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by John Brian Shannon | June 7, 2016
Globalization was inevitable. Both the positives and negatives of globalization were inevitable. And we’re now moving into a more mature phase of globalization — a phase where common sense plays a much larger role.
After all, does it make more sense to import onions from thousands of miles away in Chile or Indonesia for example, or to grow them on the rooftop of your local big box grocery store?
Think of the CO2 emission savings alone as one way of many to demonstrate how unrestricted globalization works against our common good.
For years I’ve talked-up the benefits of ‘Regionalism‘ where the largest share of goods and services are provided to consumers and business by producers and manufacturers within that economic or geographic region.
It’s not only in regards to fresh produce. With 3D printing and a regional facility ‘the latest thing’ can be manufactured in minutes, regionally, although the online order may have been received thousands of miles away — resulting in faster shipping and larger numbers of (regional) jobs, as opposed to the One Big Factory model, building ‘the latest thing’ in Shenzhen, China.
Of course it works both ways.
For Chinese consumers who want the latest Ford F-150 pickup truck, does it make sense to have one shipped from thousands of miles away in North America, or does it make more sense that Ford builds an assembly plant in China (and hires local workers) and fills orders from there?
I think there is still more growth to be milked out of globalization, but the next logical step is Regionalism which will cut costs, improve profits, and give consumers and business more and better choices. In high unemployment jurisdictions I would expect to see rates fall — perhaps dramatically, while low unemployment jurisdictions may see tiny improvements.
Although I agree with international trade agreements in principle, TPP seems excessively weighted toward corporate interests and not toward consumers or national sovereignty. For that reason I’m against it. The cloud of secrecy surrounding TPP certainly hasn’t helped. And the fact that someone of the rare and high calibre of Elizabeth Warren has doubts about it, tells me everything that I need to know about it. Full stop.
However, any trade agreement that enhances trade flows while enhancing national sovereignty and can show a distinct benefit to consumers and business alike should be aggressively pursued.
For me it isn’t about abandoning globalization, it’s about globalization reaching its full potential without destroying sovereignty, consumer trust, and entire segments of the economy.
It’s more about continuing to grow globalization (whenever that makes sense) and adding regionalism to the mix (wherever that makes more sense) and enhancing national sovereignty.
The day that Apple Computer is building iPhones in factories in every region of the world, that Ford Motor Company has assembly plants in every second country, every piece of clothing is manufactured regionally to the designer’s exact specifications, and most fresh produce is grown within 100 miles of its target consumer, that’s when we will see the maximum benefit from our investment in globalization.
We are where we are in regards to globalization and it has been a qualified success. But the potential of globalization + regionalism is one whole order of magnitude greater.
- The New Backlash Against Globalization (Project Syndicate)
- Globalization: A Brief Overview (IMF)
- What is ‘Globalization’ video (Investopedia)
- The Role of the International Organisms in the Globalization Process (Tănăsescu et al., PDF)
- Political regionalism in International relations (Wikipedia)
- Economic regionalism in International relations (Encyclopædia Britannica)
by John Brian Shannon | June 24, 2015
In Sweden, nobody sleeps in dumpsters. Not one.
And everyone who visits Sweden wonders why.
The simple answer is that human beings in Sweden are treated as the country’s number one resource. In Sweden, people are ranked #1 while everything else in the economy is considered less important
Strange system, isn’t it?
That’s not to say that Sweden’s various economic sectors and segments aren’t important, it’s just that ‘people come first’ with the Nordic Model — while companies and government come second and third, respectively.
“Are there any jobs?”
Well yes, there are! In fact, if you want to work, you work! However, some job-sharing may be involved, depending on your industry.
“Are you saying the unemployment rate in Sweden is 0 percent?”
Almost. Historically the unemployment rate hovers around 2 to 3 percent. But since the global financial crisis hit, Sweden’s unemployment rate shot up to a record-high to 8 percent in August, 2013.
But things are not always what they seem. And this is one of those times.
In Sweden, there are employed and unemployed people just like anywhere else — but the difference is every worker is employed for at least 6 months of the year, as the country has mandatory job-sharing for those industries that can’t fully employ their workers.
“So nobody is unemployed for longer than 6 months per year?”
Yes, that’s true. There is unemployment, but each worker knows that they will get re-hired and they know the exact day when they will be re-hired — usually at the same company that they have worked for the past number of years.
It’s a very temporary unemployment rate in Sweden, and there are zero ‘discouraged workers’ — those who’ve given up looking for work. (Unlike the situation in North America!)
The bottom line? It’s a simple case of making certain everyone gets to contribute to the Swedish economy over the course of the year — which has many benefits for workers, their families, corporations and for Swedish GDP.
“Why do Swedish workers, corporations, and the government like this arrangement?”
The benefits are many.
First, corporations love this setup as some industries cannot employ all of their workers year-round, or in industries where the work is seasonal, corporations can easily lay-off their workers and know that their fully-trained workers are guaranteed to return to work on the very day the corporation requests them to return.
Swedish companies always have a waiting list of employees who want to return to work. These workers are temporarily receiving unemployment insurance, but have worked for the company within the previous six-month period.
It’s a simple case for companies of figuring out how many people they need for the coming weeks or months, and sending out the appropriate number of emails to ‘their’ (temporarily unemployed) workers.
Without any further ado, those people show up on the dates requested and they quite willingly return to their ‘old job’ — the job they had before they were laid-off.
Whether their job was canning herring, cutting down trees, teaching science class at High School or working at IKEA, they simply show up and resume their previous duties.
Sometimes, this means that other workers are temporarily laid-off to make room for the returnees, but in the case of seasonal workers or during busy times such as the Christmas shopping season, nobody gets a layoff notice AND the many returnees are simply added to the weekly work schedule.
Sometimes it happens that two people will share a certain position for decades, trading it back and forth every six months.
Remember, the unemployment rate historically sits at 2-3 percent. So, people are mostly employed anyhow.
Second, corporations like having a large pool of already trained workers that are easily available to them.
Because these workers are never away from ‘their’ company for longer than six months (usually fewer months than that) they can return to their company with their skills intact and their familiarity with the policies and procedures of that company allow them to ease back into their ‘old job’ with only a half-day refresher course.
A large pool of fully trained workers with sharp skills, returning to their old jobs, exactly when and where requested, at any time the company wants. That’s a bonus for companies.
Third, not one person in the entire country who is capable of working is on ‘welfare’.
‘That’s funny,” you say, “because I learned that Sweden was a ‘welfare state’ when I was in school.”
Maybe they should have spelled it; ‘Well-fare state’ or said it even more correctly; Sweden is the ‘fare-well nation’ — because they want ‘you the worker’ the number one resource in the country, to ‘fare-well’.
Very well, in fact.
Workers in Sweden are either; a) working, or b) on very temporary unemployment insurance. Say it slowly to let it sink in; In Sweden, there is no ‘other category’.
Disclaimer: People who are retired, or who are home-makers, or are on maternity/paternity leave, or those who have illness or permanent disability, aren’t classed as ‘workers’.
There is no such thing as people who’ve ‘given up’ looking for work and who have turned to other lifestyles, such as living in dumpsters.
In Sweden, if you want to work — you work!
Four, workers like it that they can choose to overpay their unemployment insurance contributions (via a special public/private company set up for that purpose) so that workers can top-up their government unemployment insurance benefits up to 99% of the full pay they received when they were employed.
For the equivalent of two cents per dollar, Swedish workers can voluntarily top-up their unemployment insurance account, to allow up to 99% of their normal salary to be paid to them as unemployment benefit payments while they’re temporarily unemployed.
It’s up to each worker how much they authourize to be automatically deducted from their paycheques. (Each equivalent of 1.6 or 1.7 cents per salary dollar earned, gets you another 10% top-up on your unemployment insurance payments)
Most people voluntarily choose to top-up their unemployment benefits to only 90 percent of their normal salary as they are no longer commuting to work, they don’t need the extra 10 percent to pay for gas or subway fare.
And unemployment insurance benefit payments automatically begin the day you are laid off. Hey, it’s your unemployment insurance — you paid into it. It’s not your fault your industry can’t keep you fully employed!
Just for the record, both the government UI system and the private UI system earn more revenue than they pay out to recipients. Both are profitable enterprises.
Five, unemployed workers can earn extra money ‘covering’ for employed people who call in sick.
I hope I’ve described things well enough that you’ve understood all of the above. Because I’m about to drop a bomb on you.
i) Let’s say you work for IKEA and you’re enjoying your layoff period with your (typical) 90-percent-of-regular-salary unemployment benefits.
ii) So, ‘Sven’ from IKEA calls in sick (skiing accident) and he will miss work for one week on Doctor’s orders.
iii) Your name is at the top of the ‘Do Call’ list because you have seniority at that IKEA location and let’s say that they call you to ‘cover’ Sven’s shifts.
iv) Not only do you continue to receive your full unemployment insurance payments while you ‘cover’ for Sven (typically equal to 90% of your full salary) you also get paid the normal hourly rate for Sven’s job description, which may be slightly more or less than your normal salary.
v) Thank you, Sven!
Many people are eager to get onto the voluntary ‘Do Call’ list for that reason. I wonder why.
(Yes, the private company that offers the top-up insurance investigates these occurrences, but fraud is rarely a problem with such a generous system. The top-up insurance company can cut you off from the top-up system for life. Which means that during your layoffs for the rest of your life, you will be forced to survive on only 66 percent of your regular salary which is what the government unemployment insurance benefit pays)
Six, workers like that while on layoff (at up to 99 percent of normal pay) you can apply to work for a non-competing industry, or take some university classes, or you can volunteer at a charitable organization.
Some people may want to broaden their horizons or they may need to amp up their résumé. Maybe they want a new job that is closer to home, or maybe they want to get into teaching.
If ‘your’ company (the one you normally work for) calls you back to work, you must return to work for ‘your’ company. But employers in Sweden are very good about simply calling the next name on the list if you’re actively enrolled in college, for example.
Seven, while you’re laid-off and receiving up to 99 percent of your normal salary, you may wish to go on a cruise to the Mediterranean for example. That’s expected.
But workers must notify their company ahead of time so that the company you normally work for doesn’t call you to ‘cover’ for Sven who has broken his ankle skiing. Again.
And look at you, suntanning in the Med, missing out on collecting ‘double pay’ just when you thought Sven had mastered the art of skiing. ‘Förbannat du, Sven!’ (Damn you, Sven!)
Life is tough when you’re a Swede.