Wednesday, April 04, 2007

One Safety Net Is Disappearing. What Will Follow? - New York Times

Welcome to the new macroeconomics for employer/employee relationships...  Perennially green sales reps => another good reason to buy stuff from the web rather than franchised stores, imho.

In strictly economic terms, however, paying people based on their age is a bit skewed. Sixty-year-olds are indeed more productive than 30-year-olds, studies have shown, but not 50 percent more productive. Experience isn’t quite as valuable as we might like to believe. In effect, most companies are underpaying their younger workers and overpaying their older ones.

This somewhat uncomfortable fact was a big part of the extraordinary layoff announcement from Circuit City Stores last week. On Wednesday, the company dismissed 3,400 people, or about 8 percent of its work force, not because they were doing a bad job and not because the company was eliminating their positions. Instead, executives said the workers were being paid too much and that the company would replace them with new employees who would earn less. It was the second such layoff at Circuit City in the last five years, and it offered an unusually clear window on the ruthlessness of corporate efficiency.

Source: One Safety Net Is Disappearing. What Will Follow? - New York Times

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