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Markets in everything, labor hoarding edition
"How would you like to spend more time with your family - like the next five years?" is not the kind of offer employees usually want to hear from their bosses in the depths of an economic crisis.
But BBVA, Spain's second-biggest bank, has posed that question to staff as part of its latest cost-cutting drive. It is hoping at least some of its 29,954 Spanish employees agree not to come to work for up to five years - in exchange for nearly a third of their usual salary and a guaranteed job when they return.
The story is here.
Posted by Tyler Cowen on June 3, 2009 at 03:48 PM in Economics | Permalink
Comments
I think I did this. Do they bestow a PhD?
Posted by: Andrew at Jun 3, 2009 3:55:24 PM
The human suffering of a recession would probably be limited if workers and companies could agree to wage and time reductions across-the-board instead of retaining some people full-time and laying off others entirely. It's good to see that this company is aware of that.
Posted by: Neal at Jun 3, 2009 4:03:03 PM
The problem is that wages in Spain are so low compared to the cost of living that, for most bank employees, that 1/3rd doesn't even get close to subsistence levels: Many bank employees are barely 'mileuristas', and would need to find another job immediately to remain afloat.
Posted by: hibikir at Jun 3, 2009 4:25:17 PM
So how hard is it to get another job that pays more than 2/3 of the average salary there?
Posted by: JH at Jun 3, 2009 4:50:45 PM
I'd take it if the offer of a guaranteed job in five years was put in writing, and guaranteed to the point where I would have a claim to compensation even if the company went bankrupt.
The offer lets you take a low paying service industry job for five years with the knowledge that the bank will top up your service industry salary, and you can return to banking. Without the option of returning, the resume gap could make it hard to return to your field if you left the bank.
Posted by: Ed at Jun 3, 2009 5:03:47 PM
This is similar to the deferred start dates common at law firms right now.
http://abovethelaw.com/2009/06/atl_community_section.php
Posted by: anon at Jun 3, 2009 5:52:21 PM
Most banking jobs are low wage service type jobs.
Only a very small share of bank employment, especially in Spain are high paying currency and bond traders and other executive positions.
Posted by: spencer at Jun 3, 2009 8:54:20 PM
Well, for those considering this offer, they will have to integrate the risk of being permanently unemployed in their decision. It's not the same to operate in an economy with unemployment below 10% than in Spain, quickly heading to over 20% by late 2009. Simply, nobody is hiring, so if it may be a tempting for the period "after" the recession (e.g. 2011), now they'll have to spend time with their families at home, literally.
Or maybe it's a good time to get a masters or a PhD, as the government is fully financing those for those laid off, as one of the stimulus measures.
Posted by: Alejandro Guerrero at Jun 3, 2009 9:18:27 PM
how hard is it to get another job that pays more than 2/3 of the average salary there, the most important things is goverment
should do more help to people who lost jobs . And meanwhile , goverment needs to help the people to get their another job asap.
http://www.yoytrade.com
Posted by: evian at Jun 4, 2009 2:52:59 AM
I would love to have that option. You know since starting work in 1975 I have only been laid off once and that was because they closed the clothing store that I worked in. Never had a vacation longer than 2 weeks and only a few 2 weeks, mostly i have only had one week. Some people can never get a break ---- from work.
Posted by: Floccina at Jun 4, 2009 10:06:12 AM
I'd take the offer in a second.
Posted by: Gabe at Jun 4, 2009 11:51:57 AM
"So how hard is it to get another job that pays more than 2/3 of the average salary there?"
Very, we're not quickly approaching a 20% unemployment rate, we already have it. And many people are predicting we'll reach 30%, so I wouldn't take that offer unless I already had another offer.
On top of that, most spaniards have very expensive mortgages, compared to their salary, and they have them for even 40 years, so I don't think many people can afford to quit their job for even one year unless they already have another one in line.
We'll see how many workers take it.
BTW, I know people working in that bank, and, even having huge benefits, they have been laying off many workers, because "you know, the crisis, last year our profit grew 50% and this year it has grown only 35%". I would expect for a company that GROWS to need to hire MORE people, but then i'm not an economist.
Posted by: Rafa at Jun 5, 2009 1:28:41 PM
