I was reading today how Macy’s is the next up to announce big layoffs, 7000 nationwide…or about 4% of their workforce.

Locally, Boeing announced layoffs (10000) as did Microsoft. (5000).

I thought about what it meant for those people.  Some will be OK as they have marketable skills and savings to tide them over, bu many will have a hard time and end up on state unemployment, and perhaps eventually federal assistance.

And suddenly it hit me:  The answer to the problems.  How to help the employer save money and people stay working:

Voluntary pay cuts.

Put simply, if Macy’s needs to cut its payroll 4%, they should just apportion wage cuts accordingly.  Heck the upper levels could be cut a bit with no impact.  And wouldn’t the average worker be willing to lose a bit to ensure that everyone stays employed?

Take me and where I work now.  If my team faced such a layoff, I know we would all take a voluntary cut to preserve the team we have.  We work well together and support each other.

And me personally, I waste way too much money on selfish crap not to be able to tighten my belt if I had to.

And the win gets bigger, as less people on welfare and unemplyment means less drain on the resources for those who need it.

It was simple, perfect and realistic.  Everyone wins.

I sat back and awaited for my Nobel Peace Prize in economics.

Then I realized that the plan would fail.

First, some people would not agree and would fight it, not wanting to be the ones cut.  They would complain.  Lawsuits would be filed, leading to Government intervention.

In fact, the very idea, a whisper of intent would likely bring the Government roaring out of its shell to intervene.

And as soon as the Government got into the mix, all hell would break loose. 

Some lower wage positions would of course have to exempted as we cannot disadvantage the poor, while they would push for a higher proportion of upper wage jobs to make up for it.

I imagine the arguing about where to draw the line between cuts and no cuts would encompass hours/days/weeks of debate.

Then, of course, some would feel compelled to point out that this is a grand way to do some income leveling, so maybe the lowest wages could be raised and still be absorbed in the cuts.

And of course there would be a minority multiplier, sponsored by the ACLU, NOW and the NAACP, where white males receiving cuts would get an additional fraction cut to right the long standing racial disparities.  Minorities and women getting the pay boost would of course get a similarly higher percent increase.

Finally, wealth redistribution we can believe in.

As you can see from my scenario, the Government given the chance to help do something good would over do it until it became meaningless.

This is purely a product of my cynicism.  But if you think I am overly pessimistic, consider how well the Government is handling the Stimulus.

Nuff Said.

Finally though, the real show stopper would hit:  The Unions.  Whether or not this was done solely by the companies, or via Government mandate, they would immediately argue that they are exempt from any and all of this arguing because of their current collective bargaining agreements.  Any attempts to force the issue would invariably lead to lawsuits.

Well, at least the lawyers would have work. 

But aside from my cynicism, the idea, to me has merit.  If the average person had his heart in the right, and wanted to help his fellow employee, he would be willing to make a sacrifice to keep everyone working.

This, to me, illustrates my belief in the power of people, versus the power of Unions and Governments.

Unions and Governments see a need and take the simple solutions and complicate it, mandate it, control it and attempt to artificially sanitize it, because they see statistics and contracts and percentages and influence.  The people rarely see much effect due to unintended consequences, while the Government and Unions gain power.

People however see a problem, find a solution, implement it, and then they all grow stronger by virtue of that solution.

Just my opinion. 

Maybe I suffer from Pollyanna-itis, but I would prefer to focus my cynicism on the Governments and organizations that have so richly earned it, and continue to believe in the goodness of ordinary people who also earn that belief daily. 

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