Tuesday, July 29, 2008

A Fundamental Misunderstanding of the Problem

Yesterday NPR's Morning Edition did a story on the rising number of people who go to work when they're sick. Not surprisingly, many of these ill employees take their viruses to work because of the financial repercussions of staying at home.

In response to this trend/problem, some cities have required many of their employers to offer paid sick leave. Federal legislation has also been proposed.

What struck me about this story were the comments of Mark Burgat, vice president of government relations for the California Chamber of Commerce, who opposes such measures:

The best way to deal with sick leave? Leave it up to the marketplace, Burgat says. . . . "When an employee comes in to look for a job — whether it's an entry-level job or a higher job — they're not looking at just the salary, but the entire benefits package," he says. "Sick leave and medical insurance and those sorts of things are part of that total package, and that's what allows one business to attract employees over another business."

Here's the problem: People who can't afford to call in sick generally don't have the luxury of choosing a job based on the benefits package. Many are lucky to find a job that offers any benefits at all. I'm not saying that a free marketplace is bad; I'm just saying that this guy doesn't get it.

While I'm on the subject of not getting it, I've heard more than one commentator suggest that the key to surviving the sluggish economy is putting more money in savings. One pundit advised having enough money in savings to cover 9–12 months of living expenses (as opposed to the six-month reserve that financial advisers often advocate). When asked where these savings-account deposits might come from, the commentator in question advised selling stocks or investing less in stocks. Again, the people who are being hurt most by recent economic woes may not have more than 9–12 days of living expenses tucked away. They probably aren't investing in many stocks, either. Telling them to save more isn't terribly helpful.

2 Comments:

Blogger Dr. Tony said...

Josh,
Is it a fundamental misunderstanding of the problem on their part or some mis-guided notion in ours? After all, according to the economic adviser to one of the Presidential candidates, the recession is essentially mental.

I guess my lack of work during the week for the past year (at least I still can work on Sundays) has just been a bad nightmare and I will wake up with Victoria Principal staring at me as I come out of the shower. :)

12:47 PM  
Anonymous Dan said...

Josh,
Great post. I agree with you completely. I recently had a professor that claimed globalization was good because the factory jobs leaving the US would result in higher paid jobs taking their place. Even if that's true, it's little consolation to the 2000employees of a local textile mill that were just laid off. They aren't qualified for the new jobs, and are now struggling with financial uncertainty. It seems like most such theories are skewed from wealthy point of views.

5:34 PM  

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