The Anti-Wedge: a Fresh Look at Labour Costs and Benefits
In a 1964 article, Joseph Garbarino mentioned the growing consensus among
business, government and labour that fringe benefits formed a
fixed-cost-per-worker wedge that tilted employers toward scheduling longer
hours of work for their existing workers in preference to hiring new
workers. Since the 1960s that view has formed the bulwark of conventional
wisdom about the relationship between hourly labour costs, working time and
private sector job creation.
Much has happened since 1964. The U.S. escalated the war in Vietnam and
eventually withdrew. Men walked on the moon. OPEC hiked oil prices and
recycled petrodollars. Women entered the workforce in droves. Watergate
disgraced a President. Mao Zedong kicked the bucket and the Gang of Four got
busted. The Shah of Iran fell. Sandanistas rose up. Prince Charles married
Lady Diana Spencer. Microcomputers were widely adopted. The stock market
crashed, then quickly recovered.
Unemployment crept steadily up, income gaps widened. Inflation menaced,
flared and then slunk away. Baby boomers' hair got longer, then shorter,
then started turning grey and falling out. Skirts got shorter, then longer,
then were traded in for slacks. Tie got narrower, then wider, then came off,
then went back on again.
Three Mile Island melted down and so did Chernobyl. The space shuttle
Challenger blew up. The Berlin wall was dismantled. The Soviet Union
dissolved. Nelson Mandela got out of jail, passed go and collected $200.
Bill Clinton didn't inhale. Free trade and global finance ran amok.
Corporations downsized, outsourced and re-engineered. Governments turned on
to monetarism, tuned in to the bond markets and dropped out. O.J. got off.
The internet took off. Princess Di went out like a candle in the wind. The
millennium bug lurked patiently, waiting for cue or cure.
And all the while, the fixed-cost wedge continued to adequately explain the
mysteries of labour costs, working time and private sector job creation.
Or did it? What if something had changed during all those years? After all,
the fixed-cost wedge itself was the product of a gradual growth through the
decades following the second world war. What if an unheralded "anti-wedge"
has quietly emerged in the past twenty or thirty years? Where might we look
for such an anti-wedge? What might be its implications for the future of work?
Regards,
Tom Walker
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Vancouver, B.C.
[EMAIL PROTECTED]
(604) 669-3286
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The TimeWork Web: http://www.vcn.bc.ca/timework/
