Wednesday, May 27, 2009

Are layoffs unethical?

Ah the rarified sensibilities of the NYT "ethicist" who is apparently unfamiliar with the notion of employment at will. Or perhaps he thinks that workers have a similar duty to firms when they quit for other jobs when the times are good?

As I have noted before, there are good reasons to think that CEO salaries may well be too large, but that is unrelated to the layoff issue. People with high salaries should have the same ethical obligations with low salaries.

We treat almost all people as objects almost all the time. It could be no other way because both time and emotional resources are quite finite indeed. Should I bond with the pilots of the planes I fly? How about the all the people who designed and built the bridges I drive on? That would take a lot of our time. Maybe we should just all do our jobs and save the hugs for those close to us.

European systems of unemployment insurance are very generous, almost certainly more generous would be optimal from the standpoint of workers deciding ex ante behind a veil of ignorance. There is a literature on this about which, rather obviously, the NYT ethicist remains in complete ignorance.

UI in the US includes automatic extended benefits (up to a year) in areas of high unemployment. Major plant closings and such elicit rapid response teams from the active labor market policy agencies - imagine government workers swooping down in black helicopters while wearing DOL-ETA windbreakers. Services are provided, among them classroom training in skills for other occupations. These programs have so much stimulus money they are having trouble coping with it administratively. But looking all that stuff up would require more work than rambling on about the cool tractor videos are Caterpillars website.

Not impressive.

Hat tip: Jessica Goldberg