Tuesday, January 22, 2008

"Historic" Labor Accord

Francis Kramarz gives a balanced assessment of the recent labor accord, yet his final assessment is "disappointed but not surprised." Among his reasons for disappointment: the report is full of good intentions about assisting job-seekers with training and employment counseling, but nothing is said about financing. The new provisions for termination by mutual consent of employer and employee provide for unemployment benefits in such cases, but the burden is to be born by the state, not the firm. It is expected that 20 percent of terminations will be converted to this procedure. Nothing is done about reform of union financing, which creates certain perverse incentives. Nothing is done about the rules governing layoffs for economic reasons or the manner in which such cases are judged if appealed. The report, Kramarz believes, "acts as a smokescreen."

Good additional comments here.

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