Blood from a Stone

Last Friday’s Bureau of Labor Statistics’ (BLS) jobs report was the “one that never was.” Thanks to the U.S. governrnment shutdown, the market is flying blind in the absence of this month’s tally of those working, not working, not-working-not-looking, etc.

To fill the vacuum, let’s take a look at a chart on employee productivity and consider its implications for the jobs market in the decades ahead.

From The Economist, here’s the relationship between the number of hours an employee works and how productive she is.

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If you’ve ever worked an 80-hour week, you know intuitively what this chart proves empirically: your 11th hour of labor is shoddier than your first.

This is a concept Corporate America is yet to embrace. It still milks full-time employees for every last hour and drop of blood it can. “We’re paying your health insurance premiums after all,” they might quip.

Well, therein lies the rub.

As the implementation of Obamacare neared, a not-so-surprising yet troubling trend emerged. Companies cut employees’ hours down to just below the full-time threshold of 30 hours per week, absolving themselves of the responsibility to offer employees (now part-timers) health insurance.

When I first heard about this practice it made my skin crawl. But once I saw the chart above, I got to thinking about what a “new” job market – in which the average worker held a couple of part-time jobs – would look like. Maybe it would be better for the employee and the employer. Who knows?

For one, I wonder if working two part-time jobs, say 20 hours at an established marketing firm and 20 hours at a tech start-up, would actually help employees be more productive with their 40 hours of toil each week.

Variety – the chance to use different skill sets on different tasks – might just prevent the productivity drain we see in those doing the same job all week. Google supports a variation of this theory, offering its employees time to pursue non-essential projects of their choosing.

This arrangement could benefit both employees, who could broaden their horizons, and employers, who’d get an employee’s “best” 20 hours each week. Sure, they’d need to hire two 20-hour-per-week employees, but it’s very likely productivity could increase on a net basis.

And I’d propose, under this arrangement, the employer should be obligated to pay only 50% of the employee’s health benefits. That means a worker holding two 20-hour jobs could have full health benefits, with the cost split between his two employers.

At any rate, I think employers shouldn’t be able to avoid offering benefits simply by employing a bunch of 29-hour-a-week workers. Paying on a pro-rata basis would realign businesses’ hiring decisions with their workload needs, instead of allowing them to game the system.

At the end of the day, it’s all about productivity, not the exact number of hours we work. The new job market must find a way to prioritize the former, while escaping engrained norms related to the latter.

Adam O’Dell

Using his perfect blend of technical and fundamental analysis, Adam uncovers investment opportunities that return the maximum profit with minimum risk.