Plaidneck

Tag: Canada (page 2 of 4)

The fallacy of just cutting labour

I worked in the MUSH sector for my entire career. I was in the infrastructure management, construction and maintenance field. We were constantly refining our requirement for work and our methods of performing that work.

During a 40 year career, various management philosophies came and went. They were usually just variations on the basic theme. What should be done and how to do it.

What work should be done is easy.

Got to do – that which is legislated

Aught to do – those tasks which when done will save/preserve/make safer

Want to do – those tasks which are nice to do but truly don’t add value.

Defining value wasn’t always easy but most often we could figure out if the task was truly worth while. I was lucky and had a staff who were knowledgeable and committed.

With this familiarity of our work and using the 80/20 rule (80% of the value of a task is contained in 20% of the items) allowed a very small management group to quickly review many items within a reasonable time.

We then considered on how to do the work. The common cry is “cut labour”. This thrust comes from a misguided method of accounting where labour is listed as a line item (Once when discussing how to do a task, I said point blank, you can cut in-house labour, but I’ll just hire someone. The response was you can’t do that. I countered that I’d hire a piece of equipment with operator. The accountant said that was OK because there would be a hard invoice. There still would be labour; just not in-house and not necessarily lower cost labour.)

Labour is just one component of costs. Identifying a reasonable “work” to count, calculating a cost to fully perform the work gives a better view of things.

Think about a task and cost it with in-house vs out-sourced labour. You’ll probably find that one or the other will be slightly less expensive.

But, that was the wrong question. You should first have asked did we have to do that task. By tinkering with the labour (because it’s a visible line item in someone’s books) rather than deciding if the task had to be done, you are just nickle and dimeing not saving. By eliminating an entire task, you’d save the entire cost. If the task has to be done; do it.

During elections, we are often promised that the civil service (ie labour) will be cut. We are not told what tasks are to be eliminated.

A couple of decades ago, the Ministry of Transportation stopped doing in-house maintenance. Many (if not most) of the eliminated employees just turned around and went to work for the private contractors who contracted for the work (often at quite decent salaries and wages because of the competition for experienced personnel). Was there a savings? No, the provincial auditor general investigated and found no savings. The tasks performed were necessary so the change just tinkered with costs.

However, I do believe that it can be necessary to shake up established organizations. If management gets complacent and doesn’t continuously monitor it’s tasks; if labour gets complacent (often because they have stood up for gold bricks in front of far too lenient quasi-courts) and loses interest in performance, corrections must be made.

So, when someone says they will cut labour, ask the question – truly cut the labour (ie stop doing the task) or just move the labour from one organization to another. We’ve seen that this shift often isn’t any more cost effective.

The Plaidneck

Driving in Cottage Country

My family has a longstanding property in one of Ontario’s cottage countries. We lived on the edge of this now “hot” area all my growing up years and are intimately familiar with the area and its roads. I left to move back to my family’s original Canadian settlement area. We now come back home to cottage country. On a recent trip back to what is now the cottage I observed something about cottage country drivers.

There are three major types and two are anoying.

First for some context:
a. I like to drive
b. most country roads especially the paved ones are great for driving.
c. The design for most paved curves on rural ontario roads is to be safe in wet weather right at the speed limit.
d. They’re fun to drive when pushing the speed limit.

e. I drive a standard transmission sedan and sit at a normal height from the ground.
f. The vehicle I drive has a good suspension and is made for driving.
g. I made my living managing a rural road system. I never had a four wheel drive, a SUV, a pickup. I got around in all weather just fine. Southern Ontario (south of the North Bay/Sudbury line) has a great rural road system, also
h. I used to (motor) cycle and love curves.

There are two type of drivers in cottage country.
1. The locals
a. Locals seem to like to drive trucks; a left over from when a lot of them farmed and those who didn’t were small business types who needed a truck. Pick ups abound,
i. Some with caps
ii. Some with equipment racks
iii. Some fancied up
iv. Some just a plane jane slightly rusted work truck (Once in a chat with a local while waiting for children to exit an event, I chatted with a local who knew a good friend of mine. Unfortunately it forgot his name, but remembered he had a beard and a rusting pick up. When I tried to recall him to my friend, his reply was Hell, they all drive rusty pickups!).

b. Locals drive slowly because they’re at home and not trying to get somewhere. They often don’t signal because most of the year every one else knows where they’re going.

2. The tourist
a. Tourists like to drive SUVs or their cousin the CUV (Cross-over Utility Vehicle if they’ve been fooled into believing that they’re now being green)
i. Tourist drivers think they’re in the boonies (not many tourists actually make it to the boonies) so come armed with a SUV
ii. The SUV is often a great honking four wheel drive
iii. Especially if the vehicle’s a CUV there’s often a Tulle box and/or a kayak or bicycle carrier mounted on luggage rails.

b. Tourist drive slow because they’re semi lost. They’re trying to get somewhere they don’t really know and afraid they’ll miss the turn.

It’s a pain being in cottage country roads behind vehicles that obstruct your view and are moving so slow that they take all the fun out of driving.
The Plaidneck

Growth and Demographics

Growth and Demographics

I’ve wondered why our gurus all tout growth. We are told that:
• we can borrow to defer paying for things now because growth will allow us to pay the interest plus the principal and maybe have something left in the future.
• we must grow or we are failing, and that
• without growth there is no prosperity.

Because of our “gurus” we assume:
• that savings will always grow.
• that there will be enough increases to pay for today’s debts.
• what was before (during a long population growth era) will always be even though things aren’t necessarily growing.
• we can keep growing

Is that necessarily so?

My son (www.keepcalm.ca) recognized that our fascination with growth was often based on the run up of population cause by the post war baby boom. He was one of those small classes in school that followed a run of large classes. He noticed the difference, took a look at those following him and recognized that growth wasn’t necessarily going to continue. He reasoned that demographics should be more of the discussion than it appeared to be. He advocates a minimalist approach and it looks like he was correct.

Without growth in population, why should our economic models be based solely on growth? Maybe we should develop an economic model that doesn’t rely on growth (and maybe the “boomers” should be required to pay much more of their own way).

Is constant growth really possible? A couple of events seemed to that it is not.

1. Fiction, but thought provoking: There was a Star Trek episode (I think the Next Generation) where the place being visited had recognized that slavishly advocating growth was pushing them towards disaster. Their solution was to keep up on things for well being (medicine etc.) but return to a more pastoral and static economy. They didn’t emphasize growth. Might have been a utopian slant but it was definitely something to think about.

2. Experimentation reported on a CBC radio show (Quirks and Quarks I believe). An experiment where a single cell organism was placed in a closed test tube of food. The organism(s) ate and divided once a minute. The amount of food was designed to be fully consumed in one hour. There were some questions – If 11:00 is the start of the experiment,
a. how much food would be left in 11:55 minutes? Something like 97%
b. how much food would be left at 11:59. 50%

But this is 50% growth. Wouldn’t slow growth be OK? What if things grow at 1% per year? That should be OK?

The unfortunate problem with growth is it isn’t straight line. It’s growth on growth. If the world’s population grows at only 1% per year:
• there will be 50% more of us (10.5 billion) in 2050 and
• more twice as much of us (15 billion) in 2085.

Finally, we seem to look at Canada as a vast empty land. True, but how much of what is empty is capable of supporting people? To support people, they have to be fed. Unfortunately we are filling up our farmland with housing and the non arable areas are left sparsely populated. Some of us rue the loss of species but we continue to invade and thus adversely alter their habitat. Natural calamities are much more disastrous because more of us are in their path.

Maybe our low birth rate and lack of population growth is really the right way to go.
Maybe it is time to make a concerted effort to develop an economy that doesn’t rely on “growth”

The Plaidneck

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