Re: Lean and mean
From: [EMAIL PROTECTED] (Tom Walker) Max Sawicky wrote, It is one thing to say that overtime is bad for the following economic reasons and we would like to discourage it. It is another to put a social price tag on overtime. The latter would suggest the proper sort of tax. I still get the feeling that you are using a conventional definition of overtime -- hours in excess of a _fixed_ standard. If you want to use a variable standard, that hardly simplifies things. It would be helpful to know three things: what sort of trade-off obtains between overtime and extra jobs, the values placed on one less and one extra hour, respectively, by the person working overtime and the person working 'undertime,' and the social costs of the additional hour of undertime. We were talking about accounting, after all, which implies close quantification of these things. 1. I don't think it's useful to try to calculate the specific trade-off between overtime and extra jobs. In terms of accounting standards, this would be a diversion. Look at how depreciation is accounted for -- by _convention_, not by empirical analysis. Can you or anyone say how the conventional schedules of depreciation compare with actual depreciation? Of Actually there's a good bit of research on this. Obviously the theories are not perfect, but they at least provide a mechanism for calculating something. course not. Actual depreciation depends on so many variables that it couldn't realistically be calculated (except by the divine calculator, perhaps). By the same token, a tax on overtime would establish a convention based on a hypothetical trade-off, not a measured trade-off. If you don't know the trade-off, then you don't know what the tax should be. The tax becomes arbitrary. At least a debateble method provides a debatable design for a tax. 2. the subjective values placed on overtime and undertime by the worker is also a diversion. These can best be left to collective bargaining and individual choice over actual hours of work and rates of compensation *within a framework of social accounting for the overhead costs*. That way I fail to see how cost exists outside of choice. The myriad moving parts of the economic machine each have subjective bases for dealing with each other. if you want to work longer hours for more pay and an employer is willing to pay you the rate you require, so be it -- provided you or your employer aren't being subsidized for that arrangement. This begs the question of the tax. 3. again, like depreciation, the social costs would be determined by convention. Close quantification in accounting doesn't require a strict homomorphism between the inputs and "objective reality". The whole long Certainly we end up with rules of thumb to get things done, and these often grate against their motivating principles, when we have such principles. What are they, in this case? What is the basis for the conventions? . . . The first of these items seems pretty difficult to figure. The second could be derived by standard micro methods, and the third also seems within reach though its precise calculation could be all over the lot, depending on methods employed. 1. agreed, but not necessary. 2. perhaps, but again, not necessary. 3. yes, but precise calculation not necessary. Accounting without calculation. Give me some time to get my arms around that one. MBS === Max B. SawickyEconomic Policy Institute [EMAIL PROTECTED] 1660 L Street, NW 202-775-8810 (voice) Ste. 1200 202-775-0819 (fax)Washington, DC 20036 http://tap.epn.org/sawicky Opinions above do not necessarily reflect the views of anyone associated with the Economic Policy Institute other than this writer. ===
Re: Lean and mean
Max Sawicky wrote, It is one thing to say that overtime is bad for the following economic reasons and we would like to discourage it. It is another to put a social price tag on overtime. The latter would suggest the proper sort of tax. I still get the feeling that you are using a conventional definition of overtime -- hours in excess of a _fixed_ standard. It would be helpful to know three things: what sort of trade-off obtains between overtime and extra jobs, the values placed on one less and one extra hour, respectively, by the person working overtime and the person working 'undertime,' and the social costs of the additional hour of undertime. We were talking about accounting, after all, which implies close quantification of these things. 1. I don't think it's useful to try to calculate the specific trade-off between overtime and extra jobs. In terms of accounting standards, this would be a diversion. Look at how depreciation is accounted for -- by _convention_, not by empirical analysis. Can you or anyone say how the conventional schedules of depreciation compare with actual depreciation? Of course not. Actual depreciation depends on so many variables that it couldn't realistically be calculated (except by the divine calculator, perhaps). By the same token, a tax on overtime would establish a convention based on a hypothetical trade-off, not a measured trade-off. 2. the subjective values placed on overtime and undertime by the worker is also a diversion. These can best be left to collective bargaining and individual choice over actual hours of work and rates of compensation *within a framework of social accounting for the overhead costs*. That way if you want to work longer hours for more pay and an employer is willing to pay you the rate you require, so be it -- provided you or your employer aren't being subsidized for that arrangement. 3. again, like depreciation, the social costs would be determined by convention. Close quantification in accounting doesn't require a strict homomorphism between the inputs and "objective reality". The whole long historical discussion in accounting of how to handle overhead costs and "burdens" attests to the necessity for and contention over rules of thumb. See "Evolution of Accounting for Manufacturing Burden", chapter iv of Garner's _Evolution of Cost Accounting_. It's available on the web at: weatherhead.cwru.edu/Accounting/pub/garner/scroll/chapters/chap5.htm The first of these items seems pretty difficult to figure. The second could be derived by standard micro methods, and the third also seems within reach though its precise calculation could be all over the lot, depending on methods employed. 1. agreed, but not necessary. 2. perhaps, but again, not necessary. 3. yes, but precise calculation not necessary. Regards, Tom Walker ^^^ Know Ware Communications Vancouver, B.C., CANADA [EMAIL PROTECTED] (604) 688-8296 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
Re: Lean and mean
From: [EMAIL PROTECTED] (Tom Walker) Max Sawicky wrote, How do you define the social costs of overtime? Not costs to the worker and employer, mind you, but to third parties. That would inform the design of the tax. I'm not sure I follow you on this one. The social cost of overtime is unemployment (leaving aside excessive overtime, which might be detrimental to the worker's health, safety or social participation). This is implicit in the way that I've defined overtime -- as the amount by which an employee's hours worked exceeded a ratio of total hours worked/labour force (this could be a national or regional index, depending on what were the precise policy objectives). This is not an argument that overtime, as it is conventionally defined, can readily be converted into equivalent hours of new employment. The tax takes care of that problem; the hours don't have to be converted. I'm not sure I follow you because I expect that historical factors would have more of an influence on design than the definition of social costs. The definition of social costs would be more important for justifying the tax. Or is that what you mean by design? It is one thing to say that overtime is bad for the following economic reasons and we would like to discourage it. It is another to put a social price tag on overtime. The latter would suggest the proper sort of tax. It would be helpful to know three things: what sort of trade-off obtains between overtime and extra jobs, the values placed on one less and one extra hour, respectively, by the person working overtime and the person working 'undertime,' and the social costs of the additional hour of undertime. We were talking about accounting, after all, which implies close quantification of these things. The first of these items seems pretty difficult to figure. The second could be derived by standard micro methods, and the third also seems within reach though its precise calculation could be all over the lot, depending on methods employed. MBS === Max B. SawickyEconomic Policy Institute [EMAIL PROTECTED] 1660 L Street, NW 202-775-8810 (voice) Ste. 1200 202-775-0819 (fax)Washington, DC 20036 http://tap.epn.org/sawicky Opinions above do not necessarily reflect the views of anyone associated with the Economic Policy Institute other than this writer. ===
Re: Lean and mean
Max Sawicky wrote, If you want to use a variable standard, that hardly simplifies things. You're tying Gordion knots, Max. There are indexes for all kinds of things unemployment, consumer prices etc. They're not "simple" either, nor are they uncontroversial. Just wait and see: if the BLS put out an overtime index of the sort I'm talking about, Doug Henwood would cite it as gospel ;-). Then we'll have to go through the whole rigamarole of the limited perspective provided by the data, etc. etc. etc. Accounting without calculation. Give me some time to get my arms around that one. Take as much time as you need, Max. But also please read what I wrote. I didn't say anything about "accounting without calculation" -- I was talking about the non-necessity of basing a rule of thumb on the precise calculation of an ultimately incalculable amount. Just more Gordion knots. How much is the annual depreciation on computer equipment? According to my tax return it's (ho, ho, ho) 30%. So my three year old 486 is still worth $1400. I could buy a new one with better specs for $1000. But the amount I will enter on my return will be a "precise calculation" based on the purchase price minus previously claimed allowable depreciation. The 30% is way off; it still does the job. To say that there's an element of arbitrariness in the calculation is not to say that the calculation is arbitrary. Regards, Tom Walker ^^^ Know Ware Communications Vancouver, B.C., CANADA [EMAIL PROTECTED] (604) 688-8296 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
Re: Lean and mean
Max Sawicky wrote, How do you define the social costs of overtime? Not costs to the worker and employer, mind you, but to third parties. That would inform the design of the tax. I'm not sure I follow you on this one. The social cost of overtime is unemployment (leaving aside excessive overtime, which might be detrimental to the worker's health, safety or social participation). This is implicit in the way that I've defined overtime -- as the amount by which an employee's hours worked exceeded a ratio of total hours worked/labour force (this could be a national or regional index, depending on what were the precise policy objectives). This is not an argument that overtime, as it is conventionally defined, can readily be converted into equivalent hours of new employment. The tax takes care of that problem; the hours don't have to be converted. I'm not sure I follow you because I expect that historical factors would have more of an influence on design than the definition of social costs. The definition of social costs would be more important for justifying the tax. Or is that what you mean by design? Regards, Tom Walker ^^^ Know Ware Communications Vancouver, B.C., CANADA [EMAIL PROTECTED] (604) 688-8296 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
Re: Lean and mean
From: [EMAIL PROTECTED] (Tom Walker) relevant tax here an overtime tax. Define "overtime" as weekly hours worked in excess of a standard attained by dividing total labour force hours worked by total number of labour force participants (both employed and seeking employment). This could be an index the BLS could produce quarterly. How do you define the social costs of overtime? Not costs to the worker and employer, mind you, but to third parties. That would inform the design of the tax. MBS === Max B. SawickyEconomic Policy Institute [EMAIL PROTECTED] 1660 L Street, NW 202-775-8810 (voice) Ste. 1200 202-775-0819 (fax)Washington, DC 20036 http://tap.epn.org/sawicky Opinions above do not necessarily reflect the views of anyone associated with the Economic Policy Institute other than this writer. ===
Re: Lean and mean
Max Sawicky wrote, immediate relevance is that business firms could be handed 'user fees' or Pigouvian taxes (e.g., taxes that 'correct' externalities, like pollution) and these would show up as costs in any accounting framework. So would general taxes on capital which financed goods whose cost could not be mechanically traced to individual firms (e.g., public education). Motivating such taxes and expenditures would depend in part on the social accounting to which I alluded in my previous post. Does that wrap it up nicely? That wraps it up extremely nicely. For the sake of argument, let's call the relevant tax here an overtime tax. Define "overtime" as weekly hours worked in excess of a standard attained by dividing total labour force hours worked by total number of labour force participants (both employed and seeking employment). This could be an index the BLS could produce quarterly. The proceeds from the tax then form a fund to provide unemployment benefits. The fine details of the tax would hinge on social policy objectives, but the crude outline would be to insure that the social overhead costs show up as costs in the accounting framework. Does that follow? Regards, Tom Walker ^^^ Know Ware Communications Vancouver, B.C., CANADA [EMAIL PROTECTED] (604) 688-8296 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
Re: Lean and mean
From: [EMAIL PROTECTED] (Tom Walker) From ACCOUNTANTS AND THE PRICE SYSTEM:THE PROBLEM OF SOCIAL COSTS . . . Sounds like the overhead costs of labor can be translated as public goods in the neo-classical sense of the term. Don't get me wrong. I love public goods. At the slightest encouragement, I will launch into a disquisition on how to finance them. The immediate relevance is that business firms could be handed 'user fees' or Pigouvian taxes (e.g., taxes that 'correct' externalities, like pollution) and these would show up as costs in any accounting framework. So would general taxes on capital which financed goods whose cost could not be mechanically traced to individual firms (e.g., public education). Motivating such taxes and expenditures would depend in part on the social accounting to which I alluded in my previous post. Does that wrap it up nicely? MBS == Max B. Sawicky Economic Policy Institute [EMAIL PROTECTED] Suite 1200 202-775-8810 (voice) 1660 L Street, NW 202-775-0819 (fax) Washington, DC 20036 Opinions here do not necessarily represent the views of anyone associated with the Economic Policy Institute. ===
Re: Lean and mean
Tom Walker wrote: Max Sawicky wrote, immediate relevance is that business firms could be handed 'user fees' or Pigouvian taxes (e.g., taxes that 'correct' externalities, like pollution) and these would show up as costs in any accounting framework. So would general taxes on capital which financed goods whose cost could not be mechanically traced to individual firms (e.g., public education). Motivating such taxes and expenditures would depend in part on the social accounting to which I alluded in my previous post. Does that wrap it up nicely? That wraps it up extremely nicely. For the sake of argument, let's call the relevant tax here an overtime tax. Define "overtime" as weekly hours worked in excess of a standard attained by dividing total labour force hours worked by total number of labour force participants (both employed and seeking employment). This could be an index the BLS could produce quarterly. The proceeds from the tax then form a fund to provide unemployment benefits. The fine details of the tax would hinge on social policy objectives, but the crude outline would be to insure that the social overhead costs show up as costs in the accounting framework. Does that follow? Regards, Tom Walker ^^^ Know Ware Communications Vancouver, B.C., CANADA [EMAIL PROTECTED] (604) 688-8296 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/ Presumably layoffs, work which produced more than average injury, death, mental illness, and addiction would also be taxed as well. Gar W. Lipow [EMAIL PROTECTED] 815 Dundee Road, NW Olympia, WA 98502 PH: 360-943-1529
Re: Lean and mean
Gar Lipow wrote, in response to my crude outline of an overtime tax: Presumably layoffs, work which produced more than average injury, death, mental illness, and addiction would also be taxed as well. I agree in spirit, but have reservations in the letter. Presently layoffs and injuries are taxed (inadequately, of course) respectively through experience rating of unemployment insurance and workers' compensation. Experience rating (charging employers for the cost of benefits to laid off or injured workers) is very incomplete and has been shown to inhibit some hiring. It's quite possible that an overtime tax, combined with a modified unemployment insurance program could both remove the undesired side effects of UI and at the same time achieve some of UI's objectives (tying benefit levels to contributions, encouraging labour force attachment). Please note that I'm not necessarily endorsing those objectives of UI, only acknowledging them. Minimum wage legislation is a crucial part of the package and so is national health insurance. Whether one wants to roll the entire social costs of labour into a single package is a matter of strategy. I would tend to lean toward going as incrementally as possible: introducing an overhead tax and national health and tinkering with minimum wages, unemployment insurance, workers' compensation. I want to back up and reiterate two points: 1. the objective of this exercise is technical -- to find a way to formally enter the social costs of labour onto the accountant's ledger. The amount of welfare created would remain always a matter of social policy. 2. the occasion for the scheme being mooted here is Max Sawicky's question about how to respond to what are likely to be a continuing saga of IMF bailouts. The IMF will want to impose "accounting standards", accounting standards that have been developed by a profession and industry that has a close commercial relationship to capital in general and finance capital in particular. My image of the typical IMF package is that it deliberately seeks to balance the books through a forced depletion of social capital. Not only does that have obvious bad consequences for the country being "rescued" but it dumps cut-priced goods on world markets, forcing other countries to compete through immiseration of their workers. It seems to me that labour and the left could best respond to the terms of the bailouts by pointing out that not only are they morally repulsive, but they are BAD BOOKKEEPING. Essentially, this goes to the heart of the IMF's rationale and challenges its claims of (transcendent) professional competence. Regards, Tom Walker ^^^ Know Ware Communications Vancouver, B.C., CANADA [EMAIL PROTECTED] (604) 688-8296 ^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
