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In my last piece, I proposed a new starting point in the Shapiro/Carlson debate on how best to handle the negative effects of economic and technological progress. The debate is essentially between whether or not there should be some kind of government intervention to mitigate the effects of lost jobs and displaced workers, between whether or not we need to be protected by the state or we should allow ourselves to be blown about by the winds of market-driven change. What I proposed, inspired by Romans 12, is that we need to change the terms of the debate, recognizing workers as individuals who each have a different and necessary role to play in our society, from CEOs to seasonal fruit-pickers.
A number of questions remain. One of the most pressing is just what should be done when the local factory, coal mine, or paper mill closes. This situation has arisen over and over since the 1980s when the American auto industry entered a steep decline. All throughout the Midwest and rural areas around the country, towns have disappeared or turned into pits that the government throws billions of welfare money into.
What can be done though? If government regulations make it unprofitable to do business in central Pennsylvania, those jobs are going away one way or another. The company will either move its operations elsewhere or shutdown when there is no longer any money to keep the lights on. As stated above, Carlson’s suggested solution might include things like subsidies for the particular company, tariffs for the industry or some kind of regulation that makes it even more unprofitable to shut the plant down than keep it running. There are a host of problems with this, not the least of which is that it either incentivizes excessively risky practices based on the belief the government will step in to save a given industry or discourage others from setting up shop in the first place since they won’t be able to make their own decisions if the government decides to step in.
Shapiro’s solution would vary depending on whether we are talking about how to make it less likely for an entire business to shutdown or how to stop one particular plant from closing down. In the case of the singular plant, he would simply shrug and suggest it’s time to move to a new town and find a new job. On the industry-wide scale, he would suggest cutting taxes and regulations, making it easier earn a profit regardless of the kind of business that is being run.
Unfortunately, there could be no regulations and no taxes and the business environment will still change; new technologies will continue to develop and push out old businesses. Ask Kodak and typewriter repairmen. So how do we deal with that? Can we?
Before I begin, let me be clear – I am in no way saying that the government should mandate any of this. I believe with Reagan that the scariest words in the English language are “I’m from the government. I’m here to help.” What follows are only suggestions, things I would encourage business owners to do rather than directives to be enforced.
Those suggestions revolve around three things: relocation, training, and severance.
Relocation – Whenever possible the parent company should offer its employees jobs at another facility. Naturally, this should still be based on a given person’s qualifications. Things like seniority can be considered but shouldn’t be the overriding factor. This kind of thing can be expensive but the company benefits both by not losing an experienced worker as well as that employee likely being more productive than a new hire.
An employer can also aid his soon to be former employees buy helping them find new work. This is something that even small business owners can do. A few phone calls talking up your employees can go a long way to helping them walk out of your door and through another.
Training – Not every employee will be able to go elsewhere in the company. Sometimes, there just aren’t any openings. Also, someone might not be willing to relocate to another area of the country and prefer to find work closer to home. In either case, providing additional training and qualifications can make the difference in helping such employees get a fresh start. I grant, this could wind up being a loss for the company. Training always takes time and almost always takes money, investments that the company may well not see a return on. However, there are some points to consider. First, if a company has done its job well, plenty of training would already have been provided in order to get the most out its employees. In such a case, there would be no need for stacking up a lot of it as the shutdown date approaches. Second, seeing that kind of effort put forth by the company could well persuade an employee to stay on with the company. Third, if the company promotes such efforts effectively, it can affect public opinion, showing that the company cares for and respects the people that work for it. That kind of publicity will attract better employees and customers who would like to do business with such a company.
Severance – To be fair, many companies already offer a severance package as a matter of policy. Policies of course will differ from one company to the next but the point of the severance is always the same – to provide a financial cushion to support employees as they search for a new job. Yes, unemployment benefits are already available but they are often not enough to support a family for the weeks or months that might be necessary to find new employment.
Doing all or any of the above will certainly benefit employees. The business can also benefit in the long run as well. Employees elsewhere in the company will have a greater sense of loyalty, making them more likely to stay with the company rather than go job hunting. This keeps knowledge and experience in house and saves on the costs of training new employees. As noted above, customers and the public in general are more likely to support a business that is seen taking care of employees above and beyond minimum obligations.
Again, to be clear, I do not think any company should be required to do any of this, certainly not by the power of the state. However, I think that a business that genuinely cares about its employees should recognize an obligation to them beyond a mere paycheck. Whatever success that business has enjoyed is due in part to those employees. As such, it is only reasonable for that business to do what it can to ensure the people who helped build it can part ways with dignity and hope for what’s next.
We are currently forming the American Conservative Movement. If you are interested in learning more, we will be sending out information in a few weeks.
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