Wednesday, December 31, 2008
I recently took a 10% pay cut. Maybe I should have tried to postpone it until 2011, UAW style! But I've always thought variable pay--rising and falling with the economy--was a good idea, since it enables firms to avoid layoffs in down times. And I'm a terrible negotiator. I didn't think I had much leverage. It was all over in about 40 seconds. Faster than the Wagner Act!
According to the NYT , lots of employers are taking this wage-cuts-not-layoffs approach. In theory this should help the economy recover faster, no? I'm influenced in this view by Martin Weitzman's Share Economy , which notes that one of the flaws in classical economic theory that prompted Keynes' corrective was the stickiness of wages . In theory, they're supposed to fall in a recession until it pays employers to hire people. In practice, they don't. But now, they do. At least a bit more than before.
Taking a wage cut isn't the form of "variable pay" that Weitzman advocates--if I remember right, he wants workers paid a "share" of the firm's profits or revenues, structured so that every time a new worker gets hired (and takes a share) it effectively lowers the pay for existing workers (whose share is now split among more people). That creates an incentive for firms to constantly go out and hire in bad times and good--an incentive that doesn't exist in my case. (My pay's gone down, but it won't go down more just because Slate hires someone new--unless of course they hire them to, you know, replace me ). Still, if wages are less sticky downwards, it should help, no? ...
I attempt to hurriedly make this point in the gala "New Year's Bloggin' Eve" edition of bhTV . ... 6:28 P.M.
How come you almost never see Saturn Astras on the road here in Southern California? They're still selling them , aren't they? How bad could they be? ... All of GM's efforts should be as successful as its campaign to kill Saturn . ... 6:10 P.M.
As 2008 ends, the search for Matt Yglesias' manhood is focused on a remote, wooded area near Oxon Hill, Maryland. ... 5:22 P.M.