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Strategies & Market Trends : New US Economy Policy
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To: Arthur Tang who wrote (13)3/10/1997 12:27:00 PM
From: Arthur Tang   of 435
 
The new economy and flexible labor structure.

Over the last ten year, many restructuring happened. The major shift has been labor structure. Many company in order to survive, has turn to temporary outsourcing of skilled labor. The underlying benefits has been the avoidance of fringe benefit responsibility. Labor rates went up to accommodate the loss of fringe benefits.

Now, most distribution companies are in favour of hiring more part time employees and use computer programs to schedule employee time by projects or busy periods. This concept of flexible labor structure created a new job growth prospect and has been fueling the new economy. Jobs are plenty and choice of jobs gives the population new found freedom, and buying power. Wages during weekends can be 1.5 to 2.0 times regular pay. $6/hr being the entry level pay is universal except some sharpies tried to force minimum wages $4.75/hr on kids because it is allowed by law.

Even GM can be more efficient when assembly lines can fill orders in part of a shift. They have been extended by overtime in the past; now they can call in part time employees to fill the needs.

What will happen to the Wall street market? Flexible labor structure can squeeze out another 1-2% of cost savings (earnings) on revenue. Yet, the extra pay per hour helped the economy grow by a few percentages, too.

Irrational? No! Practical? Yes! Health care forgotten? No, food choices has been emphasized so that fundamental preventive health care by nutrition and rest (part time work) will be with us for quite some time to come.
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