Comments for Wages and the Lottery at http://www.cepr.net , comment 1 to 9 out of 9 comments http://www.cepr.net Thu, 20 Jun 2013 03:14:34 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/wages-and-the-lottery#comment-15071 Of course, the long term problem with that approach is that at some point information will reach the younger generation. When that happens you will find young people aren't willing to work 80 hours a week, doing morally questionable activities if there is no payoff at the end of the rainbow. (Rumors in law are already circulating that there is really no pay day in the profession, the possibility of making partner being miniscule regardless of ability and willingness to self-flagellate). - comma Tue, 28 Feb 2012 01:48:51 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/wages-and-the-lottery#comment-15069 Ever since Bain & Company visited Cornell in 2009 we have seen a similar thing at Cornell. There have been rounds of early retirements, re-organizations, budget cuts and layoffs for the last 3 years. [url]http://www.paintedbarstables.com/ludlow/photos/cornell_employment_2004-2011.gif [/url] The net effect is a dramatic drop in staff and faculty (39% overall). While the $60M+ savings is no doubt important for Cornell's new NYC campus, it does seem a crippling blow to the Ithaca campus, especially to future research. - deanx Mon, 27 Feb 2012 23:38:19 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/wages-and-the-lottery#comment-15039 [quote]In the case where a firm is keeping older, less productive, workers on the payroll and paying them a premium for seniority, ending the lottery prize (i.e. firing the workers) is a pure short-term gain. (This is of course a caricature -- older workers are not necessarily less productive.)[/quote] The older workers in many of these contexts, e.g. law firms, accounting firms, and other professional service firms, are also the firms' owners, so firing them isn't always easy. That is, unless the other partners oust them, which is what happens in law over the last few years. The other issue is that age is sometimes more beneficial than youth due to the experience, name recognition, and rain-making abilities elder workers provide firms. Part of it is the old, rich, white men network, which is an economic problem in itself. - LSTB Mon, 27 Feb 2012 02:11:56 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/wages-and-the-lottery#comment-15037 We've seen this variant at work as public school systems contracted out Public Employee classified workers for "savings" using private contractors. Districts have shed these support workers and positions since 2005 even as the sales pitch for charter schools has ramped up. The employees (many long time) were "let go" with the understanding they could apply for their old job with the private contractor. The lower wages, loss of benefits, and loss of work if one was not hired by the contractor (along with loss of union representation) were staggering to families dependent on those jobs. For the districts, it was the icing on the cake. The Public and the workers lose when committed public employees are displaced by the private sector. - Betth in OR Sun, 26 Feb 2012 22:13:21 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/wages-and-the-lottery#comment-15036 Buy a lottery ticket, and you really are in the running, with your one in 100 million chance of winning. Many of the workers entering the various jobs in the hope of striking it big are really never in the running at all. Increasingly, firms are figuring ways to lure workers and then dump them. And as long as the economy stays weak or worse, firms don't even have to do that. What kind of lottery is it when, if you win, you get to [i]subsist[/i]? - Hugh Sansom Sun, 26 Feb 2012 16:58:03 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/wages-and-the-lottery#comment-15034 The goal of Private Equity is to maximize their profits. This is generally accomplished by taking underperforming companies and gussing them up (e.g. the lipstick on a pig approach) before dumping them on other longer-term investors/suckers. The lipstick can take various forms (firing workers, selling off assets, etc.) Occasionally, they wind up putting lipstick on a supermodel, but I attribute that to the law of large numbers, rather than "Alpha" on the PE firm's part. - DanC Sun, 26 Feb 2012 11:41:33 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/wages-and-the-lottery#comment-15028 In a university setting, as rookie salaries rise, senior faculty can be found making substantially less, unless they keep their research productivity close to rookie level. Many departments, not necessarily at the top schools, can have significant salary inversion. It is then extremely costly to have these low paid senior folks retire to be replaced with higher paid rookies who also might have 1/3 the teaching load of the retirees. Seniority does not mean cost, only with k-12 teacher unions (and some other states higher ed systems) does merely staying alive grant increased wages. - pete Sun, 26 Feb 2012 09:09:10 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/wages-and-the-lottery#comment-15027 Unfortunately, I don't see this being a bad long-term strategy, because at least in fields like tech, younger workers are extremely naive about this kind of thing. They believe that job security is only for dead weight, and that they are so exceptional that they will always have a job no matter what's happening to other workers in their industry. - rmt Sun, 26 Feb 2012 08:17:22 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/wages-and-the-lottery#comment-15025 This is precisely the practice of the Big Companies such as Boeing who does everything they can to ensure the early exit of long term highly compensated workers who have worked their butts off for 30 years. Too bad - if your new snot nosed Director makes less than you - your out. - jumpinjezebel Sun, 26 Feb 2012 07:23:57 +0100