The law of incentives and unintended consequences
Why is it important to understand the implications of Union sponsored "worker protection" laws? The experience in Norway offers some answers:
On an average day, about 25 percent of Norway's workers are absent from work, either because they have called in sick, are undergoing rehabilitation or are on long-term disability. The rate is especially high among government employees, who account for half the work force.So what do the Unions say? They claim that globalization has resulted in a "brutalization of the work force":
The average amount of time people were absent from work in Norway in 2002, not including vacations, was 4.8 weeks. Sweden, its closest competitor, totaled 4.2 weeks, while Italy came in at 1.8 weeks and Portugal at 1.5 weeks, according to the Organization for Economic Cooperation and Development.
Throw in vacation time (five weeks for most people), national paid holidays (11 per year) and weekends, and Norwegians take off nearly half the calendar year, about 170 days, a figure that does not include time off for disability and rehabilitation, according to Bergens Tidende, the newspaper that made the calculations. Long-term disability leave, up 20 percent since 1990, is growing at an even faster rate than sick leave.
There are few penalties for chronic absenteeism. Most people who take sick leave receive 100 percent of their pay for a year, though the level dips to 60 percent in the second year under a job rehabilitation program. Few employees get fired, but, if they do, unemployment benefits are generous.
International companies, some of them American, have bought or merged with Norwegian businesses in the last decade, which has exposed workers to job insecurity for the first time. The unions contend that that has made workers reluctant to take sick leave when they should. Instead, they stay on the job and hurt themselves more seriously, which forces them into long-term disability.Restrain your laughter. All of the above from an article in the NYT.
posted by david burnstein at 11:20 AM
1 Comments:
give me a strong market for entrepreneurial activity. that is what adds the most value, not labor per se. Labor is simply an input. Labor unions don't drive innovation, entrepreneurs do. Free markets facilitate innovation, unionized markets do not. Unionized markets are ironically a stale, conservative concept; they stand for protecting incumbents (in this case existing employees, at the expense of prospective employees) and protecting special interests (at the expense of the broader, less organized interests of consumers).
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