Archives for labor



How Many Workers Is the Right Number for a Retailer? Stories from Trader Joe’s, Michaels, and Whole Foods

A reader named Quinton White points us to an interesting article by Jim Surowiecki in The New Yorker about how retails firms are succeeding by hiring more workers and spending more money training and rewarding them. Surowiecki writes:

A recent Harvard Business Review study by Zeynep Ton, an M.I.T. professor, looked at four low-price retailers: Costco, Trader Joe’s, the convenience-store chain QuikTrip, and a Spanish supermarket chain called Mercadona. These companies have much higher labor costs than their competitors. They pay their employees more; they have more full-time workers and more salespeople on the floor; and they invest more in training them. (At QuikTrip, even part-time employees get forty hours of training.) Not surprisingly, these stores are better places to work. What’s more surprising is that they are more profitable than most of their competitors and have more sales per employee and per square foot.

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Work: 12% Monday, 5% Friday?

The picture on this t-shirt is a joke. It states: “Always give 100% at Work: 12% Monday; 23% Tuesday; 40% Wednesday; 20% Thursday; 5% Friday.”

But it’s interesting that its creator chose not to spread the work evenly across the week. His/her view of labor supply suggests a temporal dimension that seems sensible:  More work on Monday than on Friday, more on Tuesday than on Thursday, with peak work effort on Wednesday.  In terms of labor productivity, this does not seem very far wrong.



Why the NBA Players Keep Losing to the Owners

The following is a guest post by David Berri, a Professor of Economics at Southern Utah University. He is also the lead author of Stumbling on Wins, the general manager of the sports-economics blog Wages of Wins, and is a frequent contributor to the Freakonomics blog.

In the past couple weeks I have written about labor negotiations in the NBA and the recent labor agreement in Major League Baseball. Now that we have agreements in both sports, thanks to the new NBA deal, I would like to address why the two unions involved in these negotiations have historically achieved such different outcomes.

Let’s begin with how the outcomes are different. Read More »



The Trouble Behind the New Unemployment Data

The November unemployment data that came out on Friday has Democrats crowing about the drop in the unemployment rate; yet Republicans are rightly pointing out that much of the drop was due to labor-force withdrawal. Neither party, however, seems to be noticing the most remarkable thing: the continuing, constant and historically high share of unemployment accounted for by the long-term unemployed, around 43 percent. This is bad for society for two reasons:

1. The burden of unemployment—the loss in utility—must increase the longer one is unemployed (and has perhaps exhausted savings and unemployment benefits).

2. With unemployment concentrated so narrowly, fewer people than otherwise experience the pain, so the political pressure to do anything to ameliorate the situation is lessened.

The huge rise in long-term unemployment, and the huge rise in the share of income accruing to the top 1 percent of households, both work to dis-integrate American society.



Cash Transfers: The Key to Keeping the World’s Working Kids in School?

A new paper from Eric V. Edmonds and Norbert Schady finds that cash transfer programs in developing countries may keep kids in school and out of the labor force. From the abstract:

Poor women with children in Ecuador were selected at random for a cash transfer equivalent to 7 percent of monthly expenditures. The transfer is greater than the increase in schooling costs at the end of primary school, but it is less than 20 percent of median child labor earnings in the labor market. Poor families with children in school at the time of the award use the extra income to postpone the child’s entry into the labor force. Students in families induced to take-up the cash transfer by the experiment reduce their involvement in paid employment by 78 percent and unpaid economic activity inside their home by 32 percent.

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Labor Peace in Baseball May Not Last Forever

The following is a guest post by David Berri, a Professor of Economics at Southern Utah University. He is also the lead author of Stumbling on Wins, the general manager of the sports-economics blog Wages of Wins, and is a frequent contributor to the Freakonomics blog.

Last week I looked at the labor negotiations in the NBA. Since then, the NBA appears to have reached an agreement with its workers, ending the latest dispute in professional North American sports.

Over the last three decades, labor disputes have become a common feature in professional sports. In fact – as The Wages of Wins indicated– relative to non-sports industries, labor disputes are about 25 times more likely in professional sports. So the recent lockout in the NBA was hardly surprising. Read More »



At Least One Labor Measure Was Up During the Recession

Productivity, that is. One factor was the trimming of deadwood; the other seems to be old-fashioned harder work. From a new working paper by Casey Mulligan (emphasis added):

During the recession of 2008-9, labor hours fell sharply, while wages and output per hour rose. Some, but not all, of the productivity and wage increase can be attributed to changing quality of the workforce. The rest of the increase appears to be due to increases in production inputs other than labor hours. All of these findings, plus the drop in consumer expenditure, are consistent with the hypothesis that labor market “distortions” were increasing during the recession and have remained in place during the slow “recovery.” Producers appear to be trying to continue production with less labor, rather than cutting labor hours as a means of cutting output.

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The Economic Battlefield of the NBA Lockout

The following is a guest post by David Berri, a Professor of Economics at Southern Utah University. He is also the lead author of Stumbling on Wins, the general manager of the sports-economics blog Wages of Wins, and is a frequent contributor to the Freakonomics blog.

With the NBA away, sports fans are looking for something to satisfy their need to watch teams strive for victory. Well, why not take a look at the teams competing in the lockout? Okay, maybe this is a contest only a sports economist could love. But while it may not appeal to everyone, the labor dispute is still best thought of as a contest between two teams.

The first team is the NBA owners. The owners are the dominant buyer in the world market for elite basketball talent, so they have substantial monopsony power. In the other corner are the players, who are currently trying to disband their union. This union gave the players monopoly power in the sale of elite basketball talent (more specifically, in helping to determine the conditions under which individual players would sell their services). When a monopsony meets a monopoly on the economic battlefield, the outcome is determined by bargaining. Read More »