“The overtime cost of a 9-hour shift would be one hour a day per worker. If this is what was standing in the way of the scheme progressing then it probably wasn’t that much more efficient anyway.”

I agree with you, but better say that if there are positive externalities to society from the change in shifts it might be socially optimal even if its not optimal through the employee -employer bargaining process.

I’m sure that there could be a information asymmetry argument that could counter our point of view as well Kimble, maybe

Now, if the 9-3 workers were paid less per hour…

As a side note, the EPMU is decrying private equity managers. This Unions vs. Private Equity squabble may be new to NZ, but IIRC it is a debate that has been going on for a few years in the UK.

The Private Equity managers dont have the same sort of emotional ties that traditional owners would to the business they are managing. This makes it easier for them to see and exploit opportunities overseas, ie outsourcing and closing home offices etc.

The Unions finally have some ‘bastard capitalists’ to rail against! They must be loving it.

The definition of flexibility is a bit wishy washy, and that may make it difficult to enforce. The problem with defining it more stringently is that it may have big costs to specific types of firms, etc. The 9-3 idea is interesting though, I wonder if I could work 7am-8pm everyday and get an extra day off, that would be awesome

I know of a factory with a 24 hour operation which looked at having a 9 to 3 shift (as well as a 3pm to 12am and 12am to 9am shifts), however the unions got in their way by erecting such a huge monetary obstacle in front of the 9 hour shifts that the idea was canned (eg overtime). The factory looked at this idea because they had many instance of parents taking a whole shift off sick simply because so they could pick up a child from school at 3pm, and similar.

In terms of overcoming old fashioned thinking, I would say that wider acceptance of 9 to 3 shifts would be a big step forward. Simply having a requirement for “flexibility” is too lacking in definition, too wishy washy and hard to enforce.

I fully and completely buy that argument that the current structure of a firm may not be optimal, and I also fully subscribe to the idea that government policy can create pareto improvements in the case of multiple equilibria.

However, if this is an argument of only productivity, then the current equilibrium would be unstable as any firm that suffered a slight upward shock to their degree of hour flexibility (a lenient manager arriving for example) would find there to be an increase in production, and so would not revert to their original level of flexibility.

As a result, I still feel that supporting this bill relies on an equity argument. Given my own value judgments this doesn’t quite stack up, but of course everyone has their own set of value judgments and will reach different conclusions.

Although I do not expect flexible working hours to destroy businesses or anything, I fear that there are some industries that will have big problems, especially manufacturing. Heap this on top of the high exchange rate, tight labour market, and already tight margins and I can understand why manufacturers aren’t happy.

Finally, I completely agree with your last point, damn those perverse incentives.

Good work Kimble and Tim, I like your comments 🙂

Love it. I’d go a step further and say everything is economics. Of course I’m sure every social science can say the same thing 🙂

I agree that the changes could potentially help, but I also agree with Matt that the benefits as we reckon them now, wont outweigh the costs.

There is potentially some other factor that we are not seeing, that no one can yet see, that would mean the changes would turn a net benefit. However, we dont want the government to make a habit of legislating a change to current laws on the hope that the situation is saved via some sort of ‘deus ex machina’.

“I presume it is illegal to ask a prospective employee whether they have or are planning to have kids soon? If so, discrimination in hiring will be directed not just at current or soon-to-be parents, but anyone of the demographic most likely to take advantage of the flexible hours law (probably women 25-35 or so).”

I reckon it is already happening. And to be perfectly honest it is fair enough. The chance that a woman will leave the workforce for a time to have children is a risk that is known and therefore accommodated for in the hiring process. It makes female employees less valuable that male ones.

PS. All policies are economic policies.

I had the same thoughts as you expressed in your first post, that the statement “but if that was sufficient to counter this first effect, employers would already let them do it!” ignores some of the barriers to workplaces becoming more productive, which might be reduced by a change in law.

Actually, you could extent the idea of ‘barriers to more productive working arrangements’ to a broader concept of ‘barriers which prevent workplace culture and norms from changing’. I was thinking along the following lines:

(a) All workplaces share, to some degree, a work ‘culture’, including norms around working hours, hiring practices, workplace behaviour, the nature of employer-employee relationships, etc.

(b) This culture might lead to outcomes which aren’t very ‘good’ (are undesirable in some moral sense). For instance, a part of the culture of business in the past was that women weren’t seen as fit for top positions and therefore would neither be hired for those positions, or supported in those positions by their male subordinates. They may have been potentially better leaders, but the attitudes of the time prevented them reaching this potential. This ‘equilibrium’ clearly wasn’t fair, or just (and was probably even less productive for firms than the no-discrimination alternative).

(c) With a different culture, a (morally) better ‘equilibrium’ would result, but there are barriers preventing this work culture changing. For instance, if a women was given a managerial position in charge of a team of hostile and unwilling workers, she would be unlikely to be effective, even if she could have managed a non-hostile team of employees better than anyone else.

(d) Where there is an old-fashioned work culture which is less desirable than some alternative, but nonetheless sustains itself, things can be improved by some ‘shock’ that forces the culture to change, such as a change in employment law. Laws prohibiting gender discrimination probably helped dissolve discriminatory attitudes at a faster rate than would otherwise have occurred.

Therefore (e) some law changes can be justified because of their effects in changing norms, which ultimately give us a better outcome. I think the phrase the Nats like is ‘social engineering’ (although their criticisms are noticeably absent when discussing ECONOMIC policies which have social consequences).

Anyway, I don’t really know whether the ‘flexible hours law’ fits within that type of argument, but I think we should recognise that such an argument (ie, “government policy is justified by the existence of ‘multiple equilibria'”) can potentially hold. I don’t know the details of the law, but my gut feeling is that efforts towards more flexibility in working hours are a good thing. And I’m generally no Labour lover.

Another thought occurred to me when I read this:

“The main loser will be the person who has a family but wants to work, they will not be offered jobs (unless they hide the fact they have kids), and if they do they will be offered a lower wage”

I presume it is illegal to ask a prospective employee whether they have or are planning to have kids soon? If so, discrimination in hiring will be directed not just at current or soon-to-be parents, but anyone of the demographic most likely to take advantage of the flexible hours law (probably women 25-35 or so).

Cheers
Tim

People have to understand that the goal should be for employers and employees to have relatively equal standings in terms of bargaining power, and that isn’t the goal of unions, unions are there solely to increase the market power of employees.

In practical terms I think the CTU is a bit nutty, I rekon they could do a far better job of manipulating the public for there own ends 🙂