Purging the competent
This Slate article asks why automotive companies, in particular Ford, should offer big cash incentives to workers they want to fire.
Why would the manufacturer offer these incentives? If the workers don't take the buyouts, they'll still get paid. Under the union contract, if the company has to close a plant, anyone who worked there is eligible to keep getting wages under one of two programs.
The article ought to ask "what kind of automotive worker would choose to take the cash offer?" The answer, of course, is those whose opportunity costs are low, namely, those who can get cash from Ford and are confident that they can get a new, well paid job somewhere else. When I've seen similar programs rolled out elsewhere, we called this group "the competent".
Who should not take the offer and hang on to their current job? Why, those whose opportunity costs are high, namely those who could not find another employer based on the skill set they have now and the skill set they can reasonably develop over time, at their current wage. We used to call this group "the overpaid"...
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