks and the banks don't loan money to people. What happens is that people lose their homes."...
3/16/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- [How deep in the Dark Ages are our medicos?]
Accepting the Risks in Creating Confident Doctors, By Dr. RICHARD A. FRIEDMAN, New York Times - United States.
What does it take to make a medical expert? Practice, practice, practice. And, unfortunately, some error along the way.
Patients instinctively know this, which explains the near universal preference for a seasoned doctor over a freshly minted one. I have yet to hear a patient clamor to be treated by a young resident.
Medical educators are keenly aware of it, too, and of a conflict at the heart of medical training: what may be best for making a skilled, independent-thinking doctor may not always be best for patient comfort or safety.
How, for example, can an inexperienced psychiatry resident learn how to do empathetic but rigorous interviewing to assess patients' risk of harming themselves or others, without leaving some patients feeling misunderstood or badly treated? How can a doctor become expert at using psychotropic drugs or doing psychotherapy without making mistakes along the way?
Just as we want psychiatrists in training to become confident and knowledgeable, we also have to protect patients from the errors that result from their inexperience.
But one day, our residents will leave the protective cocoon of training and go out on their own. Have we struck the right balance among education and training and patient safety to produce psychiatrists who can function independently? I'm not sure we have.
Late one night not long ago, a senior resident called me to the emergency room. The patient, who was well known to this resident, was a young woman with borderline personality disorder who had superficially cut her wrists after an argument with her boyfriend - something she had done numerous times before.
The patient almost immediately regretted her behavior. She never had any serious suicidal intent; she was just enraged with the boyfriend.
The doctor was just two months shy of completing her residency, and evaluating a patient's risk of harm to self or others is a critical skill that is taught early and often to psychiatric residents. She knew perfectly well that the patient was prone to dramatic gestures, but not to suicide.
Why, then, was she calling me to ask about such a basic issue? Despite having all the knowledge about risk at her fingertips, she didn't feel confident in her judgment.
She is hardly alone, of course. I have received more phone calls from recent graduates in the past several years than I can ever recall. While I can't pretend this is a representative survey, many of my colleagues have noticed the same trend. And the questions, like my resident's, are basic ones: when a patient should be hospitalized, how far to push a medication.
Also, more graduates are reaching out to me to ask for extra supervision. Almost always, they "know" what they are doing, but don't feel confident about it.
The fault, I believe, lies with medical educators like me. In the pursuit of patient safety, we have deliberately prevented residents from acting independently on their own judgment in situations where a patient poses a theoretical risk.
The situation reflects a series of reforms that began in the 1980s with limits on residents' work hours. More recently, the Accreditation Council of Graduate Medical Education set a maximum workweek of 80 hours for residents, with a maximum shift of 30 hours. And in 2008, the Institute of Medicine recommended further limiting the maximum shift to 16 hours.
[Welcome to the 'dark Satanic mills' of American 'medicine' - physicians, heal yourselves!]
Don't get me wrong. I'm all for minimizing risk and medical error. And we want regulatory oversight and supervision to be most stringent where the stakes are highest, as they are in an emergency room.
Still, there are no reliable national data that these regulatory changes have had a significant impact on preventable medical error or patient mortality rates. And I think there is a cost to the development of professional identity of young doctors. It is hard to feel confident and independent unless you are given ample opportunity to stand on your own - and risk making a mistake.
The fact is that all physicians in training pose an inherent risk to patients. We should do everything we can to minimize this risk but recognize that it may impair physicians' self-confidence.
If the changes in residency training are shown to enhance patient safety - and that is a big if - they will certainly be worth it. And who knows: it might even shift the stereotype of the omnipotent physician to a more humble one.
Just don't be surprised if your doctor seems a little more hesitant and uncertain than you might like.
Richard A. Friedman is a professor of psychiatry at Weill Cornell Medical College.
- [And now, a couple of gals debating shorter hours - first, for the nay's, a gal discussing color options for repainting the interior of the last lifeboat on the Titanic -]
Shortened Work Week Is Risky - And Not Realistic, by Amanda McGowan, Associate Editor, IMPO, Product Design & Development via pddnet.com - Rockaway,NJ,USA.
[Ah, what is it about "no other option" that she finds "not realistic"?]
These days, many employers face no other option but to cut labor costs to keep the business afloat. After reading about companies shortening the work week to 24-32 hours, I initially thought it seemed like a great, flexible alternative for companies to work around full-blown layoffs.
Better to cut hours and wages for a while than to cut jobs altogether, right?
After thinking about it a little more, though, I realized the consequences of shortening employees' hours makes the alternative [ie: THIS alternative?!] far too risky for most companies to actually implement.
[Again, what is it about "no other option" that she doesn't understand?]
Going to a 24-hour work week means walking a fine line between flexibility and insecurity for your associates, and realistically, it's not a strategy that will keep talent around your plant.
[Except possibly during a deepening recession when "around your plant" is the only place where there's anything remotely resembling A JOB?!?]
The article reports that at companies cutting employees' hours to a 24-hour work week, it also meant a 40 percent reduction in pay and, potentially, a loss of benefits. Sure, this might not be a problem for some - for example, those who are covered under their spouse's insurance anyway. But others truly depend on that full-time pay and security of benefits, losing either or both of those is a big problem.
Personally, if my pay was cut 40 percent, I'd need another part time job to make ends meet. If I lost my benefits, too - I'd definitely be looking for a whole new job altogether.
What's more, a shortened work week will inevitably hinder productivity and efficiency of any operation.
[Another non-inevitable "inevitability" - Juliet Schor and Ben Hunnicutt both report on numerous cases of increased productivity and efficiency when hours are cut.]
A woman interviewed in the article discussed how difficult it was for her to adjust to her shortened work week. She said since she just hadn't "hit a stride" since her hours were reduced, and she had a hard time adjusting to waiting days between shifts to get work done. In the end, disrupting the routines of your workers is going to take its toll on the quality of work they do as individuals, and as a team.
[No, only on some of your workers. Others, like single parents or anyone with a life, for example, are going to love shorter hours, especially if pay isn't cut.]
In these economic times, layoffs may be inevitable.
[She's been talking about a widespread alternative to layoffs from the beginning of the article - eight paragraphs already - and suddenly, "layoffs may be inevitable." Is there brain damage here?]
It's a tough situation for all involved. When deciding how to handle it, companies need to look at what will be best for the majority of their associates, and ultimately, what is best for the business.
[Now here are some brilliant original management ideas right here, Clem - check it out!]
When things do start to turn around, and business starts to boom again, you want to be ready with the best talent you have. If you cut their hours and wages in half, there's no telling where they will be when that time comes.
[There'll be a helluva lot more 'them' a hellluva lot closer than if you lay them off completely!]
Arguably, a company opting for the shortened work week will need to cut a larger number of employees' work weeks, and subsequently, their wages, than they would to just layoff a few associates altogether. Cutting wages, benefits and hours is going to send your associates looking elsewhere [IF there's anywhere else to look], and when [and IF] things do turn around, your talent will be gone.
[No, when you've been loyal to all of them, they're more likely to be loyal to you.]
Most companies are better off letting go of a few individuals and waiting it out with the rest - while providing them with their full pay, benefits, and work weeks. It might not be the most flexible answer, but it is the most realistic.
[Not really, because it's the most traumatic - the survivors are all wondering who's next, and having deactivated a few employee-consumers, you're raising the odds you'll have to lay off a few more, and a few more.... And would she say the same thing about medical insurance as she's saying about this kind of job insurance? Better to let a few people incur bankrupting medical bills than everyone pay a little? Laying a few off throws the whole burden of the recession on the few, who then cut their spending as much as they can, and scares the survivors so that they cut back too. If everyone sacrifices together, the overall burden - and spending cuts - are minimized.]
What's your take? Email firstname.lastname@example.org
- [Now, for the aye's, and somewhat more tentatively -]
A "Decent" Wage Cut?, by Anna Wells, Editor, IMPO, Product Design & Development via pddnet.com - Rockaway,NJ,USA.
Looking at a utopian outcome, of course we'd all like to keep our jobs. In fact, if we're making a brief stop-off in dreamland here, I'd like a raise. And an extra week of vacation.
But practically speaking, things are tight in the ledgers of most businesses.
The New York Times recently ran an article about an alternative to layoffs that was gaining some traction as of late - the shorter work week. In the article, reporters interviewed a sample group of those who were contending with reduced hours, typically anywhere from 24 to 32 per week. The shorter shifts came without a reduction in benefits.
Some of those interviewed found the shorter work week more difficult than others. One woman explained that, when the company she worked for asked for volunteers, she took the cut to help out her department and the company.
Not long after, she realized the pay cut was tougher to contend with than she had imagined. Yet others - mostly those in two income families - discovered that the shorter week was a great way to keep their current jobs and benefits, but spend more time with their families than they could at 40 hours. More time at home can also mean fewer transportation costs and less childcare.
I'm not suggesting that a shorter work week is the solution. What I am saying is, it's the idea of flexibility that bears consideration.
In my mind, flexibility is the bridge to compromise. While employee wage reductions are far from ideal, it's better than the potential alternative - job cuts. If a company can keep its employees in part time positions without cutting their benefits, it might be a legitimately viable alternative to full headcount reductions.
Considering the housing market, the realistic possibilities for relocation are not as easy as they once were. Being saddled with a mortgage on a house that could take months (years?) to sell means the stakes have changed - and if it were me, I'd certainly take a shorter work week with full benefits over the prospect of losing my job entirely.
From a business perspective, these companies are doing the best they can to retain their talent and sending a message to employees - we're a cohesive unit, and are not going to go down without a fight. Headcount reduction often signifies a last-ditch effort to remain financially buoyant. The shorter work week might serve as a business's acknowledgement of this situation as temporary. Keeping your workforce at the ready for stronger order cycles means an expectation of better business, and recognition of the talent it will take to manage the impending increase in production; between associates and their employees, it's a mutual exchange of faith.
While I'm certainly not advocating worker wage reductions, I think there is something to be said for a struggling company taking a creative approach to employee relations. If there were a simple answer here, I'd love to know.
What's your take? Email email@example.com
3/15/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Japan: Labor Think Tank Says Shorter Work Hours Can Create 4.53 Million Jobs, by Akahata, Monthly Review via mrzine.monthlyreview.org - Herndon,VA,USA
The Labor Movement Research Institute (Rodo Soken) of Japan says that the strict application of labor laws and regulations and the shortening of work hours would create 4.53 million jobs.
Rodo Soken, which has close working relations with the National Confederation of Trade Unions (Zenroren), earlier estimated that 2.7 million jobs would be created by simply eliminating unpaid overtime and encouraging workers to use all their paid holidays.
If Japan established a 38-hour workweek, as in Europe, additional 1.8 million jobs would be created, which would be feasible if just 4.11 percent of 403 trillion yen, which corporations had amassed in their internal reserves (as of the end of 2007), were used.
Rodo Soken also calls for the prevention of mass layoffs by forcing corporations to use their internal reserves. It says that corporations should offer full-time positions to all temporary workers after three years of service.
The labor think tank also calls on the national and local governments to compel companies to comply with the existing laws and regulations, to provide full-time positions to the public-sector contingent workers, and to enact a law on public contracts that will ensure living wages.
Rodo Soken stresses that a fundamental revision of the Temporary Staffing Services Law and a raise in the minimum wage are essential to securing stable employment. It is also necessary to improve the unemployment insurance system and the public safety net and to establish a public project for the relief of the unemployed.
This article was published by Akahata on 7 March 2009. See, also, the full text of Rodo Soken's proposal: Emergency Proposal for Regulation of Layoffs, Unemployment Insurance, and Job Creation, 5 March 2009 (available in Japanese only).
- Recession offers potential for more work-life balance, By Shannon Proudfoot, Canwest News Service via Canada.com - Don Mills,Ontario,Canada.
Finally, a potential upside to the downturn.
In past recessions, employers instituted shorter work hours to cut costs and save jobs, a historian says, suggesting this economic crisis could leave people with more time for life outside of work - albeit with a smaller paycheque.
"We have been selling off our leisure over the last 30 years," says Benjamin Hunnicutt, a professor of leisure studies at the University of Iowa. "Is it possible to redefine progress as not only increased consumption and a growing economy, but also increased free time?"
During the Great Depression in the 1930s, Kellogg's instituted a six-hour workday in its plants to take up the slack of too many people and not enough jobs, he says. Within two years, workers were accomplishing as much in six hours as they had in eight because they were less tired and more efficient, he says, and the policy was so popular - even with its accompanying wage reduction - that remnants lasted into the 1980s.
"The adjustments workers make are for the most part positive," says Hunnicutt, who will present his research on Monday in a lecture series at the University of Waterloo. "They will lose some wages, of course, but in return they have extra time for family and community."
In some cases, extra time compensates for lost money, says Donna Lero, Jarislowsky chair in families and work at the University of Guelph. Shorter work hours could mean reduced childcare and commuting costs, she says, as well as more time to care for aging parents and flexibility to negotiate household tasks with partners.
"The trick is to avoid one-size-fits-all thinking and think about how this will work for some workers better than others," she says. "If some of these options like a shorter workweek come with reduced wages, there will be some employees who, although they might like to take advantage of it, cannot."
France is seen as a leader in this area after instituting shorter workweeks in the mid-90s, she says, while Finland is known for "flexicurity" - offering employers and workers a satisfying combination of flexibility and security.
On the other hand, news of temporary shutdowns at General Motors, Ford and Chrysler plants in Canada was met with consternation in recent months, and the "Rae days" of unpaid leave forced on Ontario civil servants by the NDP government in the mid-90s is still deeply reviled.
[by some - and probably not a majority...]
Hunnicutt hopes that rather than forcing work hour reductions on the unwilling, this downturn inspires a re-evaluation of work-life balance.
Throughout the nineteenth and early twentieth centuries, work hours declined dramatically in industrialized Western nations, he says, with one scholar in the 1930s offering the sunny prediction that people would be working just three hours a day by the 1980s.
"Progress was defined both as increasing wealth as well as increasing free time - the good things in life and more time to enjoy them," he says.
Then consumerism kicked in, Hunnicutt says, encouraging consumption and discouraging leisure in order to pay for it. Now, he believes our identities are so entwined with our work that leisure time is seen as a frill or worse - a daunting stretch of nothingness that forces us to face uncomfortable questions about who we are when we're not yoked to our jobs.
"The security of work gives us that meaning, that identity," he says. "Historically, what has happened is that we'll move heaven and Earth to save our belief of work as the centre of life and our suspicion that leisure represents something trivial."
3/14/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Courts cut out Fridays - State courts are moving to four-day work weeks to help take some sting out of the budget deficit - The shortened week means big money back, By SAMANTHA BATES, 3/13 EastOregonian.info (subscription) via EOnow.com - OR,USA.
If you have business with the state courts, don't go on a Friday.
Starting today, state courts only will be open Monday through Thursday, which includes courts in Umatilla and Morrow counties. That means today and every coming Friday, the second floors of the Pendleton and Hermiston courthouses virtually will be deserted.
It also means about 40 state court employees in Hermiston and Pendleton have to shift to a 32-hour work week. In Heppner there are only three positions, two of which will be vacant by the end of the week, leaving one person to run Morrow County's court on the four-day schedule.
"It breaks my heart, it truly does, to see this happen," said Roy Blaine, Umatilla and Morrow counties' trial court administrator. "We will provide the best service we possibly can under the circumstances and appreciate the understanding and patience of the public."
The four-day work week will save $3.1 million to $3.2 million statewide, Blaine said. That trickles down to $172,000 in Umatilla County. Because the state operates on a two-year budget cycle and because of all the budget shortfalls from the ailing economy, Blaine said state courts are trying to save all $3.2 million in the last four months of the fiscal year. That means instituting the 16 furlough days through June 30.
Blaine said while the five courtrooms and associated court offices will be running four days a week, the same amount of work still has to get done.
"It's not easy to postpone everything when you're the courts," he said.
On any given Friday, he estimated the courts saw 40-50 cases. To cope with not having court on Fridays, courts have had to reschedule 700-750 cases.
"The reality is, cases will take longer," Blaine said. "If there was a case that was a five-day trail, it's not getting finished in a week. We'd have to continue it to the next week."
Or if even a one-day trial falls on Thursday and doesn't finish on time, it will be continued to the next week.
This type of scheduling could place a burden on court staff and juries alike.
All types of court appointments will take longer, including arraignments. The jail can hold someone for 72 hours - three days - before he or she needs to be arraigned. If someone is arrested on a Friday, the arraignment would need to happen early on Monday morning, Blaine said.
When it comes to Monday holidays, the person may stay in jail for four days awaiting arraignment on Tuesday.
Umatilla County District Attorney Dean Gushwa said his office will still work on Fridays, but will focus on motions and charging work.
"We will use the time to catch up," Gushwa said.
He said court days will likely be more packed the rest of the week.
Judges, who are salaried, will be able to come in and essentially do office work on Fridays if they choose. They just won't be able to do anything requiring the time of other court staff or something to be open to the public.
Whether or not this schedule will continue into the next biennium after July 1 is still up in the air, Blaine said.
- A Reduced Work Week: One Way to Avoid Layoffs, Posted by Zach Lowe, 3/13 The American Lawyer - USA.
It's 11:30 a.m. as we type this, and there haven't been any layoffs announced yet today. So we've got that going for us. Over in the U.K., Norton Rose [name of law firm] has something else going: a plan to force staff members and lawyers to work four days instead of five and take a pay cut, according to this story from Legal Week, an Am Law Daily sibling publication.
The firm says it will also encourage lawyers and staff to take paid sabbaticals--at a reduced pay rate, naturally--as a means of avoiding layoffs. Experts told Legal Week the plan is unusual. A few firms have toyed with voluntary reduced work week plans, but few--if any--have claimed the right to pick out lawyers (including partners) and force them to work four days instead of five.
The firm plans to cut base salaries for the four-day-a-week employees to 85 percent of their current base pay, Legal Week says. The firm is checking to see whether employment laws outside the U.K. allow them to use a similar strategy at their international offices.
Interestingly, Norton Rose is one of the few top 50 U.K. firms to have avoided any redundancies so far. Magic Circle firms such as Allen & Overy, Linklaters and Clifford Chance have announced staff reductions in recent months. Looks like Norton Rose wants to keep it that way.
['Redundancies' is British for 'layoffs.']
3/13/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Mayor will take pay cut, ask workers to do the same, Youngstown Vindicator via Vindi.com - Youngstown,OH,USA.
YOUNGSTOWN - Youngstown Mayor Jay Williams is asking most city employees to work four fewer hours each week, which would cut their wages by 10 percent, in order to avoid a general fund deficit and the need to layoff workers to make up that shortfall.
Facing a $3.39 million deficit, the city administration is looking to make cuts, and with 80 percent of the general fund's cost going toward the salaries and benefits of its 850 workers, the biggest cut has to come from there, Williams said.
"The overall concept is if we can operate on a 36-hour work week, we'll be able to achieve savings to close the deficit and avoid layoffs," Williams told The Vindicator today after speaking at the Youngstown/Warren Regional Chamber's "Good Morning Youngstown" breakfast.
"It keeps people working and allows them to keep their benefits," Williams said of the plan.
A formal written plan will be presented to the city's unions shortly, he said.
During the chamber event at Our Lady of Mt. Carmel Hall, Williams announced he would take a 10-percent "concession in my salary and benefits."
When asked later by the newspaper about the 10-percent concession, Williams said he'd reduce his $105,000 annual salary by that percentage - a figure equal to $10,500 - through a combination of a pay cut and givebacks on some of his benefits. The mayor would not cut his hours.
[Ohoh, martyr complex alert!]
Without salary concessions, layoffs are inevitable, Williams said. Even with the concessions, there's no guarantee some jobs won't be cut, he said.
- Part-time, part-pay: how firms are cutting workers' hours - A quarter of manufacturers have taken the step, and many more may follow, by Tim Webb, Manchester Guardian via guardian.co.uk - UK.
A quarter of manufacturers have cut working hours during the recession and many more are considering following suit, according to research from the EEF, the industry body for engineering and manufacturing employers.
Accountants, lawyers and train operators are joining the trend as tens of thousands of employees agree to reduced working hours - and pay - in the hope of avoiding redundancy. The growing number of deals is raising fears that low-paid workers will struggle to make ends meet.
Lee Hopley, head of economic policy at EEF, said that short-time working was a temporary measure that firms would only keep in place for between three and six months. If orders had not improved by then, they would probably start laying off staff, she admitted.
[Switch to layoffs and you guarantee that orders will continue to decline.]
A survey commissioned by the CBI reveals that a third of firms are also scrapping overtime for staff, meaning that take-home pay can fall dramatically.
[Excellent! - working staff overtime during high unemployment is almost as recession-deepening as downsizing your markets by downsizing your own best customers = your own employees.]
Service companies and non-industrial companies were also reducing staff hours, said the CBI's deputy director general, John Cridland, by reducing shifts, albeit in a more informal way.
Next Wednesday, official government figures are expected to show that the jobless count has exceeded the 2 million mark for the first time since Labour came to power.
[If the Labour Party wasn't so clueless about the root and source of labor power = "fluctuating adjustment of the workweek against unemployment" (Pres. Walter Reuther of the AFL), the UK would be completely recession-proof.]
Experts said the figures ignored the growing trend of employees who were working three- or four-day weeks or had to accept reduced shift patterns.
[It's not clear how the unemployment rate is supposed to take into account shorter shifts and workweeks, but maybe the Brits did the same thing as the Yanks did in the early 90s = rosied down unemployment figures by counting you as "employed" even if you just worked one hour in the last 10 weeks instead of correcting for unsustainable part-time.]
Richard Reeves, director of the Demos thinktank, said: "The system is very fixed - you're either full-time or out of work." Existing government schemes were very centralised and inflexible, doing little to keep people in work, he added.
[In other words, despite all the lip service to "free market forces," the one absolutely rigidly regulated variable is that the full-time workweek can increase BUT NEVER, EVER DECREASE ONE NANOSECOND.]
For example, only the unemployed automatically qualified for government help to retrain. "But once you're out of work, it can be very hard to get back in," he said. Companies and unions were doing more to find ways to avoid compulsory redundancies than the government.
He said partners might change roles as a result. "If a husband goes on to a three day week, maybe his wife or partner will take up part-time work in another part of the economy."
For the lucky few, shorter working hours mean a better work-life balance. But many will struggle to meet household bills out of a smaller pay packet. "It has a huge impact on quality of life," Reeves said. "It depends on how close to the edge you are in the first place."
Tony Woodley, the joint general secretary of the Unite union, called on the government to top up the salaries of workers who are working fewer hours and to help their employers pay for them to be retrained.
[Numerous US states have work sharing programs that top up shorter-hours employees from the unemployment insurance fund which their continued employment is sparing.]
He has asked Alistair Darling, the chancellor, to reintroduce the temporary short-time working compensation scheme that the Labour government adopted during the recession of the late 1970s.
Some car makers and other manufacturers have been asking for this kind of support since before Christmas. But a government spokesman said yesterday that ministers were still examining the proposals. "We have not finalised what the decision is," he said.
[Better get goin' while you still have something vaguely resembling an 'economy'!]
Woodley said: "It's my very, very strong view that the government is doing next to nothing to protect jobs.
[Looks like the so-called Labour Party has become empty rhetoric.]
I want something that stops lights going out in workers' homes because they can't pay their bills and something that keeps the lights on in factories."
He pointed out that in many European countries, government financial assistance for workers placed on shorter working weeks already existed.
[Europe shmeurope - even a lot of states in the big dumb US of A has such assistance.]
The German government guaranteed up to 90% of take-home pay for up to 18 months.
Car makers have been the most active in reducing working hours as they cut production. This week, Toyota became the latest, cutting shifts by 10% for its 4,500 workers at its UK plants at Burnaston, Derby, and Deeside.
Andy Cook, managing director of the employee relations consultancy Marshall-James, said some employees were resisting attempts to put them on short-time working.
[This is a big problem for labor power - there's alway half their membership who are suicidally non-strategic.]
"A lot of employees are worried that short-time working will lead to something worse, like redundancy.
[when it's quite the opposite = short-time working is the only sustainable way to avoid redundancy, and if full-time is redefined downward - as we did from 1840-1940 - the resulting reduced labor surplus harnesses market forces and re-raises pay to pre-hourscut levels.]
Some resist it, believing their employer is taking advantage of the economic circumstances to get changes on the cheap.
"Employees also say, 'We're open minded about this, but when is it going to end? Is it for a month, two months?' Of course companies don't know when things are going to get better or worse."
[Start layoffs and you'll KNOW - things are going to get worse.]
He also pointed out that short time working is also a lot cheaper for companies than making staff redundant. "Potentially it's a much cheaper way of getting rid of people if they end up leaving because they can't afford to work fewer hours."
[Yes, we call it voluntary suicide.]
He added that employers may start to face legal action if staff think their labour rights have been violated.
[Labor rights aren't worth a damn while labor allows itself to be a surplus commodity. And the way it can stop that is by guarding and continuing to operate its one irresistable power level - redefining the full-time workweek at shorter and shorter levels as techological displacement proceeds. "No, Virginia, there is no 'technology creates more jobs than it destroys' despite the massive campaign to convince you of this contradiction of common sense - tour a modern car factory = robots, tour some 'lights out' manufacturing = no humans, so, no lights - and use your head - why do many CEOs introduce technology? hint: it ain't to create more jobs."]
3/12/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- In Silicon Valley and nationwide, underemployment grows, by Pete Carey, San Jose Mercury News via mercurynews.com - CA, USA
Auto worker John Silva, on furlough one day a week, is going around the house unplugging things and driving less to save money.
[So workweek reduction is happening anyway because the demand isn't there, because there's less spending money in the consumer base, because wages have been sinking, because there's a growing surplus of labor, because employers have been introducing worksaving technology and compensating by cutting employees instead of the workweek. If they had cut the workweek at the start of this vicious circle, there wouldn't be a vicious circle. By cutting the workweek at the end of the vicious circle after they lose the employees, they guarantee they also lose markets and they're now going to be "forced" to repeat the vicious circle.]
Electronics engineer Anand Iyer moves from one consulting job to another, supplementing his wife's income from her job as a part-time technical linguist.
And Scott D.S. Young is getting enough online design work through a job service to "just make ends meet."
They're all members of a rapidly growing part of the work force in Silicon Valley and across the country: the underemployed. They are often hidden from view amid reports about rapidly rising unemployment.
Experts say that if the underemployed and so-called marginally attached workers are counted, the national unemployment rate would be 14.8 percent, not 8.1 percent.
"In effect, underemployment is stealth unemployment," said labor specialist Harley Shaiken, a University of California-Berkeley professor. "It tends to fly below the radar, but it's very real. You've got people out there working two days a week who want a full-time job."
And the problem may be particularly acute in Silicon Valley, where tech companies are known for hiring lots of contract workers and a once-booming construction industry now offers thousands of people only occasional work.
"It can be very painful," Shaiken said. "You have fewer hours, your home is underwater and you have no benefits. That's the package many Americans are facing."
The number of underemployed Americans zoomed 75 percent, to 8.6 million, for the 12 months ending in February - a rate of increase about 8 percentage points higher than that of unemployment. There are currently 12.4 million unemployed, a one-year increase of about 67 percent.
In California, it's estimated that there are 1 million underemployed. No statistics are kept for Silicon Valley.
But Iyer is among them. The 40-year-old father of two lost his marketing job at Cadence Design Systems this past summer and has been working as a consultant ever since.
"I would have taken a pay cut any day," Iyer said. Since being laid off, he's taken a two-week job doing quantitative analysis, a four-month job consulting with a friend's company, and another part-time job doing marketing for a business automation company.
Iyer, who has a master's degree in electrical engineering and an MBA, has sent out hundreds of résumés and received few replies. His wife went from part time to "almost full time" as a technical linguist; the couple have two children in private school and a "reasonable mortgage" payments of $2,500 a month.
Iyer says there are good days and not-so-good days.
"I mean, it goes high and low, based on various things happening, but I am more confident with every day that passes by."
Silva, 40, works at the NUMMI plant in Fremont, where the union has agreed to a four-day workweek for the next six months. Many Silicon Valley workers are in a similar situation as companies look for ways to cut costs without laying off more workers.
His family, like many others, is trying to save money, even though he does have some work.
"We're going around the house unplugging things," said Silva, who is married with an 11-year-old son. "Where before we were a two-car family and we didn't worry about going places, we have become a carpool family."
Young, 49, is finding enough work through online job finder Elance to make ends meet. He said he wakes up "every morning, thinking how long is this going to last?"
Young, a single former school teacher, said he thinks an increasing amount of tech work will be done by part-timers like himself, working online once the recession is over.
"I really think people are restructuring their businesses. Things are changing," he said. "Why would someone bring a whole bunch of employees into an office building when they can get the same value of work if not better from someone outside of the building?"
Elance Chief Executive Fabio Rosati said the site - which allows workers to bid for assignments with employers - is posting 25,000 jobs a month. He expects to post 300,000 to 400,000 jobs this year, up from 250,000 last year.
"A lot of really good people are out of work, and they're looking for ways to make money," Rosati said. "It is bringing unprecedented quality into the online work force. The talent is truly unprecedented."
- EI plans pay cut for all workers, By My-Ly Nguyen, Press & Sun-Bulletin via pressconnects.com - Binghamton,NY,USA
ENDICOTT -- Endicott Interconnect Technologies said it will implement wage or hour reductions for all of its employees because of missed financial targets.
Company spokeswoman Theresa Taro said the actions, which will start in April and be limited to the second quarter, are aimed at avoiding layoffs.
EI employs about 1,800 people. The company will participate in the state's Shared Work program, with its hourly workers seeing a reduction of eight to 16 hours in their regular, 40-hour workweek, Taro said. EI's salaried work force will experience a 10 percent reduction in pay but no loss of total work hours.
The privately held company did not disclose the specific cost savings that will result.
Like other manufacturers, EI is facing a tough economic environment.
The company did not elaborate on its financial results but issued this statement: "EI has been missing our plan year-to-date and expect that we will also miss our plan in March.
"We had anticipated a challenging second quarter, and with little indication that market conditions are changing, we expect that we will fall short of our plans in Q2, as well."
Current conditions are not a reflection of the company's long-term outlook, Taro said.
The company is still hiring for critical positions, such as systems engineer, software engineer, supplier quality manager and equipment manager, she said. Other job openings are listed on the company's Web site, at eitny.com.
Under the Shared Work program, an employer facing a temporary decline in business can reduce the hours and wages of all or some of its employees, according to the state Labor Department Web site. The affected employees can receive partial unemployment insurance benefits to supplement their lost wages.
[So there's even unemployment-connected workweek reduction in many US states (here, NY state - for more, see para.3 under Economywide on our Working Models page) - but oriented to first aid after the damage is done rather than avoiding the damage from the start as in the Timesizing program.]
EI supplies advanced electronic packaging solutions, including printed circuit board fabrication, semiconductor packaging and assembly services.
3/11/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- It'll Take More Than Money to Fix This Crisis, By Steven Pearlstein, washingtonpost.com.
[Amen to that, bro!]
Browsing through the Style section of yesterday's Post, I happened upon an article about new Washington "power couples" that made reference to one Jeremy Bernard, a Los Angeles fundraiser for President Obama who recently landed the plum job as White House liaison to the National Endowment for the Humanities.
White House liaison to the National Endowment for the Humanities?
Let's get this straight: We're up to our necks in the worst global economic crisis since the 1930s, the government is putting trillions of dollars of borrowed money on the line to rescue the financial system and stimulate the economy, tens of trillions of dollars in paper wealth has vaporized, millions of Americans are losing their homes and their jobs, nearly all the top jobs at the Treasury Department are vacant, yet somehow the White House has found the time and the money to hire a liaison to the National Endowment for the Humanities!
It's a small point, I realize, and I mean no disrespect either to Mr. Bernard or the humanities. But it highlights what seems to be a glaring problem: There is still way too much business as usual going on in Washington, on Wall Street and in the media.
Not so on Main Street. All indications are that in response to the crisis, consumers have embraced a new frugality, paring debt and cutting consumption they know had become excessive. Businesses are moving to cut back on dividends and stock buybacks they can no longer afford, trim frills and reduce prices and capacity to post-bubble realities.
Contrast that with the approach to the crisis taken by members of Congress, who as far as I can tell, have changed nothing about how they go about their duties. Same leisurely three-day work week.
[How about that?! Our 'hard-working' Congress preaches 'hard work' but practices a leisurely three-day work week.]
Same bloated budgets for staff and security. Same unwieldy committees holding the same meaningless hearings. Same partisan posturing and gamesmanship. Same willingness to put narrow special or parochial interests over the national interest.
Can you imagine a better way to undercut public support for fiscal stimulus and deficit spending than to report out an omnibus spending bill with nearly 9,000 earmarks totaling $8 billion? But, of course, that is just what the Democratic Congress has done. Americans don't need to be lectured by the House speaker and the Senate majority leader on the spending prerogatives of Congress. What they need are leaders who can demonstrate, in ways symbolic as well as substantive, that they know the difference between spending that is crucial to the country in times of crisis and spending that is not.
As for Republicans, their stubborn opposition to any increase in government spending in the face of a severe downturn is the economic equivalent of bloodletting. And their determination to paint every initiative of the Obama administration with the broad brush of socialism is the kind of old-fashioned red-baiting that would make Joe McCarthy proud.
It's not just Congress, however. Key regulators have also been slow to respond to the unfolding crisis with the kind of urgency the situation demands.
At a time when the Treasury and the Federal Reserve are going to extraordinary lengths to stabilize the banking system, it's hard to see how any useful purpose is served by allowing speculators to undermine market confidence in those efforts by massive short-selling of bank stocks and manipulative trading of associated credit-default swaps. At a minimum, the Securities and Exchange Commission and the Commodity Futures Trading Commission should be holding public hearings to expose these trading strategies and listing on their Web sites the names of those patriotic Americans who are engaged in them. Better still, they should be using their regulatory powers to outlaw them completely until the crisis has passed.
It's also hard to understand why the SEC continues to drag its feet on suspending accounting rules that effectively require banks, insurance companies and other financial institutions to value the assets on their books at ridiculous discounts because of a breakdown in the markets in which those assets traditionally trade. A year ago, it was possible to make the case that suspending "mark-to-market" rules might undermine investor confidence in stocks and bonds of financial institutions. But now that those securities are trading at a fraction of their economic value, it makes no sense to cling to accounting rules that only served to confirm investors' worst fears and needlessly increase the scope and cost of government rescue efforts.
The media also deserve some criticism for the way they have recently covered the crisis. The personalizing of policy debates may be great sport during a political campaign, but it can be downright destructive in the middle of a crisis when public and market confidence are so crucial. You'd never know it from the coverage that Treasury secretary Hank Paulson last year almost surely prevented a meltdown of the global financial system [huh?]. Nor would you imagine from all the negative coverage and commentary that Tim Geithner's now-disqualifying sin is that he took an extra couple of weeks to flush out the details of an innovative scheme to buy up unwanted bank assets and reduce home foreclosures.
Too often, the media have accepted uncritically all manner of hyperbole and misinformation peddled by people talking about their trading books, wielding partisan axes or pursuing ideological agendas. While there are plenty of reasons for populist outrage at the behavior of major financial institutions, the titillating focus on bonuses and boondoggles has been way out of proportion. And thanks to the media, much of what now passes for conventional wisdom about the government's response to the crisis amounts to little more than a childish disappointment that officials have been unable to wave a magic wand, throw a couple of hundred billion dollars worth of fairy dust in the air and make the whole thing disappear.
What we are facing is the economic equivalent of a war -- a war that caught us by surprise and threatens much of what we have taken for granted. It's a war we can win, but only if we have leaders and opinion makers who commit to difficult sacrifices, a sustained effort and serious changes in the way things are done.
Steven Pearlstein is the moderator of a new Web Site, On Leadership, at washingtonpost.com. He can be reached at firstname.lastname@example.org.
- German Labor Costs Increased Most on Record in Fourth Quarter, By Simone Meier, Bloomberg.com, NYC,USA.
Hourly labor costs in Germany's manufacturing and service industries rose the most on record in the fourth quarter as companies cut output and introduced shorter working hours.
The cost of an hour's work increased 3.9 percent in the fourth quarter from a year earlier, the Federal Statistics Office in Wiesbaden said in a statement today. That's the biggest gain since the data was first compiled in 1997. Hourly costs rose 1.7 percent from the third quarter when adjusted for seasonal swings and work days.
Companies in Europe's largest economy are seeking ways to cut costs and reduce staff in order to weather the worst global economic slump in 60 years. German unemployment rose in February for a fourth straight month and manufacturing contracted. The International Monetary Fund predicts Germany's economy will shrink 2.5 percent this year.
"The decline in production led to a reduction of overtime hours, a decrease in the number of weekly working hours and an increase in the granting of time off," the statistics office said. "Consequently, the price of the labor component of production rose in relation to the number of hours actually worked."
[There's no 'consequently' here at all unless production declined faster than working hours, and they've made no mention of relative rates of decline.]
Gross wages and salaries among manufacturing and service companies increased 4.1 percent from a year earlier after gaining 2.4 percent in the third quarter. Non-wage costs rose 3.1 percent in the fourth quarter from a year earlier after gaining 1.7 percent in the third quarter.
[All would adjust automatically if wages and salaries were indexed to production. Then we could focus on the real cause of downturns - relative share per person - the more of the money supply that gets concentrated in the top income and wealth brackets, the likelier a recession or permanent downturn.]
To contact the reporter on this story: Simone Meier in Frankfurt at email@example.com
3/10/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Is four-day week new way to save jobs? - Shorter week growing way to stave off layoffs in a declining economy - Staying at home so others don't have to, by Brett Popplewell, Toronto Star via thestar.com - Ontario, Canada.
The four-day workweek: once the dream of overburdened labourers, now the cash saving concession that's saving many of their jobs.
Though it's not a new trend, work sharing is a growing one as employees across the country agree to wage freezes, vacations and benefit givebacks and reduced hours all in an effort to stave off layoffs.
[You can't fight common sense.]
Last month Sears Canada cut 300 jobs from its department stores. Yesterday it confirmed that senior leadership there had volunteered to take a 15 per cent cut in their base salary to avoid more job cuts.
At Rogers Communications, the company recently gave all full-time staff with its more than 70 publications the opportunity to reduce their workweek, accepting a 20 per cent pay cut in an effort to avoid laying off 20 per cent of its staff.
In Taiwan's Hsinchu Science Park (the island's version of California's Silicon Valley) some 100,000 workers are taking up to 10 days of unpaid leave a month to prevent job cuts. In Utah, 17,000 state employees have been on a four-day work week since last summer.
[Utah is irrelevant because it's merely doing four 10-hour days, meaning no cut in the 40-hour workweek whatsoever.]
The Canadian government has long supported work sharing as an alternative to outright layoffs. There's even a program through Services Canada designed to help employers and workers avoid temporary layoffs in times of trouble.
The program provides Employment Insurance benefits to compensate employees who are willing to work a temporarily reduced workweek.
[Compare Massachusetts and many states. Fred Best has an entire book out about this.]
But there's a bitter precedence in Ontario.
[That's precedent - bad editing! And many people LOVED this precedent - it was just the impatient pinkos in the NDP leadership backroom who fragged their fabulous leader Bob Rae for not implementing the whole leftwing agenda immediately - and thereby these utopians hamstrung their party and their agenda and wound up with a much less charismatic leader in - can't even remember his name!]
Many look back at the so-called Rae Days of the 1990s when public servants took leave without pay under an initiative of the NDP government of then-premier Bob Rae.
"It was hugely unpopular because it was imposed on the unions," said Anil Verma, professor of industrial relations and human resources at the University of Toronto's Rotman School of Management.
[No, it was hugely popular with all Ontarians except the union's doctrinaire dogmatists. There's always been 50% of the labor movement who "didn't get" that shorter hours was their power lever, and that if they could only win one of their two long-term goals, shorter hours and higher pay, and it was higher pay, they'd wind up with neither because higher pay contradicts market forces by slapping an artificially high price on a surplus commodity (i.e., a high wage on surplus labor) - whereas if they could only win one goal and it was shorter hours, they wound up winning both goals because hours reduction cuts the labor surplus and harnesses market forces in raising pay and benefits. This was part of the reason the dumb CIO split from the smart AFL in the 1930s. AFL leader Walter Reuther always pushed for shorter hours, and may even have invented at the UAW Convention in Atlantic City in 1964 the "fluctuating adjustment of the workweek against unemployment" that Timesizing is based on. In the 1970s, there was an "All-Unions Committee to Shorten the Workweek" in Chicago. Too bad half the labor movement was always out-to-lunch on this issue. Selling their birthright (shorter hours and control over the supply&demand for themselves) for a mess of pottage (short-term pay and benefit hikes) took their membership down to 13% of the workforce, wiped them out as a player in most of the economy and set us up for the kind of unchallenged power&money grab the dodos in the top brackets have been pulling over the past 20-30 years that has resulted in the current meltdown. Dumb dumb dumb. Progressives are often their own worst enemies with their impatience, their 100% perfectionism, their failure to recognize basic common sense (for example, on immigration) and their tolerance of government bureaucracy, inefficiency and burgeoning hordes of stifling detailed controls (where is THEIR design quest for a single all-sufficient regulation???).]
"So they [vocal minority] didn't like it. But there are many unions who would voluntarily accept" such work-sharing agreements today.
In his inaugural address to a joint session of Congress, U.S. President Barack Obama said the growing trend demonstrated the kind of determination and thoughtfulness that will help Americans pull through the economic slump.
"It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours," Obama said.
The Canadian Auto Workers' recent concessions - freezing wages, taking leave without pay, giving up benefits and bonuses - seem to represent the selflessness Obama praised.
But what's to be said of the unionized workers at Tenaris Algoma Tubes in Sault Ste. Marie who initially rejected a work-sharing proposal that would have spared layoffs because they were reportedly angry?
[What's to be said is that half the labor movement has always been suicidally out-to-lunch on this key issue.]
"For unions selling an across-the-board (drop in pay) to all, it is tougher because historically we've established this notion that junior people should take the brunt," Verma said.
["How can we kill ourselves? Let us count the ways." Mixing this up with seniority is certainly a big one - and a new one on us. How stupid can unions get?]
That's because "the seniors are saying, when we were down there, we did our part, so now the people at the bottom should accept it and we should be immune just because we're senior'."
[Brilliant - we got screwed by non-unifying 'union' members who didn't want to "all sacrifice together" in the past, so we're going to keep shooting ourselves and our solidarity in the foot forever. How ironic, because repeated experience teaches that shorter hours was always a much more unifying goal than higher pay throughout the history of the American workweek (see Roediger & Foner's "Our Own Time") - and here these morons in Sault Ste. Marie have found a way to wipe out that advantage.]
But in many cases it is the unions that have been offering workweek concessions to management.
"We've got a lot of our plants on job sharing right across Ontario," said Wayne Fraser, Ontario director of the United Steelworkers union.
[They probably mean work sharing - job sharing is just splitting up a 40-hour/week job.]
Fraser reckons that thousands of Ontario's steelworkers are voluntarily working reduced hours, just as they did during the last recession, adding that it's counter-productive to let younger employees be cut.
The trend of spreading the pain around the workforce has been happening in such places as Silicon Valley for years, where high-tech firms tend not to axe their youngest employees when the going gets tough for fear that they might never get them back.
However, Verma said, layoffs, though never the kindest choice, can be the smartest one.
[No they can't - except immediately prior to corporate dissolution.]
If a business is in a structural downturn and needs to shed bodies permanently, it makes more sense to implement layoffs, she said.
[No it doesn't, because it always deepens the structural downturn. What the heck does she think 'structural downturn' means anyway? It means as long as we structure a frozen 1940 workweek that is flexible upward to more hours a week but is downwardly rigid, we build a growing wage&market-depressing labor glut if we keep injecting worksaving technology, And as Walter Reuther said in response to Henry Ford's "Let's see you unionize these robots!" - "Let's see YOU sell them cars."]
Problem is, "the younger people might be the most valuable assets."
[Bingo. In an automatic worksharing system like Timesizing, age is irrelevant and agism doesn't exist. (For example, you don't even need mandatory retirement at some arbitrary age because you've always got full employment at good pay (and resultingly robust markets), no matter how short a workweek that requires. Pay goes by supply and demand like everything else, not by hours or productivity.)]
- Overspending on overtime - Brantley's overtime for police, jail workers leads to county review, By Mike Morrison, Florida Times-Union via jacksonville.com - Jacksonville,FL,USA.
[It's a system meltdown accelerator when we have thousands of people working overtime while millions of others can't even find part-time = consumer markets, bye bye!]
OVERTIME ADDS UP
Brantley County Sheriff's Office overtime for the first two weeks of February:
- Jail employees: 21
- Overtime hours: 917.5
- Overtime pay: $13,970
- Law enforcment employees: 19
- Overtime hours: 445.5
- Overtime pay: $8,550
A surge in overtime pay by the Brantley County Sheriff's Office has prompted the county commission to look into establishing a separate police force.
Sheriff's Office employees worked 1,363 hours of overtime in the first two weeks of February, representing some $22,500 in extra expenses for the financially beleaguered county. With $227,000 in the Sheriff's Office budget for overtime for the fiscal year, that sum represents more than double what was budgeted for each pay period.
The Sheriff's Office, which has 40 employees, has a total budget of $2.25 million for law enforcement and jail operations. Establishing a separate police force would remove law enforcement from the management of Sheriff Robert Thomas and place it under County Manager Chuck Madray.
"There's an opinion out there that other resources could manage personnel in that area more efficiently," commission Chairman Ron Ham said.
Thomas characterized some of the overtime as a one-time hit from opening the county's new jail and said he's not about to surrender the office's law enforcement responsibilities.
Until the jail opened, all but a few of the counties inmates were housed in other counties and his officers had to bring 60 of them to Nahunta, Thomas said.
Deputies moved three per car and it took a number of days to accomplish because the inmates all had to be rebooked in the Brantley County lockup, he said.
For a two-` week period, the jailers worked every day, Thomas said.
And if Madray has trouble with the overtime, he hasn't expressed it to Thomas.
"He hasn't called me to talk about it. In my opinion, he's pointing fingers to get the attention off himself," Thomas said. "We've tried to work with him. When things don't work out, he blows up and talks to the newspapers and the commissioners."
'Trending down' not enough
There is evidence the relocation of inmates was partly to blame because overtime has since dropped.
For the pay period that ended this week, the Sheriff's Office had about 700 hours in overtime, which Ham described as "trending down'' but still too high.
Some overtime pay is just part of the cost of law enforcement in the county, Thomas said.
In order to answer all the calls, he has to include eight hours of overtime into each patrol deputy's weekly schedule, he said.
"It's a big county and we answer a bunch of calls," Thomas said.
His 13 officers answer about the same number of calls as Ware County does with 19 deputies, Thomas said.
His office is also operating one patrol deputy short, he said.
Thomas and the County Commission have been at odds over budget issues for several months, particularly overtime pay. Chief Deputy Mike Mercier's pay in particular was a sore spot for Madray and the commission. At more than $80,000 a year, Mercier was the highest paid employee on the county payroll until mid-January, when the commission put him on a fixed salary of $48,822. Before that, he was pulling down $40,000 a year in overtime pay.
Working together to cut costs
Madray raised the possibility of establishing a county police force during a work session last week and received the commission's approval to begin a preliminary study along with County Attorney Tom Lee.
"What the County Commission said is that there's nothing wrong with evaluating and looking at anything," Ham said.
The financial crisis has hit hard in the rural county, Ham said, and the county is looking at any means possible to cut expenses, including shortening the work week and furloughing workers.
"We can't cut other departments to a 32-hour work week and continue paying so much overtime to the Sheriff's Office," Ham said.
Commissioner Mike Edgy said he's been working with the sheriff to find a way to cut expenses.
"We're in dire financial straits, and we're looking at anything we can," Edgy said.
With the new jail open, Edgy said he is hopeful overtime can be brought under control and that the county won't open a separate police department.
Commissioner Linton Herrin said such a drastic change should be left up to the voters.
"I think the people need to have a voice in this," he said. "That's the main thing."
3/09/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Lean Factories Find It Hard to Cut Jobs Even in a Slump, By TIMOTHY AEPPEL and JUSTIN LAHART, Wall Street Journal, front page below fold.
SPARTANBURG, S.C. -- At a factory here that churns out plastic parts for everything from spray cans to blasting caps, laying off just one worker can be more trouble than it's worth.
The plant, owned by Cleveland-based Parker Hannifin Corp., has become so lean over the past decade that many assembly lines run with only a handful of highly trained workers.
So while mass layoffs have driven the U.S. unemployment rate to its highest in 26 years, Parker and other companies like it are responding to the slump in more surgical ways, mainly by cutting hours and shedding temporary workers.
[So again, shorter workweeks are happening anyway but not in the best way.]
"Because of productivity gains, every one of my people carries more dollars in sales today," says Donald Washkewicz, Parker's chief executive. In 2000, the average Parker worker represented about $125,000 a year in sales. Today, that figure tops $200,000. "If I need to cut back, I have to cut back fewer people to achieve the same goal."
Similar trims are taking place at each of Parker's nearly 300 factories. And to varying
degrees, this is happening at thousands of other large and small factories across the U.S.
The selective cuts help explain a curiosity of this recession. The manufacturing sector is suffering a sharp contraction and has had to slash many jobs -- some 1.3 million, according to a Labor Department jobs report released Friday. But fewer positions have been eliminated than would be expected given the depth of the slump.
As of February, 14 months into this recession, manufacturers have cut payrolls about 9.4%. That's slightly less than the 9.5% cut 14 months after the start of the 2000 recession, when the economy was already recovering. The drop in production and orders, however, has so far been much worse this time around, indicating that companies have sought ways to cut back other than simply shedding workers. As of January, the latest figures available, U.S. manufacturers cut production 12.8% since the start of this recession, compared with just 2.6% at the same point after the last recession began.
The sheer speed of this downturn, and the fact that it hit many manufacturers after the economy as a whole was officially in recession, may have muted layoffs. A good chunk of the factory sector was still humming along until late last year, aided in part by strong exports. Manufacturers may also be trying to hold on to workers as long as possible, in the hope that business revives.
But deeper changes in manufacturing are also playing a role. A decade ago, most factories
tended to do "batch" work, with large groups of employees churning out endless runs of the same pieces. Since many workers did identical tasks, it was easier for companies to cut people during downturns.
That kind of work, which employs more people and includes a larger share of less-skilled positions, has been steadily migrating to lower-cost locales overseas. In the U.S., companies now have new equipment and streamlined operations that require fewer, more highly trained people to make more goods. The sector lost 3.5 million workers -- one in five jobs -- between January 2000 and the start of this recession. Even as employment contracted, production in that same time period rose 10%.
"When you get down to where we are now, where manufacturing is less than 10% of the employed population, there just isn't that much more you can cut," says Kurt Karl, chief U.S. economist at Swiss Re. Mr. Karl says manufacturers are especially eager to hold on to workers who are trained to operate their increasingly sophisticated equipment.
At Parker's Spartanburg plant, five workers make the tiny plastic rings that become seals on aerosol cans. Each member of the group runs a different set of high-speed machines doing a distinct step, such as extruding long noodles of plastic, grinding them or cutting them into final product.
The group can curb production several ways short of layoffs. Two workers can complete the first two steps in one day, then the other three workers can finish those products the next day, essentially cutting everyone's hours by half. Or, all five can take whole days off together. But permanently pulling one or two of them out of the mix is far more difficult to accomplish, and could make it impossible for the line to operate efficiently.
Mr. Washkewicz, the Parker CEO, says the last thing he wants to do is lay off a worker he's spent money training: "You want to sustain those skills."
But cutting hours might not be a long-term solution. Mr. Washkewicz says during the recession that hit the U.S. in the early 1980s, he headed one of Parker's operations that cut back to four-day weeks in order to save jobs. It worked for a while. But after about three months, many people were struggling to pay bills on salaries that had been reduced by
20%. The company ultimately changed its approach, laying off workers and restoring those who remained to a fuller schedule.
Many of the current Parker workers whose hours have been cut say that they prefer it to losing their jobs entirely, but that they don't feel out of the woods yet. "I try not to worry about the economy," says Miriam Porter, one of the workers now taking two unpaid days off each month. However, she adds, "it is looking kind of bad."
The Spartanburg plant, which employs about 133 workers, is part of Parker's hydraulic-filter division, which has plants in several U.S. locations as well as overseas. In the 2000 recession, the division's sales fell about 7%, prompting layoffs of 22% of its work force. This time, sales are down substantially more -- the company declines to provide a specific percentage -- but only 5% of workers have lost jobs.
Last week, Parker announced a one-year salary freeze for its workers world-wide. When it comes to scaling back production, each part of the company is given broad leeway in how and whether to cut workers or their hours. As part of its announcement last week, Parker trimmed the hours and salaries of everyone at its Cleveland headquarters by 10% through the end of June. The pay cut for top executives, including Mr. Washkewicz, was even bigger, because it included reductions in incentive bonuses.
Parker isn't alone. The Labor Department reports that in February, manufacturing production workers spent an average of 39.6 hours a week on the job, down from 41.2 hours a week a year earlier. In a survey of chief financial officers conducted by Duke University and CFO Magazine last month, 55% of manufacturing firms said that they had reduced employee hours over the past month, compared with 30% for other firms. Over the next year, 58% of manufacturing firms said they planned to cut hours, compared with 32% for other firms.
Streamlined production and technological improvements also mean fewer jobs need to be cut in a downturn. In another section of Parker's Spartanburg plant, two long rows of machines churn out plastic tubes for blasting caps. The small explosive devices are used by construction and mining companies to clear debris. With demand down for blasting caps, Parker recently went from making them on two shifts to just one.
That move cost the jobs of two workers who ran those machines on a second shift. A decade ago, those same two blasting-cap lines required up to eight people to operate. Eliminating production on that second shift would have meant shedding four times as many workers. The labor-saving improvements included replacing nearly 400 mechanical rollers that required workers to painstakingly apply lubricant throughout the workday. Now the line has mechanisms that don't need oiling.
Another factor saving jobs thus far is smaller inventories. A decade ago, Parker, like many other companies, structured its factories so that workers were building large batches of goods at each stage of production. That often led to huge stockpiles and made it harder to adjust when a downturn hit. There might have been six months or more of goods on Parker's shelves before the signal finally came to reduce production.
Parker's plants today have been largely restructured to create smaller production clusters. Seals for aerosol cans, for example, are only made in numbers that match the flow of orders. Mr. Washkewicz says those big stockpiles of yesteryear used to mean he had to cut more people, much faster. "In the past, we were trying to adjust to past sins, as well as the current drop," he says.
Some companies say tighter inventories helped them notice a dropoff in orders more quickly than they might have in years past. "We saw the economy changing early last year and started cutting back," says Rick Olson, who oversees four of Toro Co.'s plants in the northern U.S.
Toro, based in Bloomington, Minn., makes lawn mowers and other equipment that traditionally sees lots of seasonal flux in sales. Rather than laying off workers in droves, the company curbed seasonal hiring and overtime and didn't replace workers who had left.
Some smaller companies have found ways to shrink head count since the last downturn. Germantown, Wis.-based Mahuta Tool Corp., which makes items such as 600-pound screws used in cranes, went from 23 to 12 workers in the last bruising manufacturing recession. This time, the company has only had to cut two workers, reducing its payroll to 17, in part because each worker now represents far more production than before.
"The highly skilled person, you're not going to lay them off," says CEO Lynn Mahuta. "You will find other work for them to do."
For workers who haven't been spared the ax, the future is an open question. Spurgeon Jackson, a 34-year-old machine operator who has spent 15 years at Parker's Spartanburg plant, was one of the two people laid off from the second shift making parts for blasting caps. He was recently called back to cover for a worker on medical leave, but he doesn't know how long it will last.
"The 2000 recession was bad," he says, stopping next to the clattering row of machines, "but not nearly as bad as things are right now."
Write to Timothy Aeppel at firstname.lastname@example.org and Justin Lahart at email@example.com
- Brewery staff face cut in hours as demand for drink dries up, By MICHAEL BLACKLEY, Scotsman via news.scotsman.com - United Kingdom.
Staff at the Caledonian Brewery may be asked to cut their working hours to help the city's last brewery beat the downturn.
A shorter working week is one of the options being discussed by management and unions at the Slateford Road brewery.
The makers of Deuchars IPA and Caledonian 80/- have been hit by a drop in beer sales and rises in costs affecting the whole industry. The cost of hops, barley, gas, electricity and distribution have all risen in recent months.
The brewery expects to need only around half of its 200,000-barrel capacity over the coming year.
Another option being considered is cutting up to ten production jobs. If the cut in hours is agreed, a range of production staff would be affected until the situation improves.
Management at the company, now part of Scottish & Newcastle, are known to favour cutting hours, rather than redundancies [Brit. for 'layoffs'], as they are confident sales will pick up in the short to medium term.
Stephen Crawley, managing director at the Caley, said: "We are always aiming to increase efficiency because this is almost like a living, working Victorian museum and that is expensive to run.
"We produce expensive products but it is the cost of raw materials, together with consumers' changing (behaviour] that is having an impact.
"However, if you are running a company, you want to keep people that work hard and try to wait until you come round the U-bend."
[Assuming it is a U-bend or '180' rather than a downward spiral...]
He said that talks were taking place with union leaders about the way ahead. He believes that being part of S&N, which is in turn owned by global beer giant Heineken, can provide further opportunities to increase sales by developing new markets.
The Caley also hopes to benefit from a shift among drinkers towards locally-produced cask ales. Beer sales fell by eight per cent in the year up to May 2008, the latest industry figures available. However, cask ales increased their market share over that period, after seeing a smaller 0.3 per cent drop.
Patrick Browne, chief executive of the Scottish Beer and Pub Association, said: "The industry is under a lot of pressure not only on the brewing side but on the pub side as well.
"Beer as a product is still a significant part of the market but it is declining and has been since the 1970s quite steadily. The current pressures have compounded that phenomenon.
"Consumers are being very careful about how they spend their money and that is having an impact on sales in bars and even in supermarkets."
However, he added that real ales were performing better because they were premium products. "The trend at the moment is premiumisation and consumers are willing to pay a premium for that type of product," he said.
- All government hospitals to cut doctors' hours - Hospital Authority says pilot scheme to reduce workload has been a success, by Ella Lee, 3/09 South China Morning Post (subscription) via SCMP.com - Hong Kong.
Doctors at some busy hospitals have had their work week cut to 65 hours under a pilot programme and, because of its success, the Hospital Authority will soon extend the scheme to all public hospitals...
3/08/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Workers sacrifice pay, hours to save jobs - In tough economic times, more willing to share the burden, tighten their belts, By STEVE HART, 3/07 Santa Rosa Press Democrat via pressdemocrat.com - Santa Rosa,CA,USA.
Ralph Beltz has been cutting back on expenses since January, when he and 35 other Cotati city workers agreed to a five-month, 5 percent salary reduction.
The purchase of a big-screen TV is on hold. He's spending less on cell phone and cable service. "We're only buying what's absolutely necessary," said Beltz, a Cotati maintenance worker for eight years.
"We usually spend a weekend in Palm Springs," said Beltz, 49. "This year we're not going to do that. We're definitely staying closer to home."
Still, he has no regrets about taking a pay cut to help the city close a $500,000 budget shortfall. Cotati workers' voluntary reduction is saving the jobs of several fellow workers.
"We're all in this together," Beltz said.
The economy's downturn has many Sonoma County workers adjusting to a new reality - keeping their jobs but making less money.
Salary reductions, furloughs and shorter hours are hitting a broad spectrum of employment sectors, from high-tech to wineries to government. These money-saving measures are a way for employers to control their costs without disruptive layoffs, said Robert Eyler, an economics professor at Sonoma State University.
"Employers are trying to find creative ways to keep their work forces," he said. They want to retain skilled employees and avoid the cost of training new workers when the economy gets back on track, Eyler said.
For workers in the public sector, it's a shock, said Lisa Maldonado, director of the North Bay Central Labor Council. "This is unprecedented," she said.
While pay cuts are hard to swallow, they're better than layoffs, said Maldonado, whose group represents more than 30,000 workers in four counties. "When people can give up a little to save somebody else's job, they will," she said. "We know what it's like to have kids and a mortgage to pay."
Most state employees are facing furloughs, staying home one or two days each month without pay. The state ended mandatory "furlough Fridays" last week, but workers still must take self-directed time off.
Agilent Technologies, the county's largest high-tech employer with 1,350 workers, cut salaries across the board in January. Most are taking a 10 percent cut, although a smaller number of lower-paid workers took a 5 percent hit.
Work furloughs - the kind of temporary layoffs common in industries such as high-technology, construction and auto assembly - are spreading to other sectors, including government and even wine producers.
In December, Agilent closed its Santa Rosa facility for two weeks to save cash. The companywide furlough, along with the pay cut and other steps, saved about 2,500 jobs, or 13 percent of its global work force, said Jeff Weber, Agilent's Santa Rosa spokesman.
Sales of Agilent's electronic measurement products are down 15 percent as consumers buy fewer cell phones and other digital gadgets.
Agilent is trying to keep most of its workers on the job, Weber said. "You're going to need them when the business turns around," he said.
Employees at another Santa Rosa technology company, JDSU, are working fewer hours as the optical products business deals with an 11 percent drop in sales.
Sonoma County's largest wine company, Kendall-Jackson, cut hours for some of its workers last year as part of a cost-saving program that included a hiring freeze.
While furloughs and pay cuts may give businesses some breathing room, they haven't eliminated layoffs altogether. Agilent is eliminating 600 jobs companywide, although it's unclear how the Santa Rosa operation will be affected.
JDSU has cut nearly 5 percent of the work force at its Santa Rosa facility, which now has about 550 employees.
Kendall-Jackson laid off an estimated 170 workers in January as the market for high-end wines soured.
Most of California's 238,000 state employees are being forced to take one or two unpaid days off each month to help close a $42 billion hole in the budget. Furloughs have affected nearly 3,000 state employees in Sonoma County, including Caltrans workers who maintain and repair highways.
"A lot of the guys are looking for second jobs," said David Hayner, district representative for Operating Engineers Local 3 in Rohnert Park, which represents state road workers.
[Phase 3 of the Timesizing program plugs this moonlighting leak - but by the stage when it's applied, so much of the labor surplus will have been reduced that straight-time wages will have restored most losses due to original overtime cuts.]
They're applying for part-time work at retailers such as Home Depot and Kmart, he said. "There's 40 percent unemployment in the construction industry, so the chances of getting work there are very slim," Hayner said.
Friday furloughs are the rule in Petaluma, where City Hall and some other departments are open just four days a week. Petaluma also cut programs and laid off some workers to close a $2.1 million budget gap.
Nationwide, furloughs and pay cuts are spreading to professional jobs in finance, publishing, entertainment and universities, according to Watson Wyatt Worldwide, a human resources consulting firm in Chicago.
About 11 percent of large U.S. companies have implemented mandatory furloughs in response to the economic downturn, according to a Watson Wyatt survey of 245 employers.
An additional 6 percent said they were planning furloughs over the next 12 months.
A different study found 6 percent of businesses were planning to cut worker salaries in 2009.
In Cotati, where full-time city employees make $34,176 to $128,736 a year, the suggestion to cut employee pay across the board came from workers themselves. Police dispatcher Kim Petersen said the move saved several jobs in her department.
"I'm very thankful I have a job," she said. "A lot of people are out of work."
To conserve cash, she's delayed the purchase of a new car and stopped contributions to her retirement plan. "I'm not purchasing any big-ticket items," said Petersen, who is married and has three children.
Police Officer Chris Diaz said he hasn't had second thoughts about giving up some of his pay. "It was the right thing to do," he said.
- [From the wine companies to the whiners -]
Recession finds even those with jobs losing pay, By CHRISTOPHER LEONARD, The Associated Press.
In cubicles, factories and stores these days, anxious workers are trying to ease each other's economic fears with something akin to, "Well, at least we still have a job."
Yet for many, that's becoming small comfort as more employers cut hours or hire only part-timers. People paid on commission, meanwhile, are suffering as sales dry up. And state workers around the country have been put on unpaid leaves.
These workers aren't counted in the unemployment rate, which hit 8.1 percent in February. They're not eligible for federal benefits that provide a safety net for the jobless. Yet their pain is real, and their reduced spending is a drag on the economy.
Call them the walking wounded of this deep recession: millions of workers whose incomes have fallen even as they manage to hold onto their jobs. Their shrunken pay has forced many of them to make hurtful sacrifices.
"I won't be able to buy to the groceries I need to buy to make sure my family can eat until the end of the month," said Rhonda Wagner, a 52-year-old California state employee who just absorbed a 9 percent pay cut because of a state-imposed unpaid leave.
Before her pay cut, Wagner said her paycheck from the Department of Motor Vehicles was barely enough for her to pay her bills. Now, she says she's facing foreclosure and struggling to pay for utilities.
"I will have to rob Peter to pay Paul," she said. "We're expected to work, even though we're not getting paid."
More than 4.5 million workers last year depended at least partly on variable pay, which includes tips and commissions, according to Labor Department figures. Meanwhile, the number of workers forced into part-time instead of full-time work soared 76 percent in the past year.
The average number of hours all employees work each week has also dropped. The commission-heavy sectors of retail and auto sales have been especially hammered.
That said, workers whose hours or commissions have dropped have still fared better than those who have lost jobs altogether. Even though workers are being given fewer hours to work, average hourly wages have continued to rise over the past year.
[Cut the labor surplus, the horde of desperate job seekers, and overall wage levels go UP.
Still, many of those who keep their jobs tend to suffer during recessions right along with the unemployed, said Edward Lazear, professor of human resources management at Stanford University and former chairman of President George Bush's Council of Economic Advisers.
As the recession cuts demand for goods and services, companies that don't shed workers outright must squeeze savings from the work force that remains. They typically do so by cutting hours. And as a recession persists, rising competition for jobs tends to shave wages and benefits. Companies lose any incentive to boost pay.
[Not if they cut hours and spread the work enough to keep the labor surplus from growing.]
"Other guys are now competing with you for that job, and they're willing to take that same job for less money," Lazear said. "While it might not happen in any given month, over the next three years, wage growth will be lower than it would have been had we not had a recession."
[Again, not if hours are cut and work is spread around enough to keep the labor surplus from growing.]
When companies cut or freeze wages for salaried or hourly employees, the workers tends to feel the effect gradually. By contrast, for waitresses, car salesmen, retail clerks and others whose variable pay hinges on economic cycles, a pay drop tends to be as steep as it is quick, said Sylvia Allegretto, an economist at the University of California, Berkeley. That's because sales-based compensation is more sensitive to swings in consumer spending.
"They're going to be hard hit, because tips, commissions, overtime and all those things, along with hours, are going to be cut," as the economy struggles, Allegretto said.
[Overtime during high unemployment is dysfunctional and systemically suicidal.]
The effect is hard to quantify because the Labor Department doesn't track pay for this group of workers as a whole, she said. But for many, the pain has been quick and deep.
Until last year, 58-year-old Michael Klein made about $125,000 a year selling Hummer SUVs at a dealership in Concord, Calif., near San Francisco. With 20 years' experience, Klein was accustomed to moving 15 to 25 vehicles a month. Then gas prices soared and loans dried up. So did his client base.
[Selling Hummers in the run-up to peak oil and the run-down of the ozone layer is also dysfunctional and systemically suicidal.]
Now Klein works seven days a week, 12 hours a day, just to sell eight cars a month. His income has shrunk by more than half.
[Not a viable job in the ecological age.]
Normally, he's paid solely through commissions. But when business suffers, his dealership pays a subsidy to make sure a salesperson's pay for a month is no less than $1,500. Recently, Klein has sold so few cars that for the first time he's qualified for the subsidy.
Klein, who's divorced with adult children, can afford about two-thirds of his mortgage payment. He's trying to re-negotiate his loan. In the meantime, his bank has sent him notices of late and insufficient payments.
"I said: 'If you can work with me, fine. If not, here's the house,'" he said. "They don't want the house."
Klein has quit traveling to see his daughter and grandchild in Las Vegas. He's stopped seeing movies and eating out.
But he clings to the spirit of a salesman. His new pitch to customers is that that Hummers and other SUVs can be just as economical as compact cars: They fit more people.
While earnings for commission-based workers drop quickly, those paid in wages will endure a somewhat slower pay decline this year, said Ken Abosch, head of the North American practice for Hewitt Associates compensation consultants.
A Hewitt survey of 640 companies found they planned to raise wages for salaried employees by 2.5 percent this year. That's the smallest increase since 1976. The companies said executive pay increases would drop from 3.8 percent to 2.2 percent in 2009.
But for millions of workers, the biggest problem is a shortage of hours available. Last month, the average work week fell to 33.3 hours. In January it was an estimated 32.9 hours - the lowest level since the Labor Department began tracking the figure in 1964.
More than 8.6 million U.S. employees are working part time because they can't find full-time work, according to department figures, the largest number recorded - and a 76 percent increase from 12 months ago.
For workers like Richard Thomas, that means getting by without the health insurance and other benefits afforded to many full time employees.
Thomas worked as a full-time truck driver until last summer, when business slowed. He was paid by the mile. As orders slowed, he sat idle for days at a time. He thought steady work back home in St. Louis would help boost his income. But he could find only a part-time job as a school-bus driver.
Thomas, 36, says he usually gets 25 hours a week of work. On good days, he finds odd jobs, like fueling up buses, to boost his pay. Lucrative gigs, like driving field trips, are handed out based on seniority, and Thomas said he rarely gets them.
The job is helping him pay rent and bills. Even without a family to support, there's no money left for frills. A typical night of entertainment consists of watching movies on his laptop. He spends much of his spare time hunting for work.
Because they're working, part time employees like Thomas aren't eligible for unemployment benefits or welfare. But he said he doesn't let that bother him.
"I would rather get one of those good jobs myself," he said.
[Huh? meaning a job at the unemployment office? - bad writing, unclear, bad ending.]
(This version corrects throughout that 8.6 million people are forced to work part time, a 76 percent increase; adds Jan. hourly figures in 29th graf; clarifies that Hewitt survey follows salaried employees in 28th graf.)
- Out of the mouths of babes and sucklings, by Keith Hudson, evolutionary-economics.org , Bath,England,UK.
After reading some pretty heavy and serious stuff about unemployment this Sunday morning, I decided to lighten my mood by reading Jeremy Clarkson's account in the Sunday Times of the fun he had when he and his equally juvenile colleagues had taken their TV "Top Gear" show around the world in stage format.... But he remains uninhibited and this is why he can write a longish article about his road show, then, at the very end, realizes that he's fast becoming an oldie (he's 48) and switches the subject completely in his last paragraph. And here it is:
"Make no mistake, I loved every minute of the whole exercise -- but I would have loved it so much more if I'd been 18. So listen up, children. Forget about getting a job. There aren't any. And forget your Facebook too. Just do your piano practice. Get good quickly -- there isn't a moment to lose."
Well said. Even before the credit-crunch there was already something like a million and a half unemployed young people (mainly males) in this country, left-overs from previous mild recessions and, of course, the remorseless drift into what academics call a "post-industrial service economy". That's true enough. The problem is that many of the "service" occupations are not so much serving the economy as servicing others who are servicing the economy. And those are the ones who are now being shelved whether they are loud-mouthed City traders or hairdresser assistants.
In other words -- as the present credit-crunch is now revealing in spades -- an increasingly automated economy really doesn't need full employment [at the 40-hour/week level] any longer. It was already the case that, in addition to the formally unemployed, we had large numbers of people who were early-retired, large numbers living only on welfare benefits, increasing numbers in prison and a ballooning proportion of old people. Apparently we could afford all that out of taxation -- except for a steadily increasingly national debt and a great deal of governmental jiggery-pockery with placing some debts in off balance-sheet accounts which the Chancellor doesn't need to mention to the public.
However, apres le deluge -- or should we say, pendant le deluge -- many American heavies -- economists and financial journalists -- are now saying that the pattern of unemployment that's now taking place suggests that something fundamental is taking place in the whole job structure of a developed country. Well, blow me down, hasn't that already been occurring? Hasn't this been the case since about the 1980s when the mainframe- and micro-computers started to revolutionize almost every aspect of production and commerce? And this followed by distributed desktop PCs, only now kicking in seriously?
What the heavies are really saying -- but are still reluctant to say so -- is that America is now beginning to experience what this country has been experiencing for the past 25 years already. (After all, we were the first into the Industrial Revolution. Why not the first into its Post-industrial successor, whatever it may be called ultimately?) Unlike Medieval times or the Industrial era, we simply don't need all fit adults to work any more. The overall economy and all the consumer goodies that we are able to make -- and use -- can manage on, What? 75% of [the workweek or] the "working" population? Perhaps 50% in 20 years' time? Who knows? These are just figures I've plucked from the air. But there are real figures somewhere and econometricians will use them in many PhD theses in later years.
[We did cut the 80-hour workweek of 1840 to 50% of that by 1940...]
The depression now beginning is not going to be like that of the 1870s or the 1930s. The computer means that a quite new phase in economic history is beginning. All sorts of radical things will have to slowly emerge by way of education, skill-training and job-sharing before full employment and a self-respecting role in society for all adults will start to happen again. Otherwise, a great many gates and electronic keypads are going to have to be made.
[...and wasted in city dumps.]
Keith Hudson, Bath, England, www.evolutionary-economics.org
3/07/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Four-day work week working out for small towns, By Mindy Honey, Branson Daily News via bransondailynews.com, Missouri,USA
In the fall, Galena City Hall began closing on Fridays as a way of cutting costs and in December, Rockaway Beach began doing the same.
City officials from both towns say, so far, they have been able to keep up with the work during the short weeks and the money saved is coming in handy.
"It has been a positive thing for us," said Galena City Administrator Barbara Booth. "If it hadn't been for the (March 2008) flooding, we'd be in a lot better shape."
In March 2008, a good portion of Galena was under water when the James River jumped its banks due to heavy rains. Booth said while the city has received some funds from the Federal Emergency Management Agency, the city has had to foot a good portion of the cost of repairs on its own.
"That was devastating to our small town," she said.
Booth said the city was hoping to save money when its employees dropped from five eight-hour work days down to four, but has had to put the savings to work, fixing what damage Mother Nature caused. The goal is to eventually put that money toward projects.
"We have sidewalks we'd like to put in and we'd like to do road work," Booth said.
And while taking a pay cut and having fewer hours to complete their work hasn't been easy, Booth said she sees the need.
"We are all going to have to tighten our belts," she said.
She said she expects the mayor and city council to keep employees on the four-day work weeks for a while.
Rockaway Beach City Clerk Susan Kettelkamp said city employees are also learning to deal with shorter work weeks.
"It is working out pretty well," she said. "We are able to save money on our budget and that is our whole reason."
During a recent ice storm, some of the city employees did have to put in extra hours.
Rockaway Beach city officials did not have exact numbers on how much they are saving, but know it has helped.
"Gross payroll is down," Kettelkamp said.
Rockaway Beach Mayor Larry Cline said the city is taking it one month at a time.
"As the season gets moving, I see us going back to a regular work week. I'd rather see them working 40 hours a week. I'm pleased we are saving money, but I am not pleased my employees are having to take a cut."
He said the city employees have made adjustments, like staggering their lunch breaks so during the four days city hall is open, it is open all day.
- EMPLOYERS CUT 651000 JOBS IN FEBRUARY; US jobless hit 25-year high, Arab Times via arabtimesonline.com - Kuwait.
WASHINGTON, March 6, (Agencies): The US economy hemorrhaged 651,000 jobs in February as the unemployment rate surged to a 25-year high of 8.1 percent, according to official data Friday tracking an ever-deepening recession. The number of non-farm job losses in the Labor Department report was in line with most forecasts but underscored the dire state of the economy as companies axe jobs to cope with an intensifying slump. The department also revised upward its estimates for losses for the previous two months - 655,000 in January from 598,000, and 681,000 in December from 577,000. The figures made December's losses the worst on record since October 1949, officials said. The unemployment rate rose from 7.6 percent in January to 8.1 in February, the highest since December 1983. "It's ugly and aways seems to be uglier than the previous month," said Robert MacIntosh, chief economist at investment firm Eaton Vance. "It's a deep and dark recession."...
Companies struggling with falling revenues and tight profit margins are slashing jobs in huge numbers, a step that is forcing households to further scale back spending, creating a vicious cycle for the bleeding economy. "The situation is getting worse, not better," said Mohamed El-Erian, the chief executive of bond giant Pimco. "What today's number tells you is ... even the profitable firms are shedding labor in order to position themselves for a more difficult outcome," El-Erian told Reuters Television. More worrying, a measure of the unemployed, people working part-time for economic reasons [ie: forced to work part-time though prefer full-time] and those who have given up looking for work surged to 14.8 percent in February the highest on records dating back to 1994, from 13.9 percent in January. The Labor Department also noted a sharp rise in the number of people experiencing long spells of unemployment, with 2.9 million people having been unemployed for 27 weeks or longer in February, compared to 1.3 million in January. In January, the length of the workweek was steady at 33.3 hours, matching a record low registered in December. The factory workweek fell to 39.6 hours. Weekly overtime hours at factories slipped to 2.6 hours in February from 2.8 hours in January. Average hourly earnings inched up to $18.47 from $18.44 in January.
[So workweek reduction is happening anyway despite official denials, so let's grab ahold of it, redesign it in the best possible way such as fluctuating adjustment of the workweek against employment coupled with automatic overtime-to-training&hiring conversion, and let's quit straining to uphold a 1940 level of the workweek regardless of how little real benefit we then get from wave after wave of worksaving technology and let's just share the vanishing natural market-demanded work. What's the real difference between the active luddism of blocking technology in the first place and the passive luddism of blocking the benefits of technology in terms of more financially secure free time for everyone? And what's the point of all our lip service to "freedom" and "liberty" if we block the most fundamental freedom, free time - without which the other freedoms are inaccessible and meaningless?]
3/06/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- 4.5-day Work Week System Proposed, Editor:Sharon Lee, Source:www.enghunan.gov.cn via rednet.cn, China
[Looks like China may be seizing from Japan and South Korea the fumbled "football" of history in terms of engineering full employment and maximum consumer base via workweek reduction and labor-price [pay] maintenance or heightening -]
China should introduce a 4.5-day workweek schedule to replace the current five-day workweek, said a member of China's top political advisory body ahead of the beginning of the organization's annual session.
Zhang Xiaomei, a well-known businesswoman in China's beauty industry and member of the 11th National Committee of the Chinese People's Political Consultative Conference (CPPCC), is expected to submit the change of workweek proposal together with 16 other proposals on Tuesday.
China adopted the five-day workweek system in May 1995 to replace the six-day workweek, aiming to improve work efficiency and stimulate the service industry such as tourism.
Currently, employees work eight hours a day, five days a week in China.
However, it is estimated that efficient working hours only account for 70 percent of the total working time in China, which means an average of 2.4 hours per day are wasted.
Zhang criticized the current workweek system for its low work efficiency and because it hindered employees from improving their quality of life since they only have two days a week to rest.
According to Zhang's plan, people will work four-and-a-half days, or 36 hours a week.
With many developed countries adopting a four-day or four-and-a-half workweek system, Zhang said China should follow the global trend and revise its current system.
Under the proposed system, Zhang believed not only work efficiency and employees' quality of life will improve, but also new jobs may be created.
It is calculated that 6 percent more jobs will be needed if employers shorten working hours by 10 percent. Employment has become a tough task for government at all levels in China amid the current global financial crisis.
In 2009, China aims to create 9 million new jobs in urban areas to keep the registered unemployment rate under 4.6 percent.
However, whether wages should be reduced for shorter working hours remains an important factor in terms of the feasibility of the proposal. If the wages of employees aren't cut, the operating costs of employers will increase. On the other hand, if employees' salaries are cut with fewer work hours, their living standard will decrease.
[and more importantly for long-term system sustainability, the domestic Chinese consumer base will decrease.]
In addition, it is still unknown whether the reduction of only half a workday would be agreeable to employees. "I don't mind the reduction of my salary, but half a day is too short to do anything," said Liu Yi, a 25-year-old woman working in a Beijing museum. "I'd rather work four days a week and receive 80 percent of my current salary."
Still, the reduced workweek would influence the operation of enterprises and institutions to a large extent.
"I have no objection to the proposed 4.5 workday system," said Beyond Sun, senior manager of a magazine in Beijing, "But as a manager, I hope the longer time for people to rest will not influence the work efficiency of my employees. Many of them can't focus on work after golden week holidays as they had too much fun during their time off! Anyway, everyone must obey it if the government enacts new regulations concerning this system."
[So fire the people who can't "change channels" efficiently. You've got over-enough job candidates!]
Currently, Chinese employees work 250 days a year. They have 11 legal paid holidays, while employers don't pay for weekends unless employees work on Saturdays and Sundays.
- [And now, from the mega to the mini level, proving Timesizing can work at any level.]
Bula may cut 12 jobs - City's budget deficit grows, By ELLEN KOLMAN - Staff Writer - firstname.lastname@example.org, Ashtabula Star-Beacon - Ashtabula,OH,USA
ASHTABULA - More than 12 city jobs could be eliminated to help Ashtabula overcome the budget deficit in the general fund.
City Manager Anthony Cantagallo presented council with a list of proposed budget cuts during a special meeting Thursday. The proposal involves laying off workers in 12 departments. The proposal would provide an overall savings of $645,000.
The meeting began with a revenue report from City Auditor Michael Zullo, who said the city projected a deficit of $246,771 on Feb. 28, but the actual deficit was $404,797.
"This is due to a cut in state funds and a lack of city income-tax revenues, due to businesses closing and the general economic climate. It is not just us, but many cities are in the same fix," Zullo said. "Financially, we are in dire straits. We need to cut and save $600,000 from somewhere."
Cantagallo then presented his proposed layoff list and offered other possible solutions to consider in the meantime.
"Many of these people are under union contracts, and working with the unions will take at least four to six weeks," he said. "We do not want to lay anyone off if we can come up with workable ideas."
One option Cantagallo presented was every employee, union and nonunion, would take a 20-day vacation without pay.
Ward 4 Councilwoman Julie Lattimer asked, "What about taking two hours off a day across the board?"
City Solicitor Michael Franklin said his staff of three employees agreed to go to a 32-hour workweek to save the city money.
"We will adjust the salaried employees appropriately. This is one way to save money, if we are all flexible," he said.
Council Vice President Betty Kist responding to Cantagallo and Lattimer, asked about the rules and regulations of the unions and how they would react to the city adjusting hours or pay rates.
"I have not presented this (layoff proposal or any other proposal) to the union yet. I want a decision here first, and then we'll go to the union," Cantagallo said.
Ward 3 Councilwoman Ericka Severino said she did not want to see anyone laid off, especially the police, fire and sanitation workers, and that to do so would not be providing citizens a safe environment. Severino then suggested saving money by having city police officers park their cruisers during their nonduty hours and discontinuing the use of city cell phones.
Severino asked Cantagallo whether he would consider implementing her suggestions, and he said he would "put it under advisement."
Council President Rodger Altier said: "No one is immune to losing their job. This is a worldwide problem, and it is no one's fault here. Things are not going to get better; they will only get worse. We have to do something now, or in a few months we have to shut the city down.
[And if you keep cutting jobs for a few, and a few more, and a few more... instead of just trimming hours for all on a fluctuating workweek basis, you'll have to shut the city down anyway.]
"I am sorry, Mr. Manager, but we must lay people off," he said.
[Here's a suicidally unimaginative council president - how does he expect people to survive without jobs? and how does he expect the whole system to survive without people? - he's also ignorant of his own nation's 150-year history of workweek reduction.]
Altier said: "I am willing to give up my salary now. I am not saying anyone else has to. This is what I am doing; I can contribute it back to the city."
Ward 1 Councilman Joseph Rose asked why the city manager and the city solicitor's offices would be cut by only $20,000, while the fire and police departments would be cut by more than $100,000.
Altier said the city manager must move on his proposal directly and how he implements the budget proposal "will be on him."
3/05/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
3/04/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Furloughs May Be Smarter Than Layoffs - Companies might prefer furloughs to downsizing, but they need to beware of certain pitfalls, by Eric Bellafronto and Blaire Cleveland, Law.com - San Francisco,CA,USA
These tough economic times are forcing employers to make difficult decisions to keep their businesses viable, including laying off employees to reduce payroll costs.
More employers, however, are considering alternatives to layoffs. These alternatives allow employers to retain staff, particularly top talent and employees with institutional knowledge. Savvy employers understand that keeping tenured (and often loyal) employees on-board in anticipation of an inevitable upswing in the economy will also reduce the need to re-hire and re-train personnel -- a costly and timely endeavor.
Although reducing employee salaries may be an easy solution, such reductions are often rejected as too demoralizing. Instead, most employers seeking to reduce labor costs without layoffs are considering two alternatives: mandatory furloughs and reduced work hours. When done correctly, these can result in cost savings, but there are important legal considerations to keep in mind.
Mandatory shutdowns are not new. Many employers already shut down all or part of their operations during slow times, such as the winter holiday season. As economic pressure builds, however, employers with holiday shutdowns are expanding the practice throughout the year, while employers who have not previously implemented furloughs are now considering them. Other employers prefer simply to reduce operations on a daily or weekly basis, such as reducing the workweek to four days.
Employers often ask if they can reduce the pay and work schedule for employees classified as exempt from overtime pay under the Fair Labor Standards Act. For example, an employer may want to shut down one day a week -- Friday, for example -- and reduce its payroll costs by 20 percent. Such a plan works well for nonexempt employees, who are paid only for the hours they actually work. The question is trickier for exempt employees, however, who potentially could lose their overtime exemption through such a plan.
Under the federal FLSA and most state laws, exempt employees must be paid the same minimum salary ($455 per week under federal law, and higher in some states) for each pay period in which they perform any work. In other words, if the 20 percent pay cut would bring the employees' salaries below that threshold amount, it would threaten their exempt status.
An employer also may not deduct compensation from an exempt employee's paycheck during a current pay period based on a reduction in work time. The reason is that exempt employees who perform any work during a workweek generally must receive their entire salary for that week, or risk losing the overtime exemption. Thus, if the company quickly decided last week to shut down for the day on Friday, cutting an exempt employee's current paycheck by 20 percent to reflect that Friday off could eradicate the overtime exemption.
Does this rule out cost-saving shutdowns? No. Courts have recently held that employers can make prospective reductions in exempt employees' compensation with a prospective adjustment in scheduled hours. These courts reasoned that, although the governing federal regulations preclude deductions from pay for current or past work periods, they do not preclude prospective reductions implemented for future work periods.
(Warning: State law may change the result. For example, reducing exempt employees' schedules in combination with a salary deduction will defeat the overtime exemption, according to the California labor commissioner.)
Accordingly, a less risky alternative to reducing exempt employees' schedules may be simply to reduce their pay without dictating the hours they work. The downside, of course, is that without a corresponding reduction in schedule, exempt employees may become demoralized by the appearance of working the same amount for less pay.
GONE FOR THE WEEK
Because reduction of exempt employees' work hours poses significant legal risks and reduction of exempt employees' salary can be seriously demoralizing, employers might consider implementing furloughs or shutdowns on a workweek basis.
A furlough of exempt employees for an entire workweek would not jeopardize the exemption because an exempt employee is not entitled to a weekly salary for any week in which no work is performed. Accordingly, it is best that any furloughs be for full weeks that coincide with the workweek to reduce the risk of losing exempt status.
If implemented correctly, this is the safest option. But there are risks:
- Absolutely no work permitted
A problem may arise where exempt employees perform seemingly insignificant "work" while on furlough. The popularity of BlackBerrys and ease of remote connections or voicemail makes it likely that exempt employees may use these tools to "work" while on furlough. The performance of such minimal work, if "suffered" by the employer, creates an obligation to pay the exempt employee's full salary.
To avoid this problem, employers should inform exempt employees in writing that no work is authorized during the furlough period without express advance written approval. The discretion to authorize work should be limited to one or two high-level executives to minimize the potential that exempt employees perform work during the shutdown.
- Mandatory use of vacation
Employees may want to draw from vacation or paid time off to supplement their income during the furlough. Similarly, employers often want to compel use of vacation or PTO during a furlough to reduce the liability of the paid time from the books. Whether employees are given the option to use accrued vacation or its use is mandated during a furlough, employers must be cognizant of applicable laws that may restrict their options.
Mandatory use of vacation saves employer resources by using up paid vacation. Federal law tends to permit this practice, but not all state laws allow employers to mandate vacation use during a furlough. For instance, California prohibits "use it or lose it" policies, and "reasonable notice" must be provided before an employer can deprive an employee of accrued vacation or PTO.
In addition, mandatory vacation use raises issues where employees do not have sufficient vacation accrued to cover the entire furlough. An employer can permit vacation advances, but it must determine how its policy and the governing state law treat negative vacation balances if some employees quit or are terminated before advanced vacation pay is earned. In reality, such advances may be difficult or expensive to recoup.
Generally, the safest course is to allow employees to elect whether to use vacation or PTO during a furlough. This allows exempt employees who want to be paid during a furlough to "burn" their PTO voluntarily without jeopardizing their exempt status.
If exempt employees choose not to use their PTO and do not perform any work, the employees' exempt status remains protected, and the employer gets the economic benefit of entirely avoiding payment of the employees' weekly salaries.
- Advance notice
Whether an employer decides to impose mandatory furloughs or reduced schedules, it should provide employees advance notice. Many states require such advance notice, and some specify the amount of notice for any reduction in compensation. Written notice is advisable to create a clear record of the information conveyed, even if not required by state law.
In addition, employers must consider whether any employment agreement or applicable law requires consideration for modification to the terms of employment. Even where employees are governed only by employment policies that the employer reserves the right to terminate or modify, some states do not permit those modifications without employees' express knowledge and consent. Most states, however, permit an employer to modify a unilateral employment contract and deem that someone's continued employment constitutes acceptance of the modification without additional consideration.
Furloughs for longer periods or significant cuts in work hours may trigger federal Worker Adjustment and Retraining Notification Act and some state WARN laws. The cut in hours would likely have to be 50 percent or more over a relatively lengthy period for such laws to apply, but employers making significant cuts should speak to counsel.
- Remember any CBAs
Employers considering mandatory furloughs should weigh the impact of any collective bargaining agreements on these policies. Existing provisions of CBAs may restrict an employer's ability to furlough employees. And, in the absence of provisions on furloughs, employers may be required to bargain before implementing a furlough or requiring the use of vacation or PTO during the furlough.
In sum, employers should evaluate whether furloughs present an alternative to layoffs, thereby keeping more persons employed, maintaining institutional knowledge, and reducing the likelihood of lawsuits or grievances. And by following the smart practices discussed, the furlough process can proceed smoothly, with less risk of legal problems.
Eric Bellafronto is a partner and Blaire Cleveland is an associate in the San Jose, Calif., office of Littler Mendelson, which represents employers. They may be contacted at email@example.com and firstname.lastname@example.org.
- More companies turn to furloughs to save money, jobs, by Laura Petrecca, USA Today, p. 1B.
Adam Jadhav will film a humorous video that he'll post on YouTube.com. Shelley Cox will finish the classroom observation hours needed for her elementary education license. Rebecca Evans will refurbish her bathroom before taking a boat trip off the coast of North Carolina. The activities vary, but each of these folks has the same reason for their free time: Employers forced them to take a short, unpaid leave.
To curtail costs while avoiding the strain of layoffs, companies, colleges and state governments are mandating temporary hiatuses, commonly known as furloughs. RV-maker Winnebago Industries, the state of California, the University of Arizona and USA TODAY parent Gannett are among dozens that have used this tactic to save millions in payroll and other expenses.
"Furloughs are really coming under much greater consideration by employers," says Julie Gebauer, managing director at human resources consulting firm Towers Perrin.
Historically, industries such as heavy manufacturing, retail and airlines have furloughed employees when demand for their products or services slowed. But a growing number of other sectors have put this option on the table when analyzing ways to slash expenses, she says.
And more are expected to.
Window- and door-maker Pella recently reviewed a range of cost-cutting options, including layoffs, and went with four-day workweeks and one-week furloughs for a portion of its hourly employees.
It was a hard decision, says human resources Vice President Karin Peterson, but layoffs would have had "a significant impact" on morale and the company culture. With the unpaid leave, Pella saves money, and employees keep their jobs and benefits.
"We're making decisions that impact (workers) and families," she says. "The options that we're taking aren't the lowest-cost, but they're a balance between the needs of our business and the needs of our people."
Employees given one-week furloughs are eligible to apply for unemployment compensation in some states.
"People aren't getting the hours, and they're not getting the compensation, and unemployment is only a portion of what one can earn," Peterson says.
Paychecks may be pared, but most folks on leave still have to cover monthly expenses such as food, utilities and child care. Those who want to do something ambitious with the free time - such as tackling nagging do-it-yourself home repairs - still have to pony up for supplies.
"As a single mom, this is gonna hurt quite a bit," says Evans, who works in marketing.
She also echoes the sentiments of many when she says, "But I'm just happy to have a job."
Better than layoffs
It's a tough break, but furloughed employees could have it much worse, says Marion Crain, an employment and labor law professor at Washington University in St. Louis.
Employees are often "upset and angry" when they first hear about the unpaid leaves, she says. But they're better off than many who'll be handed pink slips or forced to take less pay for the same amount of work.
More than 3.6 million people have lost jobs since the recession began in December 2007. And 7% of the 245 U.S. companies surveyed by employee benefits consultancy Watson Wyatt Worldwide have sliced worker salaries.
Furloughs are "actually a job-saving action by the employer," says Crain.
Yet, the motivation behind furloughs is not entirely altruistic, says Julie Gebauer. Employers who have temporary hiatuses rather than layoffs save on severance costs, as well as future rehiring and retraining expenses when an economic turnaround eventually comes.
Many of those employers will dramatically reduce payroll expenses with the furloughs. For instance, furloughs and salary reductions for Maryland state employees are scheduled to save the state more than $34 million during the 2009 fiscal year.
Some companies have furloughs because layoffs just aren't an option.
Winnebago has already had "significant layoffs," says spokeswoman Sheila Davis. "When you reach a certain point in your employee base, it is important to preserve your corporate structure so that when the market returns - which we know it will - we will have the employees and resources to respond."
Furloughs are not simple to implement, says Doug Christensen, a partner in Dorsey & Whitney's Labor and Employment law practice group in Minneapolis.
There're a bevy of complex legal issues that companies must navigate, he says, such as:
- Firms need to check for any pre-existing employment agreements that will allow workers to claim that they were "legally promised" certain pay per week, month or year.
- Firms with so-called exempt, or salaried, employees must be careful in how they structure the leaves to make sure that the furlough is not done in a way that converts those exempt workers into non-exempt employees who could try to claim overtime pay.
- If an exempt employee performs any work at all during a week-long furlough - such as answering an e-mail that comes through a work BlackBerry - he or she is owed the entire week's salary.
In addition to legalities, employers also have to worry about staffing levels and about how workers will react.
"Morale is in the gutter" in Atlanta, where firefighters have been forced to take furloughs that reduce their work hours and pay by 10%, says Jim Daws, president of Local 134 of the International Association of Fire Fighters.
Response teams are understaffed, he says, making for a "greatly increased" risk for citizens - and firefighters - to get hurt. Many of those firefighters are also exhausted because they're working second and third jobs for extra cash, he says. "It's a terrible situation."
Pella created a communications plan and brought in state unemployment staff to answer benefits questions. But even with those steps, "There's going to be some level of morale deterioration whenever you have conditions like these, because there is fear," says Peterson.
Clemson University in South Carolina, which began five-day leaves on Dec. 1, took an unusual approach to ease some of the strain. It set up a "Furlough Relief Fund" to support those "who face the most severe financial hardship" during their leaves.
More than 300 donations totaling $71,363 came from faculty, staff, students and trustees. Individual amounts ranged from $2 to $5,000. Fund managers looked at factors such as salary level, total household income and family size before distributing money to 158 employees.
Some businesses are running promotions to ease the furlough sting. Last Friday, the Ikea in West Sacramento offered a free breakfast (eggs, bacon, potatoes and coffee that sells for $1.98 normally) to furloughed California state workers. Twice a month, Squaw Valley USA ski resort in Lake Tahoe offers the state workers a lift ticket for $30 instead of the regular $79 price.
More furloughs in more industries are likely.
Nearly one in 10 employers expect to implement a shortened workweek within the next 12 months, according to a study by Watson Wyatt. Another 6% will force mandatory furloughs, and 9% say they'll have voluntary furloughs.
Fire union chief Daws expects the firefighters' furloughs to extend beyond the initial cut-off date of June 30. "It doesn't look like there is any end in sight" to Atlanta's financial woes, he says.
But company executives and workplace experts don't expect mandatory furloughs to remain a commonly used cost saver once the economy recovers.
In addition to the "tricky" legal rules that apply to furloughs, they can also raise "significant morale issues," says employment lawyer Christensen.
Pella, which is keeping the option of more mandatory furloughs open for now, would rather go with voluntary furloughs, as it has done in the past.
It's better "to give people some control over their destiny," says Peterson.
As for the mandated furloughs, "My preference is to not always have to go there. ... But as an alternative, it's certainly better than mandatory layoffs," she says.
- Jaguar Land Rovers Workers Agree to Pay Cut, Shorter Workweek, By Ward's Staff, Ward's Auto via WardsAuto.com (subscription) - Southfield,MI,USA
Jaguar Land Rover, which was acquired from Ford by India's Tata last year for $2.3 billion, already has laid off 450 workers this year...
Under conditions of the [new] proposal, the workweek at the plants will be cut to four days and pay will be frozen for one year...
- Union membership up in Pa., Del., down in NJ, by Jane M. Von Bergen, 3/04 Philadelphia Inquirer - Philadelphia,PA,USA
The number of union members rose in Pennsylvania and Delaware, but declined in New Jersey in 2008, the U.S. Labor Department reported.
In Pennsylvania, union ranks swelled by 17,000 to 847,000 in 2008 and union members constituted 15.4 percent of the workforce, up from 15.1 percent in 2007.
In Delaware, membership rose from 47,000 to 52,000, with the percentage rising from 12 percent to 13.4 percent.
In New Jersey, the number of union members declined by 45,000 to 703,000, and union members constituted 18.3 percent of the New Jersey workforce, down from 19.2 percent in 2007.
Pennsylvania, New Jersey and Delaware all have higher union density than the nation as a whole.
In 2008, union members nationwide constituted 12.4 percent of the workforce, up from 12.1 percent the previous year. That was the second annual increase after decades of decline, bringing union membership up by 428,000 to 16.1 million.
Posted by phillycarp 05:43 PM, 03/04/2009
...You have off weekends?.. work a 40 hour workweek?.. thank the unions for that!
- Canfor cuts lumber production, Reuters via reuters.com - USA
* Production lowered by about 284 mln board feet
* Will reduce workweek schedules at some units
March 4 (Reuters) - Canfor Corp (CFP.TO), a forest products company, said it would cut lumber production at its sawmills in Western Canada due to slumping demand and poor prices for softwood lumber.
Canfor, which is Canada's second largest producer of softwood lumber, said annualized lumber production will be reduced by about 284 million board feet as a result of its actions.
The company said it will reduce workweek schedules at some of its sawmills and further curtail its Isle Pierre and Wuesnel sawmills for a one week period, beginning March 15.
Shares of the Vancouver, British Columbia-based company closed at C$4.93 Tuesday on the Toronto Stock Exchange.
($1=1.291 Canadian Dollar)
(Reporting by Isheeta Sanghi in Bangalore; Editing by Anil D'Silva)
- San Bernardino County measures approved to save money, By ZEKE MINAYA, Press-Enterprise via pe.com - Riverside,CA,USA
San Bernardino County supervisors approved three cost-cutting programs Tuesday that trim the workweek of the county's administrators and offer cash incentives to employees to retire before the next fiscal year.
The ordinance signals that county negotiators will seek similar concessions in coming contract talks with the unions that represent county employees, authorities said.
"We want to set the tone," said Andrew Lamberto, head of the county's human resources department. "We are prepared to take these cuts as a ... group."
Lamberto said formal talks with the San Bernardino Public Employees Association would open in late March.
The union represents more than 12,000 county employees. As well as possibly asking for a cut to workers' hours, county negotiators may request that employees forgo a 2.5 percent pay raise scheduled for the next fiscal year, which begins July 1.
"We haven't asked anything like that formally," Lamberto said. "The county has a menu of cost reductions (to choose from)."
Bob Blough, general manager of the employees association, said he hopes that county negotiators are open to exploring a full range of options, which do not include layoffs, as the county grapples with a roughly $80 million budget shortfall in the coming fiscal year.
County officials also will enter labor talks with representatives of sheriff's deputies, public attorneys, nurses and probation officers.
Tuesday's ordinance would allow the workweek of county administrators to be cut by as much as four hours a week, if rank-and-file employees accept a similar reduction during upcoming contract talks.
The measure also extends to administrators a program already available to county employees that allows a maximum of 80 hours of unpaid time off without altering benefits.
The ordinance includes an early retirement program that would award participants $1,000 for every year of employment.
[There are lots of different ways to reduce worktime per person and spread around the vanishing work to everybody.]
The amount would be paid in five annual payments. Positions vacated would remain empty for five years, Lamberto said.
Several jobs, such as certain law enforcement and public safety positions, are not eligible, county authorities said.
Reach Zeke Minaya at 951-368-9539 or zminaya@PE.com
3/03/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Koreans Take [Hours and] PayCuts to Stop Layoffs, By EVAN RAMSTAD, Wall Street Journal, front page.
[Another time-blind reporter - or are his editors still paranoid about work sharing?]
ANSAN, South Korea -- Shinchang Electrics Co. offered union leaders a proposal that would reduce [hours? and] wages at the auto-parts company by 20% in exchange for no layoffs among its 810 workers this year.
[This reporter is so time blind that he doesn't even ask if it's in terms of an hours cut that this reduction has been negotiated - and no, it's not a trivial question - it's a vital matter for the future of us all.]
Eight days later, the union agreed.
The deal is one sign of the unusual way South Korea is grappling with the global economic crisis.
[This guy hasn't been reading his own American news - trading unneeded production time for job security happens hundreds of times a day, every day, in every recession, in the USA.]
Across the country, executives, salaried employees and hourly workers [first mention of time] at companies from banks to shipbuilders are joining to slash [hours? and] wages and other costs with the goal of avoiding layoffs.
"We have to go through this together. We are colleagues and friends," says Shim Ho-yong, a seven-year employee who molds ignition components for Shinchang. "If one disappears, it's awkward and uncomfortable."
[Same for many American employees, but some CEOs and management schools with a macho divide&conquer fantasy have tried their damnedest to change this.]
The global recession has been marked by a steady onslaught of layoff announcements around the world. Even in Japan, once the home of lifetime employment [second mention of time], big-name firms like Sony Corp. and Toyota Motor Corp. have eliminated tens of thousands of jobs in recent weeks.
[Unless Japan uses timesizing to reverse its kamikaze 1989 switch from lifetime employment to American-style downsizing (thus betraying the central precept of its American mentor, W.Edwards Deming: "Banish fear from the workplace") at the national level as well as the levels where it has already started (municipal and prefectural), it has nothing to offer, cannot compete with South Korea, and will join the rest of us stupids in the Third World.]
In South Korea, job preservation is the government's biggest goal in shaping its response to the onset of recession, President Lee Myung-bak declared in January.
[At last, a glimmer of intelligence! Obama better get onto this fast or we're toast.]
Last week, leaders of major industry groups, unions, civic groups and government ministries struck a "grand bargain for social unity." Under the plan, which isn't legally binding, employers won't fire workers, unions will accept wage freezes or cuts, and the government will provide tax breaks to companies that preserve jobs.
The handshake deal raises the question of whether South Korea can survive the global recession while hanging on to traditional views about work, which include a deep aversion to layoffs.
[Now there's a stupid westerner's statement! It's our departure from traditional views about the primacy of the job markets rather than financial markets that has ruined our management discipline and made us the major cause of this global downspin.]
The country accomplished one of the great economic miracles of the 20th century with government-led development that embraced centuries-old notions of putting community ahead of individual achievement.
Until the 1997-98 Asian financial crisis, laying off workers was illegal, in large part to preserve that deep sense of community. And even during that crisis, which South Korea weathered better than most countries [because] layoffs only happened when companies collapsed -- not when they were trying to save costs, as is happening in much of the world today.
Some other countries and companies are also attempting to stave off massive job cuts by asking workers to scale back hours, take pay cuts or schedule time off without pay.
[AT LAST this writer has mentioned (or been permitted to mention?) the central strategy, cutting HOURS not JOBS - after bloviating till now on the secondary issue, cutting pay. And he STILL hasn't mentioned it directly, just with that "also." What are he and his corporate masters afraid of?! How ironic they are so desperately fighting the one strategy that could save them! Is he going to mention that South Korea is in the middle of a seven-year (2004-2011) staged four-hour cut in the national workweek, staged by size of company? No. We'll have to hotlink that story. Here's one of them, "Labor, management move toward pivotal changes" on 1/09/2004 #6.]
Last week, Ford Motor Co. Chairman Bill Ford and Chief Executive Alan Mulally agreed to take 30% cuts in salary for two years to help win union support for capping wages. In Canada, a United Steelworkers union of nearly 600 salaried employees agreed in January to a four-day work week to avoid layoffs.
However, no place seems to be making such a coordinated national push as South Korea. It's too soon to tell precisely what the country's no-layoff drive will produce, whether a viable means to cope with recession or a mere delay of painful job cuts.
[Cut the workweek enough and not only are there NEVER any job cuts but neither do wages go down because you avoid a wage-depressing labor surplus. Push the workweek down further, engineer a perceived labor SHORTAGE, and you get wage going UP flexibly by market forces.]
Economic indicators -- led by a sharp drop in exports, which account for nearly two-thirds of the country's gross domestic product -- show that South Korea is on the verge of its worst downturn since the country industrialized in the 1960s. Today's global recession is likely to hit South Korea harder and longer than the Asian financial crisis did largely because of the disintegration in the exports market.
[Ah the old exports song again - what a stupid, one-industry subsidizing distraction. It's domestic consumption that counts - you have NO CONTROL over export markets - and you control domestic consumption by adjusting your workweek.]
Companies' survival may ultimately hinge on the ability to cut jobs.
[Keep hoping, you moron, that all economies will be as stupid and suicidal as yours!]
"If exports continue to fall, companies will either have to take a loss or they will have to make a hard decision," says David Eldon, a former chairman of HSBC Holdings PLC, who served on an economic advisory committee to South Korea's president for the past year.
For now, companies across a range of industries are holding firm. In the southern city of Gwangyang, steel maker Posco is wrestling with a problem never faced in the company's 41-year history: how to reduce production as world-wide demand slows. So far, the company hasn't cut any jobs.
South Korea's unemployment rate hit 3.6% in January, compared with 7.6% in the U.S. and 4.1% in Japan. Job growth turned negative only in December.
Many developing countries still study South Korea because of the way it embraced global trade [not so smart] and built local firms into world-class competitors [slump-vulnerable egotrip alert] in industries such as electronics, cars and steel. Last week, Iraqi President Jalal Talabani spent four days in South Korea visiting factories and learning about its rapid economic development.
"In a way, for the brighter future of the global economy, South Korea has to be successful in getting through this crisis," says Jun Kwang-woo, who just finished a yearlong stint as the country's chief financial regulator. "If we are, other countries will follow our footsteps. Otherwise, they will be cautious about globalization."
A major factor behind the push to save jobs is avoiding the acrimony and violence that occurred when South Korean companies attempted layoffs in the 1997-98 crisis. At that time, the International Monetary Fund and others loaned South Korea about $60 billion [ohoh, the IMF's toxic tonic, Guyana koolaid]. The loans required the country open its stock market and banks to foreign investors, lift constraints on *currency trading and reduce corporate debts.
[In other words, pull down your pants and bend over.]
It also forced South Korea to change the layoff law to allow healthy companies -- or more importantly, the foreign investors who would take over poorly performing Korean companies -- to restructure as they saw fit.
[American & IMF policy = suicide, everyone else first.]
"The concept of lifetime employment vanished and it was shocking," says Kim Kyeong-won of Samsung Economic Research Institute in Seoul.
[You need American 'help' like you need a 17th-century barber to come and 'bleed' you back to health.]
The government passed a law in February 1998 that let companies impose layoffs at will. But because of union pressures, no South Korean company attempted to do so until July of that year, when Hyundai Motor Co. announced it would fire 1,600 of its 36,000 workers. In response, the company's union shut down and occupied its main factory for a month. The strike ended when Hyundai agreed to lay off only 277 workers, most from its cafeteria service.
Overall, nearly one million people lost their jobs during that crisis, largely a result of major conglomerates closing and weak subsidiaries merging. When South Korea started to recover, companies compensated for union resistance to job cuts by hiring people in lower numbers than before. It took two years for employment to climb back to its pre-crisis level.
[The more you lay off, the more you lay off.]
In the third and fourth quarters of last year, job growth trailed the nation's GDP growth, as it did for portions of the past few years. As a result, South Korean companies have some room now to hold off on job cuts. "They didn't go through a boom in employment so they're more covered on the way down," says Fred Neumann, economist at HSBC in Hong Kong.
Most of the hiring that did occur happened in temporary jobs, where workers by law can only stay at a company for two years and are provided few benefits. In a 2006 report, the IMF expressed its dissatisfaction with the country's rigid labor market [oh please, what about our downwardly rigid workweek and upwardly rigid pay regardless of productivity - except for CEOs, regardless of screwup?!!], saying the inability of management to cut jobs and the related rise of the use of temporary workers had worsened income inequality in the country.
[What a poisonous stupid agency the IMF has become! "Here, drink some of this nice hemlock!"]
The current economic crisis hit South Korea later than other countries because its banks had little exposure to distressed property investments in the U.S. But South Korea was slapped hard when the banking crisis turned into an economic one, leading to job losses and lower consumer spending in the U.S. and Europe.
[There were already PLENTY of job losses in the U.S. and consumer spending would have been lower if banks hadn't been shoving more loans down people's throats regardless of their credit worthiness.]
Demand for the electronics, steel, cars and other products South Korea sells to those places fell sharply, sending its fourth-quarter gross domestic product down at an annualized rate of 21%, the biggest drop of any developed country -- and more than three times the U.S. rate of 6.2%.
South Korea didn't face a drop in exports [red herring] during its two previous recessions, which meant it could recover relatively quickly. [It recovered quickly because it hadn't destroyed it employment base.] Today, exports account for about two-thirds of South Korea's near-$1 trillion GDP, up from about one-third in 1998. [This is the IMF's toxic work. Better get back to 1998! - You have NO CONTROL over export markets.] And the shock of a rapid drop in shipments -- down 17% in February from the previous February after a decline of 32.8% in January -- is rippling through the country's manufacturing base. The country's weakened currency has provided some cushion to corporate profits, since it means that money earned abroad is worth more when converted to the Korean won.
An entrenched cultural force is also at the heart of the push to avoid layoffs at all costs. [Lucky them!] Like many Asian societies, South Korea's is more communal [-conservative] than individualistic [-suicidal]. The loss of a job can be deeply humiliating and also mean the loss of a kind of second home. All but the smallest employers offer benefits such as education and weekend getaways.
Shinchang Electrics, the auto-parts maker, provides meals, education subsidies, and sports and activity clubs for workers. While it idled production for a week in February, some workers showed up just to get out of their house and socialize.
[Say it! - it cut hours, just as the USA did for the first two thirds of its history, 1776-1940, from over 80 hours to 40, but then stupidly FROZE them!]
Shinchang's management began preparing for the downturn last September, when executives estimated that declining auto sales would push its 2009 revenue down about 23% to around $132 million. By December, the company identified a way to cut 10 billion won ($6.5 million) in costs, with about half that coming from cuts in pay.
Company Chairman Sohn Byung-whuy and Chief Executive Lee Chul-hwan each offered to take a 40% reduction in pay. Other executives followed with a 30% cut, and office and union workers agreed to 20%.
[Compare Lincoln Electric: everyone sacrifices together, starting at the top where they don't spend it anyway cuz they were already spending all they could before they got the last $10m.]
Sharing the Cuts
In the 1998 recession, Shinchang and its union agreed to a similar pay cut. A year later, as the country started to recover, the company boosted pay for workers above their pre-recession salaries by 20% for the next two years before returning to its normal wage agreement.
Nothing in the latest agreement specifies that Shinchang will boost wages above current levels after the economy recovers, but Park Jong-nam, the company's personnel manager, says it is likely. [Damn straight if they want more economic independence and control via a stronger domestic consumer base.] And Mr. Shim, who molds ignition components, says, "They didn't say they would reward this, but we trust them."
[When's the last time you heard that kind of statement in America?!]
In January, the Federation of Korean Trade Unions, the second-largest umbrella group of unions, and the Korean Employers Federation, a group representing midsize companies, proposed the building of a national consensus on layoffs and wage cuts. A series of meetings followed that produced the broad agreement last week.
"We find it's getting more serious than the [1997-98] period," said Kang Choong-ho, a spokesman for the Federation of Korean Trade Unions. "This time we thought we must keep jobs and yield what we can, sharing the pain."
[That's a heck of a lot smarter than American unions, who sold their birthright (wage maintenance via shorter hours) for a mess of pottage (higher pay and bennies - short term) - if you can only get one and it's higher pay, you wind up with neither cuz you're fighting market forces by slapping a higher price on a surplus commodity, labor, but if you can only get one and it's shorter hours, you wind up with both, cuz you're harnessing market forces to raise the price of a reducing surplus or actual shortage of...you, labor. But American unions got suckered and so now they're down to 13% of the workforce, mostly in the public sector, and all the rest of us are suffering for their stupidity and failure.]
But the endgame in South Korea may turn out to be more painful. [Funny how Americans hope beyond hope that everyone is as stupid as them!] At a news conference early last month, LG Electronics Co. CEO Nam Yong said he's watching the cost savings that the firm's Japanese rivals are achieving by cutting jobs, and he will try to match them. "There are no reasons to lay off staff for now," Mr. Nam said. Down the line, he added, "It's difficult to give a clear answer."
[Japan flushed itself down the toilet in 1989 when it traded lifetime employment for American-style downsizing. But, phew, Americans didn't have to write adoring management books about Japan any more - we'd convinced them, somehow, to talk growth and practice downsizing = ungrowth, just like us. And the more you downsize, the more you downsize.]
-- SungHa Park contributed to this article.
Write to Evan Ramstad at email@example.com
- BMW mulls shorter work hours beyond March - paper, Frankfurter Allgemeine Zeitung via Reuters - USA
FRANKFURT, March 3 (Reuters) - Germany's luxury carmaker BMW (BMWG.DE) may extend its cuts in working hours beyond March, according to a German newspaper.
BMW cut hours in February and March for 26,000 workers at German plants in Dingolfing, Regensburg, Landshut and Berlin.
"We are currently in talks with the works council to implement the short working hours programme even after March," BMW Chief Executive Norbert Reithofer was quoted as saying in an early release of Frankfurter Allgemeine Zeitung's Wednesday edition.
- US Auto Sales Continue Swoon; Toyota Down 40%, By Mike Barris, Dow Jones Newswires; 201-938-5658; firstname.lastname@example.org, DOW JONES NEWSWIRES via CNNMoney.com - USA
Toyota Motor Corp. (TM) and Ford Motor Co. (F) recorded their biggest U.S. sales declines of the current six-month plunge as woes intensified in February and further threaten the viability of multiple auto makers.
The news comes amid growing concern that the world's auto makers won't get the second-half sales bounce in the U.S. they had been banking on to slow their financial erosion. January sales hit a 27-year low, with February expected to be at similar levels. The year is widely expected to result in the fewest U.S. auto sales in decades.
Ford, which also gave initial expectations that second-quarter production in North America will be down 38%, reported light-vehicle sales slumped 48% to 99, 050, the second-straight month below 100,000. At Toyota, now the world's largest auto maker by sales, U.S. sales fell 40% to 109,583 from 182,169. Both results were roughly in line with expectations.
There were 24 selling days in February, one less than a year earlier. Toyota car sales dropped 36%, while sales of sport utility vehicles declined 37%. Pickup truck sales plunged 51%. Even Toyota's Corolla, usually a bright spot for the company, reported a 15% sales decline.
Toyota's slump comes as collapsing auto demand forces it, like its global rivals, to cut production. The company, once seen as immune to the forces that have rocked its Detroit-based rivals, has offered buyouts to North American workers and will cut the work week at some U.S. factories by 10%. It has also postponed the opening of a Mississippi assembly plant.
Excluding Volvo, Ford's car sales dropped 48% as SUVs tumbled 71%. Trucks and vans slumped 54% as sales of the F-series pickup fell 55%.
U.S. Ford, Lincoln and Mercury inventory dropped 32% in light of the production cuts that have already taken place.
Jeff Schuster, executive director of global forecasting at J.D. Power & Associates, expects February and March to be the year's low point. "But a high degree of uncertainty and risk remains for the second half of 2009 if the various factors that are currently impacting automotive sales do not improve or stabilize," Schuster said.
Meanwhile, Nissan Motor Co. (NSANY) posted a 37% sales decline in the U.S. last month. The other major auto makers will report February sales later Tuesday.
Ford shares recently were down 2.1% at $1.84. The stock has lost two-thirds of its value since mid-September. Toyota American depositary shares were off 13 cents at $60.53.
3/02/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Would YOU Work-Share?, (last update 8/31/2010) nojobsurvivor.com
DATELINE?? U.S.A. - It's an old idea that's gaining in popularity... at least in Japan. Now, some Japanese companies are introducing it in the USA. Common in parts of Europe, work-sharing means slashing employees' pay and hours instead of firing people outright.
[Slashing hours, yes; pay, no - pay is maintained from unemployment insurance funds which save money cuz employment is maintained.]
Two or three people might share what previously was one person's job. In Korea, companies that implement job sharing may even get a tax deduction.
Toyota plans to begin the work-sharing arrangements at its factories in Indiana and Texas in the United States. Toyota are offering work sharing as an alternative to "early retirement." US companies are doing it too. Latham International, a privately owned builder of swimming pools, has worked with NY state to implement a job sharing program. Seventeen states have active programs that permit the use of unemployment funds to support work sharing. Work sharing may be particularly beneficial for older workers, who often find it more difficult than younger workers to find a job after a layoff.
What do you think about the choice of no job or part of a job? Would it work for you? Maybe mandatory job sharing with benefits should have been a component of the stimulus package.
The AARP Public Policy Institute held a forum in December 2009 to look at what's needed to create successful work sharing initiatives; what we can learn from national best practices and international models; and policy considerations at the state and federal level for promoting work sharing. Follw this link to the AARP PPI and download a transcript of the forum and watch the webcast of the forum.
- 200 Clayton teachers get the ax, others get a raise, By MEGAN MATTEUCCI, Atlanta Journal-Constitution - GA, USA
[That'll kill the economy further faster - but there is some timesizing here later.]
Clayton County teachers will receive a 1 percent pay raise next year while about 200 of their colleagues will lose their jobs.
The school board voted 8-0 Monday night to trim $20.7 million from next year's budget through staff cuts. Board member Charlton Bivins abstained from the vote because his wife is a teacher.
The approved compensation plan, which includes salary reductions at the administration level, comes as the school system is facing a $23 million decrease in state aid next year.
"It hurts, but it's not as bad as it could be," board member Mary Baker said. "Anything that will save a teacher's job is worth it."
The plan includes:
- About 200 teachers and 100 staff members will be cut because there are 3,500 fewer students since the accreditation loss. Chief Financial Officer Roger Reese said he hopes the cuts will be made through attrition, but some new teachers may not have their contracts renewed.
- All remaining teachers, counselors, media specialists and social workers will receive a 1 percent pay raise, instead of a 3 percent increase.
- School nutrition, maintenance and transportation workers will receive no raise.
- Custodians will have their workweek reduced from 50 to 45 hours a week.
- Administrators, including principals, will have their work year cut from 240 to 230 days a year, which results in a 1.5 percent cut in pay.
- Assistant principals and coordinators will have their schedule trimmed from 240 to 220 days a year - a 1.5 percent pay cut.
- School improvement specialists will have their work year cut from 240 to 210 days a year - a 1.5 percent pay cut.
The board also voted 8-1 to freeze all administrative hires, including coordinator and higher.
Board member Pam Adamson said the plan initially included raises for the administrators. She said she supports the teacher raises, but insisted on the cuts in administrators' pay.
Board chairwoman Alieka Anderson said the pay raises were necessary to retain quality teachers.
[Ridiculous. Where are they going to go in a depression? It's morons like Alieka Anderson who shove the economy downward faster. The more jobcuts, the more jobcuts.]
She worries the district may not have enough money to rehire teachers if enrollment increases.
"My concern is we have houses empty all over the county," she said. "What if people move in with children? ... You can't have school without teachers."
Fayette County voted last week to cut employee salaries by 4.5 percent.
- Local Westfield Malls Change Business Hours, KGTV, 10News.com - San Diego,CA,USA
SAN DIEGO -- Monday was a typical day at the mall for shopper Kareen Campbell.
"Today, I'm just out shopping with my mom," said Campbell.
But Campbell and her mother started 30 minutes later than usual. In fact, every shopper got a late start as Westfield Plaza Bonita in National City is now opening at 10:30 a.m. instead of 10 a.m.
"It's to help our retailers conserve resources and it's also a response to changes in customer patterns," said Genevieve Christensen of Westfield Plaza Bonita.
On weekdays, Westfield's San Diego County malls will open at 10:30 a.m., with some closing 30 minutes earlier at 8:30 p.m. instead of 9 p.m.
Some would consider the change a life preserver for stores that might not be doing well these days. The shorter work day will save stores money on electrical bills and payroll.
Campbell said she doesn't mind the change, and added, "And I think if we can help keep the local businesses open then I'm all for it."
The shoppers will not be the only ones affected by the change. The shorter workday means store employees will also lose money on their paychecks.
"Even my employer has cut down on their labor, so I don't make as much as I have been making," said shopper Valentino Reynosa.
10News talked to several mall employees, and they said the new hours would hurt their wallets.
Some people who go to the malls before or after work don't like the new hours either.
"I expect to be here at 10 a.m. if I was going to do something, shop early," said shopper Diane Acosta.
All Westfield malls in San Diego County are opening 30 minutes later, but not all of them are closing 30 minutes earlier.
3/01/2009 bits and pieces of the timesizing solution in the news, reinvented thousands of times every day in every recession by mainly mid- and small-size companies, organizations and governments despite being *dismissed out-of-hand by many economists and business schools - with excerpting and [commenting] by Phil Hyde (PH) unless otherwise initialed -
- Is It Time For A Four Day Working Week?, by Big Gav, The Oil Drum:Australia/New Zealand, anz.theoildrum.com - USA
The Sydney Morning Herald recently had an editorial calling for consideration of a 4 day working week as a response to economic contraction and alternative to making employees redundant.
The idea of a 4 day working week isn't an entirely abstract one for me, as my current employer has been significantly cutting back on staff levels over the past 6 months. The manager of my team took the approach of offering us all reduced work hours rather than having to let anyone go, which we've all accepted, so I'm now seeing what a 4 day week is like (and having just come back from a 4 day weekend hiking in the Snowy Mountains I can't say I have any complaints so far).
In this post I'll look at various proposals to reduce the amount of time we spend at work, as a way of addressing energy, environmental and other issues facing us....
DECIMATE. This word used to have a highly specific meaning: the killing of every 10th person, chosen by lot, as punishment by the Roman army for mutinous legions. The same concept comes to mind in the present economic contraction, as one in every 10 people employed by the private sector could lose their jobs as companies cut costs to survive in a credit freeze.
Private enterprises are the lifeblood of the Australian economy but are also the least insulated from the rolling shocks of the highest single-year decline ever recorded on the Australian sharemarket, and the sharpest downturn in Australian wealth ever recorded. The number of job ads is in free-fall. Anecdotal evidence is pouring in that job ads are generally being swamped by job applicants.
Each day brings new bad tidings on the employment front. Yesterday it was the International Monetary Fund announcing it may cut its growth forecast for Australia to zero for 2009. Mighty Microsoft announced it would cut 5000 jobs worldwide, although the cuts would not extend to Australia. The day before, the nation's largest private employer, Wesfarmers, which has a mostly casual workforce of 200,000, announced it expected to cut the hours worked by staff. BHP announced more than 3000 job cuts in Australia. David Jones said it would decimate its administrative staff, that is, cut one in 10 back-office jobs.
The spectre of unemployment is casting the longest and darkest shadow over the economy and consumer sentiment. To survive this downturn in confidence and investment, private companies, which do not have the luxury of being supported by the taxpayer, are having to cut costs.
So how to ease the pain and share the burden? In order to minimise the trauma of involuntary redundancies, we believe inadequate consideration is being given to the non-voluntary four-day week as an alternative to redundancy. This may be administratively difficult. We are under no illusions about the workplace legislation imposed on employers by federal and state governments, which is ridiculously complex and burdensome. This idea may also be opposed by unions paranoid about a Trojan horse of lower pay and more onerous conditions. But surely a four-day week, either voluntary or imposed, is preferable to involuntary redundancies.
Australia isn't the only country considering reducing standard working hours - The Independent recently had an article titled "Britain is facing return of three-day week", quoting government sources as saying "Shorter hours would be preferable to mass unemployment". Car manufacturer Jaguar is currently considering a 4 day week to reduce costs.
Japan is also adopting the approach of reducing employee working hours in preference to firing people as they deal with their slump in exports and consumption, with the practice known locally as "work-sharing".
While the usual reason for adopting a shorter work week is economic, there is also an argument that working less hours reduces consumption and waste and can thus be justified on environmental and health grounds....
- Fine arts are in survival mode as funds dry up, By Andrea Stone, USA Today - USA
BALTIMORE - Doreen Bolger sees her new exhibit of circus drawings by Pablo Picasso and other 20th-century artists as just right for the times.
The images of acrobats and clowns, says the director of the Baltimore Museum of Art, are "uplifting and fun" at a time when the economy is in free fall.
Not so great is the $8 fee Bolger was forced to charge when the exhibit opened last week in the otherwise free museum. The museum has charged for a few special exhibits, but she had hoped this one could be free. Steep drops in the museum's endowment, contributions, government grants and gift shop sales, however, have made budget-balancing a high-wire act.
"There's rarely extra money in good times," says Bolger, whose museum opened in 1929, the year the Great Depression began. "We're already into the adversity mode."
The downturn walloping the entire economy has hit non-profit arts organizations especially hard. With millions of people scrambling to pay for food and other basics, a night at the opera can seem frivolous. So museums, symphonies, theaters, ballet companies and opera companies have cut staff, canceled performances, shortened seasons and, in some cases, shut down.
The worst may be yet to come.
Jesse Rosen of the League of American Orchestras says season subscriptions to performances, which are sold a year ahead of time, mask the full impact. "It's the second year when it catches up," he says.
That worries Jane Shannahan, a subscriber to the Alabama Shakespeare Festival in Montgomery. The festival recently canceled a $1.3 million production of Les Misérables because of declining contributions.
"It's important to support museums, symphonies, the dance and theater," she says. "These are things we need in society. If we lose them, we are declining faster than we think."
A USA TODAY/Gallup Poll in December found that 69% of Americans are cutting back on entertainment. Such sentiments have forced arts organizations to plan survival scenarios.
In New York, where more than a dozen Broadway shows closed in January, Carnegie Hall pared its schedule by 10%. The Miami City Ballet cut eight of 53 dancers. The Cincinnati Symphony Orchestra cut musicians' pay 11%.
The Philadelphia Museum of Art this week said it would eliminate 30 positions, postpone a Spanish art exhibit and possibly increase admission fees to deal with a 26% drop in its endowment. In Washington, the Smithsonian Institution has frozen all hiring. Brandeis University sparked an uproar when it announced it would close the Rose Art Museum outside Boston and sell works by Andy Warhol, Jasper Johns and others to fill potential budget gaps.
When soaring gas prices, plummeting tourism and a big drop in contributions threw it into financial crisis, the Kentucky Repertory Theatre in Horse Cave enlisted actor and native Kentuckian George Clooney to help raise $350,000.
The Utah Shakespearean Festival in Cedar City dealt with dwindling donations by shortening its summer season and putting on plays with smaller, less-expensive casts in its fall season.
In California, the Palm Springs Art Museum has resorted to layoffs, shorter hours and a hiring freeze as it waits for checks from supporters whose investments have shrunk. Says marketing director Bob Bogard: "The pledges just haven't come through yet."
As foundation grants and private donations dry up, arts groups become more creative. When the real estate bust and high unemployment sent ticket sales south and once-generous donors stopped returning phone calls, Florida Repertory Theatre in Fort Myers improvised with a limited-time deal of five plays for $99, nearly half the regular price. That "put hundreds of new people into the theater," artistic director Bob Cacioppo says.
In January, the Baltimore Chamber Orchestra e-mailed an urgent plea just before canceling the season's final two concerts.
"Our future is not certain. BCO's fate is in the hands of our loyal audience and donors," it said. "There are no bailouts for non-profit organizations."
[There should be no bailouts for any organizations or companies.]
"It's frightening," says Lockwood Hoehl, BCO's executive director. "We're unfortunately at the bottom of the food chain. The general thought about the arts in our society is it's expendable."
The philosophical divide between those who see the arts as frivolous and those who see its value is as old as the nation.
[ Makework -]
During the Great Depression of the 1930s, the federal Works Progress Administration paid thousands of unemployed artists to write regional guidebooks, produce plays and organize symphony orchestras. The work of more than 5,000 artists can still be seen today in murals commissioned for schools, post offices and other government buildings.
President Obama has not proposed such a program but supports increased arts funding. Most Republicans oppose spending tax dollars on aesthetics.
"America is a practical nation that comes from very practical roots," says Robert Lynch of the advocacy group Americans for the Arts. "That practicality ... is part of what we've had to overcome."
[How laudable! Overcoming a nation's practicality!]
It was on display in the recent debate in Congress over the economic stimulus package.
The House of Representatives version included $50 million for the National Endowment for the Arts to help non-profit arts organizations avoid closing or laying off workers, but the Senate version left it out. The final bill restored the money for the NEA.
"Putting people to work is more important than putting more art on the wall of some New York City gallery frequented by the elite art community," said Republican Rep. Jack Kingston of Georgia during the debate.
Lynch calls that attitude "uninformed and perhaps disingenuous." His group estimates that non-profit arts organizations generate $166.2 billion each year in cultural and related spending such as restaurants and parking, and they produce $30 billion in tax revenue and 5.7 million jobs.
"Those jobs are every bit as important as an auto industry worker," Lynch says. He says 10,000 arts groups employing 260,000 artists and support workers could close this year.
Brian Riedl, a federal budget analyst at the Heritage Foundation, a conservative think tank, sees it differently.
"When families are struggling to make ends meet, $50 million going to the arts means $50 million less to help families put food on the table," Riedl says.
Josh Bivens of the liberal Economic Policy Institute calls that "a false choice" and says any spending is good spending in an ailing economy. Plus, "it's something we should support as a society."
[Priorities, priorities, priorities - what planet is Bivens living on - Biven's ideas are a 'blivet' = ten pounds of poop in a five pound bag. Such arrogance is akin to big bankers blowing billions on bonuses and millions on entertaining 'clients' while the jobless starve.]
Artists have heard it all before.
"We in the arts have always had to fight to get the message of our value across," says Debbie Chinn, managing director of Centerstage, a regional theater here. "The arts isn't fluff. It's not discretionary. It's a very important piece of our lives."
[Nonsense - there is only one difference between art and art therapy = does it sell? And dragging government into subsidizing some tiny group's tastes is the height of oppressive, forced charity. Democrats and liberals lose a lot of support by not thinking this through.]
'Nobody to turn to'
As in other cities, the economic downturn has not hit all parts of Baltimore's arts scene with equal force. More-established, better-endowed groups such as Centerstage, the Baltimore Symphony Orchestra and the Walters Art Museum have cut back but are financially sound. Smaller organizations with less-secure financial underpinnings, such as the Baltimore Opera, the Baltimore Theatre Project and the chamber orchestra, may not survive.
With few huge corporations in the community, Baltimore arts groups have relied on local companies such as money manager Legg Mason, Constellation Energy and Whiting Turner construction for support. All are reeling.
Randi Vega, head of cultural affairs at Baltimore's arts council, says next summer's Artscape festival will be scaled back. Sponsors have cut funding and at least one, General Motors' Saturn, is expected to pull out.
Public money also is drying up as states struggle with yawning budget deficits. In Maryland, lawmakers have threatened to cut arts funding by 36%. "There's nobody to turn to," Vega says. "There isn't going to be a white knight to pick up the slack."
[How did lawmakers ever get into arts funding = or ANY private sector funding? Job desperation from fostering a labor surplus with a frozen 1940 workweek and a constant infusion of worksaving technology?!?]
There wasn't for the Baltimore Opera. In December, owing $1.2 million to creditors, it filed for Chapter 11 bankruptcy protection and canceled two performances, the first time since 1950 it cut its season short.
Opera may face the most perilous times. Companies often must charge ticket prices of several hundred dollars to cover the cost of large orchestras and elaborate sets and costumes.
Next to past recessions, "this is more widespread and came up quicker," Baltimore Opera general manager M. Kevin Wixted says. "You can continue to try to bump along, but it didn't work."
Wixted hopes to be back by the fall season but says, "All operas are basically on the edge."
The Washington National Opera has put off Wagner's four-part Ring cycle. The Los Angeles Opera laid off 17% of its staff. A few companies have closed, including Opera Pacific in Santa Ana, Calif., and Hartford's 67-year-old Connecticut Opera.
Marc Scorca of the advocacy group Opera America hopes fans elsewhere will keep coming.
"The opera audience is unusually passionate," he says. "We hope that passion places opera at the very bottom of the list of things that will be cut."
The Baltimore Symphony Orchestra has seen ticket sales sag and its endowment plunge, but the full season will go on - with a tweak. Instead of performing Mahler's Sixth Symphony - which would have required 10 extra brass musicians at a cost of $20,000 - the orchestra will play Mahler's Ninth.
At Centerstage, where the endowment has shrunk by 35% and fewer people are buying full-season subscriptions, Chinn is struggling to keep the curtain up. She and five others worked without pay in February.
A recent production of the musical Caroline,or Change was staged without understudies to save money.
A few blocks away, at the Walters Art Museum, director Gary Vikan is taking a one-month unpaid furlough after a 27% drop in endowment funds forced him to lay off seven of 150 employees, freeze salaries and hiring and cancel an exhibit on French painter Jean-Léon Gérôme.
Vikan and the Baltimore Museum of Art's Bolger are determined to preserve free admission, which began three years ago with a local government grant that runs out in October. Since 2006, they say, the number of minorities, children and first-time visitors has soared.
Vega, of the arts council, isn't surprised: "In times like these, people are looking for ways to reduce their stress, and the arts are certainly a way to do that."
Contributing: Judith Egerton of (Louisville) Courier-Journal; Stefanie Frith of The (Palm Springs, Calif.) Desert Sun; Brian Passey of The (St. George, Utah) Spectrum; Laura Ruane of The (Fort Myers, Fla.) News-Press; Marty Roney of Montgomery (Ala.) Advertiser; the Associated Press.
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