’ I’ve also been told point-blank to my face, ‘We don’t hire the unemployed.’

[FreeJoe]

40. Aside from the obvious math error,

life isn't that simple.

1) There is a lot of overhead in an employee. When I hire a full time employee, I have to put them in an office. I have to train them. I have to provide benefits to them. All of these overhead costs typically cost as much or more as their salary and most of them are the same cost regardless of how many hours the employee works. Because of that, if I worked them 13.8% less, I would save only about 6-7% of their costs.

2) At least where I work, productivity increases more than linearly with hours worked. If someone works 13.8% less, I will lose more than 13.8% in productivity. I know this because we have an unofficial reduced time track for people that need shorter work schedules. They typically work four eight hours days a week. It is a popular option with moms and employees easing into retirement. Some of the difference in productivity per hour is an illusion because these people put in proportionally fewer overtime hours, but some also comes from the fixed costs of having a job.

3) The pool of people with jobs and without jobs are not the same. While there are definitely people with tremendous human capital out of work and some dreadful employees, the median employed person is going to have more valuable skills than the median unemployed person or person not in the labor force. If you take a percentage of a job from someone with higher skills and give it to a person with lower skills, you will lose productivity.