W.E.F Global Competitivness Report

[Deleted]

Your society is not going to have a better life if companies can't fire people whose work is helping no one, only making it worse. Because that's what unprofitable employees essentially are.

That's true, but when all those unprofitable employees are fired (unprofitable or because it's better for them to hire someone who is unemployed and really need the job at all cost and pay them much less ?) and we have tons of CEOs in the Forbes top 100, we are all good ?

[BLCalliente]

A flexible labourmarket has always been superior in my opinion, but with better communications and global connectivity (travel) the old model has really become increasingly outdated.

A "flexible labor market" is just another term for more temps, less benefits, less job security.

I don't see how that is "progress" and that the opposite is "outdated".

---------- Post added 2012-01-31 at 03:28 PM ----------

Your society is not going to have a better life if companies can't fire people whose work is helping no one, only making it worse. Because that's what unprofitable employees essentially are.

Firing unprofitable employees is one thing.

Outsourcing entire operations to other countries, or firing people and replacing them with temps, is another altogether.

Whose quality of life goes up when that happens? It certainly isn't the people doing the work (the majority of the workforce). It's an extremely small minority who already have a great quality of life.

[Reeve]

US higher education used to be #1.



China is the largest manufacturer in the world, as of March last year. http://www.ft.com/cms/s/0/002fd8f0-4...#axzz1l4bdNjeC

The federal budget sucks due to war. War on terror. War on drugs. War on some other intangible.

The Financial Times article is wrong: http://shopfloor.org/2011/03/u-s-man...-largest/18756

[Deleted]

A "flexible labor market" is just another term for more temps, less benefits, less job security.
I don't see how that is "progress" and that the opposite is "outdated".

No, it's not about temps. Yes, it's about lower job security. Lower job security also equals employers that are willing to take bigger risks in hiring people. The end result is a fluid jobs market where labour is designated to it's most efficient use.

Being employed as efficiently as possible also ensures higher value of the labour, which means higher wages.

Firing unprofitable employees is one thing.

Outsourcing entire operations to other countries, or firing people and replacing them with temps, is another altogether.

Whose quality of life goes up when that happens? It certainly isn't the people doing the work (the majority of the workforce). It's an extremely small minority who already have a great quality of life.

Why do you think they hire temps in the first place? Because it's too risky and too complicated to hire proper employees. If firing them wouldn't be such a hassle, they'd hire more of them. In most places in the US firing is not a big hassle, which is good.

Outsourcing is just the same as moving factories from expensive areas in the US to cheaper areas, but on a global scale. It is the distribution of labour across the globe. Outsourcing is a symptom, not a disease. When companies outsource, it's almost always the right thing to do from the perspective of society. What you need to study are the reasons for the outsourcing. Sometimes they are positive, sometimes negative.

For example, it's totally insane to expect there to be sweatshops that utilize manual labour to make certain parts of sneakers. These are tasks that fit the skills of the labourforce of developing nations much better. In this case, outsourcing is happening for good and positive reasons.

On the otherhand, when Fisker Karma moves its U.S. government subsidised electric car production to Finland, you know something is wrong. The outsourcing in itself is good, because the conditions and expertise for the production are better in Finland. The reasons why the conditions are what they are, are on the other hand not anything to cheer over.

[Wells]

Being employed as efficiently as possible also ensures higher value of the labour, which means higher wages.

Ummm excessively high labor fluidity suppresses wages because its easy to find a replacement.

Let's not even bother getting into the downsides of low job security.

[BLCalliente]

No, it's not about temps. Yes, it's about lower job security. Lower job security also equals employers that are willing to take bigger risks in hiring people. The end result is a fluid jobs market where labour is designated to it's most efficient use.

Being employed as efficiently as possible also ensures higher value of the labour, which means higher wages.

You're just talking nonsense. This whole idea of businesses "taking risks" by hiring people and THAT increasing wages somehow is the exact opposite of what happens. Lower job security, higher turnover, large labor pool. These things all lower wages. This doesn't even require a citation.

Why do you think they hire temps in the first place? Because it's too risky and too complicated to hire proper employees. If firing them wouldn't be such a hassle, they'd hire more of them. In most places in the US firing is not a big hassle, which is good.

I think they hire temps because they can pay $15 an hour and no benefits. $5 of which goes to the agency. So they end up hiring a person who is desperate for a job, is now underemployed making $10/hr, and the person who had the full time job before now has nothing. Net gain for the company is whatever the difference in wages is, plus benefits. Net gain for the people is one person is unemployed and another is now underemployed.

Outsourcing is just the same as moving factories from expensive areas in the US to cheaper areas, but on a global scale. It is the distribution of labour across the globe. Outsourcing is a symptom, not a disease. When companies outsource, it's almost always the right thing to do from the perspective of society. What you need to study are the reasons for the outsourcing. Sometimes they are positive, sometimes negative.

For example, it's totally insane to expect there to be sweatshops that utilize manual labour to make certain parts of sneakers. These are tasks that fit the skills of the labourforce of developing nations much better. In this case, outsourcing is happening for good and positive reasons.

On the otherhand, when Fisker Karma moves its U.S. government subsidised electric car production to Finland, you know something is wrong. The outsourcing in itself is good, because the conditions and expertise for the production are better in Finland. The reasons why the conditions are what they are, are on the other hand not anything to cheer over.

I won't even touch this one. There is nothing positive about outsourcing. Jobs leaving the country so that corporate profits can increase? Yeah, really good right?

[Reeve]

You're just talking nonsense. This whole idea of businesses "taking risks" by hiring people and THAT increasing wages somehow is the exact opposite of what happens. Lower job security, higher turnover, large labor pool. These things all lower wages. This doesn't even require a citation.

OK, I don't understand his argument there either.

I think they hire temps because they can pay $15 an hour and no benefits. $5 of which goes to the agency. So they end up hiring a person who is desperate for a job, is now underemployed making $10/hr, and the person who had the full time job before now has nothing. Net gain for the company is whatever the difference in wages is, plus benefits. Net gain for the people is one person is unemployed and another is now underemployed.

No, it's pretty common to hire temps because there's a lot of risk involved in hiring a new person when they aren't easy to get rid of. It's also fairly common once a temp has proven themselves that they get hired on full time, because there's less risk involved. Having an inflexible workforce tends to increase the frequency of companies using temps because they're worried about the consequences of hiring someone who doesn't work out and is hard to get rid of.

I won't even touch this one. There is nothing positive about outsourcing. Jobs leaving the country so that corporate profits can increase? Yeah, really good right?

From a nationalist perspective, possibly not. From an economics perspective it's quite good, because it's matching the right people to the task. It's very bad from an economics point of view for people to get paid an artificially high wage because a company wants to stick around for the good of the country they're working in. It's better for the world economy as a whole to have a high degree of flexibility.

[BLCalliente]

No, it's pretty common to hire temps because there's a lot of risk involved in hiring a new person when they aren't easy to get rid of. It's also fairly common once a temp has proven themselves that they get hired on full time, because there's less risk involved. Having an inflexible workforce tends to increase the frequency of companies using temps because they're worried about the consequences of hiring someone who doesn't work out and is hard to get rid of.

I'm speaking from a purely American viewpoint. I don't know how hard it is to fire somebody in the rest of the world, but I know it's very easy in the US. "At will employment" is a bitch.

Temp workers, contract employees, and other "flexible workforce" groups are mostly used to lower costs by not having to pay benefits. I know this because I've worked in HR for two fortune 100 companies in the US, and those are the reasons given in private. Publicly I'm sure they spout the same propaganda about risk, flexibility, etc. but those are just ancillary to the real reason.

From a nationalist perspective, possibly not. From an economics perspective it's quite good, because it's matching the right people to the task. It's very bad from an economics point of view for people to get paid an artificially high wage because a company wants to stick around for the good of the country they're working in. It's better for the world economy as a whole to have a high degree of flexibility.

No company is manufacturing in 25 cent/hour labor markets because they are doing their part to better the world economy. They are doing it because they want to increase profit, and are willing to do so at the expense of their current employees.

---------- Post added 2012-02-01 at 11:04 AM ----------

No, it's pretty common to hire temps because there's a lot of risk involved in hiring a new person when they aren't easy to get rid of. It's also fairly common once a temp has proven themselves that they get hired on full time, because there's less risk involved. Having an inflexible workforce tends to increase the frequency of companies using temps because they're worried about the consequences of hiring someone who doesn't work out and is hard to get rid of.

I'm speaking from a purely American viewpoint. I don't know how hard it is to fire somebody in the rest of the world, but I know it's very easy in the US. "At will employment" is a bitch.

Temp workers, contract employees, and other "flexible workforce" groups are mostly used to lower costs by not having to pay benefits. I know this because I've worked in HR for two fortune 100 companies in the US, and those are the reasons given in private. Publicly I'm sure they spout the same propaganda about risk, flexibility, etc. but those are just ancillary to the real reason.

From a nationalist perspective, possibly not. From an economics perspective it's quite good, because it's matching the right people to the task. It's very bad from an economics point of view for people to get paid an artificially high wage because a company wants to stick around for the good of the country they're working in. It's better for the world economy as a whole to have a high degree of flexibility.

What other perspective than the nationalist one is relevant when discussing a global competitiveness report?

No company is manufacturing in 25 cent/hour labor markets because they are doing their part to better the world economy. They are doing it because they want to increase profit, and are willing to do so at the expense of their current employees.

[Reeve]

I'm speaking from a purely American viewpoint. I don't know how hard it is to fire somebody in the rest of the world, but I know it's very easy in the US. "At will employment" is a bitch.

Temp workers, contract employees, and other "flexible workforce" groups are mostly used to lower costs by not having to pay benefits. I know this because I've worked in HR for two fortune 100 companies in the US, and those are the reasons given in private. Publicly I'm sure they spout the same propaganda about risk, flexibility, etc. but those are just ancillary to the real reason.

I am American, by the way. I have worked in countries where the labor laws were very restrictive and made it very hard to lay people off. This made me and others in my company hire fewer people than we otherwise would have because we didn't want to be stuck with workers we couldn't use down the line.

No company is manufacturing in 25 cent/hour labor markets because they are doing their part to better the world economy. They are doing it because they want to increase profit, and are willing to do so at the expense of their current employees.

Whatever their motives are is irrelevant to the argument. From an world economic perspective, it's good for the world economy to outsource when it makes sense to do so.

[BLCalliente]

I am American, by the way. I have worked in countries where the labor laws were very restrictive and made it very hard to lay people off. This made me and others in my company hire fewer people than we otherwise would have because we didn't want to be stuck with workers we couldn't use down the line.

Whatever their motives are is irrelevant to the argument. From an world economic perspective, it's good for the world economy to outsource when it makes sense to do so.

The motives are totally relevant. The world economic perspective is what is irrelevant when you're talking about global competitiveness, like we are.

[Reeve]

The motives are totally relevant. The world economic perspective is what is irrelevant when you're talking about global competitiveness, like we are.

OK, if we're talking about global competitiveness, then having a flexible labor market attracts employers to the nation because they aren't heavily restricted in how to deal with their employees. It discourages offshoring, because companies are less likely to go overseas to find a country where the labor laws are less restrictive.

[Deleted]

You're just talking nonsense. This whole idea of businesses "taking risks" by hiring people and THAT increasing wages somehow is the exact opposite of what happens. Lower job security, higher turnover, large labor pool. These things all lower wages. This doesn't even require a citation.

Easier to fire workers means employers are more likely to hire workers as well. Why? Because they don't risk getting stuck with an employee they don't need. The increase in supply of labour is evened out by the increase in demand. All it does is create higher fluidness.

Job market fluidness means that people are put to work where their efforts create the best results. If your current labour is generating losses, then you need to stop wasting your time doing it. If your are creating value for society, but you could create significantly more at another task, then it's good that you get fired and re-hired by another employer.

Denmark is a shining example of how this works. Firing a person extremely easy there, which results in low unemployment, to counter lower job security they have certain safeguards for unemployed workers. It's called The Danish Model.

I think they hire temps because they can pay $15 an hour and no benefits. $5 of which goes to the agency. So they end up hiring a person who is desperate for a job, is now underemployed making $10/hr, and the person who had the full time job before now has nothing. Net gain for the company is whatever the difference in wages is, plus benefits. Net gain for the people is one person is unemployed and another is now underemployed.

Temp employees are less effective and using them in the long run is more expensive than hiring a proper employee. The exception is when they have excessive regulations on how you must treat a permanent employer, which do not apply to temps. But that's government failure.

I won't even touch this one. There is nothing positive about outsourcing. Jobs leaving the country so that corporate profits can increase? Yeah, really good right?

Ofcourse outsourcing is good. For example, what's the point for a Nordic country to try and farm Oranges in greenhouses when they can just let Tropic nations do it and import from them? That's a good example of beneficial outsourcing.

Outsourcing leads to the most efficient use of resources on a global perspective - the least waste. What this ultimately means for the individual nation, is that the price of everything does down. Or in other words, it means there are more resources and products available than if everyone had produced it in their own nation.

[Wells]

Easier to fire workers means employers are more likely to hire workers as well.

Or they can use the ease of firing to force more and more out of existing employees. People in right to work states make less money.

? Because they don't risk getting stuck with an employee they don't need.

The myth of unfireable employees is largely just a myth.

Outsourcing leads to the most efficient use of resources on a global perspective - the least waste.

This only matters if you're bothering to think on a global scale. Some of us like our country to do well though.

[Reeve]

The myth of unfireable employees is largely just a myth.

I have been in a situation where we fired workers from our projects and got slapped with a court order to pay out that employee's salary for 6 more months when I was working in Mozambique. You can understand why that made us reluctant to hire too many workers there, and why it would tend to make many companies leary of entering that labor market.

[Deleted]

Or they can use the ease of firing to force more and more out of existing employees. People in right to work states make less money.

Right to work states also have lower unemployment. Right to Work legislation however is not the only determining factor of wage levels or unemployment. Thus your and my claims are simply correlation =/= causation.

The myth of unfireable employees is largely just a myth.

No one is speaking of "unfireable". I'm speaking of how hard or easy it is.

This only matters if you're bothering to think on a global scale. Some of us like our country to do well though.

Surely your city/town is better off by outsourcing some stuff you do to other cities/towns? Surely your state is better off by outsourcing certain things to other states? Surely your nation is better off by outsourcing some activities to other nations?

[Wells]

I have been in a situation where we fired workers from our projects and got slapped with a court order to pay out that employee's salary for 6 more months when I was working in Mozambique. You can understand why that made us reluctant to hire too many workers there, and why it would tend to make many companies leary of entering that labor market.

Mozambique. Ok.

Right to work states also have lower unemployment.

When we did the math, we found that the unemployment rate in the 22 right-to-work states was 9.17 percent, compared to 9.65 in the 28 non-right-to-work states. (The national unemployment rate that month was 9.4 percent that month -- right in the middle.)

.5% Wooooooo You're claiming that the ability to fire employees easily drives up wages but that's simply not true.

Surely your city/town is better off by outsourcing some stuff you do to other cities/towns? Surely your state is better off by outsourcing certain things to other states? Surely your nation is better off by outsourcing some activities to other nations?

Sometimes.

[Reeve]

Mozambique. Ok.

Mozambique is an example. The point is, and is recognized by this report, the more difficult it is to get rid of an employee, the less competitive a country is economically. It tends to be one of many factors that makes a country less desirable to start business in.

[Deleted]

.5% Wooooooo You're claiming that the ability to fire employees easily drives up wages but that's simply not true.

Labour market flexibility ensures that labour is allocated in the areas where it is most needed.

This means that the total economic output is greater than if labour was not allocated where it was most needed. This means that everyone is better off.

It's also important for economic recovery during downturns.

[Wells]

What about right to work states pay less and enjoy no serious decrease in unemployment is complicated?

[Deleted]

What about right to work states pay less and enjoy no serious decrease in unemployment is complicated?

Because correlation =/= Causation, both for the better employment status and for the lower wages. There are other factors that affect their wages, especially as most right to work states are in certain regions instead of randomly spread out across the country.

There's no need act rude.