[OPE] Lucy Kellaway and the economy of the lambs...

From: Jurriaan Bendien <adsl675281@telfort.nl>
Date: Mon Jun 22 2009 - 14:11:53 EDT

(...) Last week, British Airways came up with its own would-you-rather
dilemma. It asked its employees if they would rather work for a month on
full pay, work for a month on no pay at all, or take a month off on no pay.
The BA offer seems to make no sense at all. Working for money makes sense.
Not working for no money also makes sense. But working for no money seems to
make no sense at all.Yet in the past few months the old relationships
between work and leisure, and money and no money have started to break down.
BA is leading the field in begging workers to volunteer to work for zilch,
while other employers are begging their workers to stay at home and loaf
about and is paying them pocket money for the privilege. In January, KPMG
offered its staff three-month sabbaticals on 30 per cent of salary, and the
Spanish bank BBVA is offering to pay its staff a similar amount for up to
five years if they promise not to come to work.

To understand what is going on, one needs to forget all the economics one
ever learnt. (Actually I've forgotten this already - as I wrote last week -
and so last week I had to relearn it in order to forget it all over again.)
Microeconomics tells you that each person has a labour supply curve and, at
no wage, no labour is supplied. As the wage rises, the worker supplies more
labour. Macroeconomics assumes that wages are inflexible downwards. If you
want wages to fall, then the only way that will happen is by making
inflation go up.

But what has been happening in the past few months shows that neither is
true. The recession is proving that our preferences for leisure versus money
can't be traced on simple graphs. It is also showing that wages are not
inflexible downwards. Companies are putting forward novel ways of making
wages fall, and workers are mostly taking it like lambs - more than a
quarter of UK workers have already swallowed what is in effect a pay cut.

The new reality has two good side-effects. The first is that it may be
weaning us off our workaholic ways. In most companies, the traditional way
to win favour was to be seen to be slogging your guts out. Now companies are
so desperate to save on the wage bill that they are instructing senior
people to set a good example and stay at home. The new message: to advance,
stop working.

In some companies, the workforce is responding enthusiastically. In others,
it is more suspicious. Some organisations are having trouble in getting
their workaholics to comply because they fear that signing up for such a
scheme would be the equivalent of sticking a large sign around their necks
that said: "I'm dispensable. Please fire me."

To get round this, some companies are having to bully their senior people
into volunteering to take sabbaticals by sending memos instructing them to
lead from the front and stay away - or else. The penny may drop, eventually.
The other good effect is a Blitz spirit. At the moment, most people are
prepared to take pay cuts - or work for nothing for a bit - out of fear that
if they don't, they will lose their jobs. Indeed a recent survey by pressure
group Keep Britain Working said that 95 per cent of workers would be
prepared to change working arrangements if they thought it would protect
them from the dole queues.

I will not cease from mental fight
Nor shall my sword sleep in my hand
'Til we have built Jerusalem
In England's green and pleasant land
'Til we have built Jerusalem
In England's green and pleasant land

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Received on Mon Jun 22 14:19:22 2009

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