These are bleak days for employees throughout most of the auto industry, as layoffs and terminations are announced almost daily at the Big Three and in the related auto parts sector. Meanwhile, Toyota and Honda are purging the army of “temporary workers”, while so far avoiding layoffs of their “permanent employees”. The temporary workers at these companies have little job security and fewer benefits than the permanent employees and, in essence, are funding the job security of the permanent employees.
What do you think of that employment model from the perspective of society and the economy? Its a question of how best to share wealth in a society in difficult times. Is it better to have 500 people working full-time, or 1000 people working part-time, or some combination of both? The same basic policy issues arise in the debates about whether the state should ban or limit overtime, since employers who use a lot of overtime are also less likely to hire new workers. Overtime is good for the existing employees, but might not help people looking for work. Same issue with respect to the reduced work week. Is it better to have more people working 4 days per week, or less people working 5 days per week? This is a debate France has been battling with in recent years.
So, is Toyota helping the economy by using a large contingent workforce as a buffer for the permanent employees, or harming it?
