Robert Shiller, an economics professor at Yale, wrote an insightful opinion piece in last Sunday’s NYT, to the notice of no one as far as I can tell. (Insightful in the “That’s so obvious, why hasn’t anyone said that out loud before?” way.)
Here’s the translation: Instead of laying off tons of workers while holding on to the all-star crew during a recession, bosses should simply make everybody (including themselves) share the pain with across the board pay cuts. (Obviously, if there’s a worker who sucks, they should be fired—but that’s not a function of the recession; bad workers should be fired for being bad workers whenever it’s merited. Downturns are too often used as cover for firing bad workers who should have been replaced years ago.)
This strategy, the piece argues, will fend off the mass unemployment figures that feed into the recession, while also staving off a sort of ripple effect within companies that kills morale. Conversely, sharing the pain of company downturns (again, boss included) creates a sense of workplace spirit that can actually inspire employees during a recession.
This may seem like an off-topic article for PubliCola to be posting about (we’re not the Economist), but with so much public focus and animosity directed at state and county public employees’ COLAs and benefits during this recession, Shiller’s piece points to a similar way to share the pain in the private sector.
File this one under turning a crisis into an opportunity.
