Monthly Archives: February 2015

CHANGING THE METHOD OF PAY: Survival in a Collapsing Market 3

Posted by Kathryn Schwartz on February 09, 2015
CHANGING THE METHOD OF PAY / No Comments

w6750-6
Given the huge decline in the number of establishments, changes in employment have occurred almost exclusively by plant closures. The upper panel of Table 4 shows that the fall in employment due to closures account for over 100% of the 1967-1992 and 1972-1992 falls in employment. Entry of new plants brought some jobs into the industry, whereas declines in employment within firms have made only a modest impact on total employment. The lower panel of the table shows that the firms that left the industry had lower productivity and higher shares of labor in cost than those that survived, while the new entrants had lower productivity and higher labor’s shares in 1992. www.cash-loans-for-you.com

Underlying the averages in Table 4 is a wide range of variation in labor input coefficients or productivity among establishments. Figure 1A shows the distribution of productivity in shoe firms in 1967 and in 1992 and gives sales per employee-hour worked and hourly earnings for “best practice” firms (those at the upper decile of the productivity distribution or wage distribution); “worst practice” firms (those at the bottom decile of the productivity or wage distribution), and the mean for the firms.
Continue reading…

Tags: , ,

CHANGING THE METHOD OF PAY: Survival in a Collapsing Market 2

Posted by Kathryn Schwartz on February 08, 2015
CHANGING THE METHOD OF PAY / No Comments

w6750-4
When productivity varies greatly among establishments, exit and entry of establishments becomes a critical way for the market to adjust to shocks and substitute capital for labor. When prices fall or wages rise, establishments with high labor costs or labor/output ratios are scrapped, while new establishments enter with low labor requirements. The result is a change in sectoral productivity and labor costs even when individual establishments operate with relatively fixed-labor usage coefficients. While Salter focused his analysis on how new technologies affect a sector, the model is a general one. We apply it to the shoe industry where the competitive pressure comes from increased price competition from imports rather than from new technologies.

To examine changes in the population of establishments in the shoe industry, we extracted all establishments in the LRD in SIC codes 3143 and 3144, men’s and women’s shoes. For the years ending in 2 or 7 we have a complete census. In intermediate years, we have establishments covered in the Survey of Manufacturers. Table 2 provides some detail on our data set. Column 1 shows the number of establishments in each year of the Census, when the count of establishments is relatively complete.
We are prepared to provide you with quick easy cash loans any time you feel like one. Most of our clients prefer short-term loans, but we are always ready to meet you in the middle based on what you need and how you want to repay your debt. Find out how easy it is here fully.
Continue reading…

Tags: , ,

CHANGING THE METHOD OF PAY: Survival in a Collapsing Market

Posted by Kathryn Schwartz on February 07, 2015
CHANGING THE METHOD OF PAY / No Comments


The third problem in updating a piece rate system is that there is a significant information asymmetry about the “potential level” of production. Workers learn on the job about how best to produce, and will always be ahead of the firm in knowing the potential level of production. Like tax lawyers, they find “loopholes” in the piece system faster than (the IRS) firms can correct them. Hence, when the firm updates its piece system, workers will have an incentive to “hide” their knowledge by taking leisure on the job rather than by increasing output.

The firm cannot observe leisure on the job whereas it gets full information about potential production by observing actual output. We can model by making the cost term in the utility analysis depend on cumulated units produced as well as on current units, per leaming-by-doing models. The “loophole effect” exacerbates the ratchet effect: the more rapid the firm updates its incentive system, the greater will be the tendency for workers to apply their cumulated knowledge to leisure on the job than to production. in detail
Continue reading…

Tags: , ,

CHANGING THE METHOD OF PAY: The Economic Situation in the American Shoe Industry 4

Posted by Kathryn Schwartz on February 06, 2015
CHANGING THE METHOD OF PAY / No Comments

Most of this paper is concerned with the right-hand side inequality—the reasons why Big Foot (and the rest of the American shoe industry) found time rates to be more profitable than an outmoded piece rate system. But, for a complete analysis, we must also understand why firms allow a piece rate system to become “demoralized” rather than continually updating it. By updating a piece rate system, the firm can potentially gain a larger share of quasi-rents.
Getting money for anything is not easy, especially when you have to ask other people about it. You do not have to ask us: applying for a speedy cash payday loan with speedy-payday-loans.com is all about sending your request and waiting for it to be approved. We give you the money without asking any questions.

There are three problems with updating a piece rate system.

First, it costs money to update piece rates when technology, or in our case, the style of shoes, changes. Call F the fixed cost for any change in the piece rate system. The more frequently the firm changes the number of styles workers produce, the more expensive it is to keep the piece system up to date. The cost of revising a piece system can be substantial. A quality control engineer or other plant official must time the worker to determine the appropriate rate, and the revision process may produce acrimony between workers and the firm.
Continue reading…

Tags: , ,