Labor Cost Savings Research Articles

Flexible Work Scheduling as an Innovation: A Behavioral Economic Approach

A theoretical economic model is developed to explain the disparities in flexible work scheduling observed across firms, workplaces, sectors and time periods. The model incorporates features of the behavioral economics approach to explaining the adoption of workplace innovations. The supply of flextime provided by employers is determined by firms' perceived costs of enacting versus the costs incurred of not adopting it. The practice would be adopted if it is expected to yield net unit labor cost savings. While technological advances have increased firm capacity to provide them, worker demand for flexible work schedules still far exceeds the supply. In the case of cost neutrality, the extent to which the supply of flex-time falls short of worker demand for it depends on the extent to which employers either choose to or are forced to accommodate employee preferences for greater time sovereignty. The public goods property of flexible work schedules provide a strong case for subsidizing firms who adopt them as an incentive and to defray their start-up cost.

An Economic Evaluation of Four Skin Damage Prevention Regimens in Nursing Home Residents With Incontinence

To determine the cost and efficacy of 4 different regimens of incontinence-associated dermatitis (IAD) prevention in nursing home residents. A multi-site open-label quasi-experimental study was conducted in 16 nursing homes stratified by location in 1 of 4 regions of the United States and randomly selected. In 3 of the 4 regimens, a moisture barrier ointment or cream of different compositions was applied after each episode of incontinence, and in 1 regimen, a polymer-based barrier film was applied 3 times per week. All regimens used a pH-balanced moisturizing cleanser. Time and motion measures were documented for the amount of skin care products used; the number, type, and time of caregivers performing IAD prevention care; and the number and type of supplies used. Rates of incontinence in each nursing home were determined during a 3-day surveillance period. A total of 1,918 nursing home residents were screened, and 51% (n = 981) qualified for prospective surveillance of incontinence dermatitis; the majority were female (80.1%) and elderly (96% > or = 65 years old). A total of 78.6% (771/981) of the participants were incontinent of both urine and feces. Compared to the 3 regimens in which a barrier was applied after each episode of incontinence, the use of a regimen in which a barrier film was applied 3 times weekly had significantly lower costs for the barrier product, labor associated with barrier application, and total cost, which included products, labor, and supplies. There were also savings in total product (cleanser and barrier) and total labor costs. The use of a defined skin care regimen that includes a cleanser and a moisture barrier is associated with a low rate of IAD in nursing home residents who are incontinent. Use of a polymer skin barrier film 3 times weekly is effective for preventing incontinence-associated skin breakdown and can provide significant cost savings.

Privatization and Labor Cost Savings: Evidence from Health Care Services

This study examines whether privatization is associated with low public sector health care wages and with low probability of public sector employment for health care providers. Findings suggest that privatization contributes significantly to low wages of union health care providers in the public sector. Privatization also contributes to a low probability of public sector employment in this industry, especially to unionized workers. These results indicate that competition enhancing policy can promote lower labor costs even in a service sector that employs a highly skilled work force.

CEO Cash and Stock‐Based Compensation Changes, Layoff Decisions, and Shareholder Value

AbstractThe chief executive officers (CEOs) of firms announcing layoffs receive 22.8% more total pay in the subsequent year than other CEOs. The pay increases result almost entirely from increases in stock‐based compensation and are found to persist. In addition, layoff announcements are accompanied by shareholder value increases averaging $40 million to $95 million. One‐time labor cost savings from layoffs average $65 million. We conclude that CEOs receive pay increases following layoffs as rewards for past decisions and to motivate value‐enhancing decisions in the future.

Alpha/Beta liquid scintillation spectrometry in surveying Finnish groundwater samples

Natural radionuclides have been surveyed in Finnish groundwaters using alpha/beta liquid scintillation spectrometry since the late 1980s. Until now, gross alpha and gross beta have been determined in more than 11 000 samples by this technique, which has created significant savings in labor costs compared to previous gross alpha and gross beta methods based on using ZnS scintillation counters and low-background β-ray counters. The sample preparation method is now much easier and large samples series can be counted automatically. The main savings are, however, achieved by measuring the α-and β-ray spectra on a low-background liquid scintillation spectrometer, which provides valuable information on the occurrence of the long-lived α-emitting (238U and 234U, 226Ra and 210Po) or β-emitting (40K, 210Pb, and 228Ra) nuclides in water. The α-ray spectrum allows calculation of the uranium and radium contents in most groundwater samples quite accurately, and thus expensive radiochemical analyses are avoided. The concentrations of radon, gross alpha, and gross beta are determined from all drinking water samples delivered for radioactivity measurements. The gross alpha and gross beta are mainly used to screen whether the levels of long-lived nuclides exceed the limits set in the regulations.

Control Rights, Network Structure and Vertical Integration: Evidence from Regional Airlines

This paper investigates the relationship between vertical integration and the importance of control rights under incomplete contracts. Our setting is the U.S regional airline industry. Regional airlines operate flights for major carriers under the major's brand. The majors market the regionals' flights as their own. There is substantial heterogeneity in whether or not regionals are owned by the major for which they operate. Furthermore, several majors own some of their regional partners while also contracting with others. We develop a simple framework that illustrates the benefits and costs of vertical integration between a major and regional. We argue that when unforeseen disruptions create the need for schedule adjustments - as frequently occurs in the airline industry - the major will internalize the impact of the disruption on its entire network, while the regional will not. Ownership of a regional mitigates this incentive problem by giving the major rights of control over how the regional's physical assets and labor force are used. However, by bringing the regional's labor force in-house, ownership of a regional may erode some of the labor cost savings that are very reason why majors subcontract certain flights to regionals. Using data on majors' use of regionals in the second quarter of 2000, we test whether majors' choice of organizational form reflects this tradeoff between greater control and lower labor costs. Our results provide support for our analytical framework. We find that owned regionals are more likely to serve city pairs that are (1) more integrated into the major's network, where externalities not internalized by the regional will be the greatest; and (2) that owned regionals are more likely to serve city pairs with adverse weather conditions, where unforeseen schedule disruptions will be more common.

Cost-benefit Analysis of Agricultural Public Investment Supported by the Japanese Technical Cooperation

An on-farm facility consolidation (OFC) project, involving construction of irrigation ditches, drainage ditches and farm roads, was conducted as a public investment in a typical rice producing area on the Chao Phraya Delta by the Thai Government with the support of Japanese technical cooperation. Due to increased public awareness of government activities, demonstrating the effectiveness of public investment is considered extremely important in securing transparency and accountability in both countries. The purpose of this study was to apply a cost-benefit analysis to the OFC project. Empirical results showed that the total benefit was higher than total costs, even under a high social discount rate of 12% for two alternative plans, employing a conventional trapezoidal-shaped concrete lining ditch (trapezoidal ditch) and a U-shaped reinforced-concrete flume ditch (U-shaped ditch). The land-productivity effect accounted for most of the project benefits and shows that, in Thailand, an improvement of farmers' income is more critical than labor-cost savings. The renewal effect also needs to be considered, as this effect was the next highest to the land productivity effect. The trapezoidal ditch, with low initial costs in spite of high running costs and short durability in years, was superior to the U-shaped ditch with the opposite characteristics at a high social discount rate. However, a decrease in the social discount rate to less than 4% would make the U-shaped ditch superior to the trapezoidal one.JEL classification : H41, H43, H54, O22, O53, Q15

A hybrid approach for modelling and analysis of an integrated machine

For the past few years, integrated machines (i.e. cluster tools) in wafer fabrication have been widely used to achieve reductions in cycle time, contamination, operator handling, capital costs and required floor space. The integration among several processing steps can lead to savings in cycle time, labour costs and inventory, and often provides a dramatic opportunity for yield improvement by preventing contamination. However, because of its complex configurations, modelling and analysis on the activities of an integrated machine is not an easy task. In this paper, a hybrid approach is introduced in order to model and to analyse the activities of the integrated machine.

Early‐Maturity Soybean in a Late‐Maturity Environment: Economic Considerations

Over the last several years, farmers in the midsouthern USA have been planting earlier maturing soybean [Glycine max (L.) Merr.] cultivars. Maturity Group (MG) IV cultivars have become increasingly popular for reasons of drought avoidance and labor scheduling. Recently, research has been conducted to examine the agronomic characteristics and profitability of even earlier maturing cultivars. This study examines the economic considerations of MG 00 through MG IV soybean for two locations in Arkansas with different soil (silt loam vs. clayey soils) and weather conditions using both irrigated and nonirrigated production practices. Field trials were conducted over the period of 1999 to 2002. Net returns above direct and total expenses were calculated using cost of production estimates and experimental yields. Care was taken to isolate the impact of seasonal price effects as well as costs associated with irrigation, planting, and weed control as the remainder of production practices is similar across MG choice. Sensitivity analysis demonstrated that MG choice was driven mainly by yield differences and that seasonal price effects as well as changing seed cost, weed control practices, and irrigation costs had little impact. Producers may therefore choose to evaluate MG choice by following trends in yield potential. However, the analysis did not consider the farm‐specific potential for labor cost savings that may occur due to changes in the timing of labor requirements. Further, the analysis does not explicitly consider seeding rate and glyphosate tolerance effects on MG choice.

Radio‐frequency‐identification for security and media circulation in libraries

Radio frequency identification (RFID) systems have been in use in libraries for five years for book identification, for self‐checkout, for anti‐theft control, for inventory control, and for sorting and conveying of library books and AV materials. These applications can lead to significant savings in labour costs, enhance customer service, and lower book theft and can provide a constant record update of media collections. In this paper the components and technical features of a modern RFID library system are described to provide a guideline for the evaluation of different systems. A short report of three installations in Europe (one university library and two public libraries) is also provided. It is noted that an important point is that non‐proprietary systems can be used for libraries today since the new generation of RFID‐chips with the ISO standard 15693 are available. With this technology libraries are not dependent on one company for their lifeline.

Use of midlevel practitioners to achieve labor cost savings in the primary care practice of an MCO.

To estimate the savings in labor costs per primary care visit that might be realized from increased use of physician assistants (PAs) and nurse practitioners (NPs) in the primary care practices of a managed care organization (MCO). Twenty-six capitated primary care practices of a group model MCO. Data on approximately two million visits provided by 206 practitioners were extracted from computerized visit records for 1997-2000. Computerized payroll ledgers were the source of annual labor costs per practice from 1997-2000. Likelihood of a visit attended by a PA/NP versus MD was modeled using logistic regression, with practice fixed effects, by department (adult medicine, pediatrics) and year. Parameter estimates and practice fixed effects from these regressions were used to predict the proportion of PA/NP visits per practice per year given a standard case mix. Least squares regressions, with practice fixed effects, were used to estimate the association of this standardized predicted proportion of PA/NP visits with average annual practitioner and total labor costs per visit, controlling for other practice characteristics. On average, PAs/NPs attended one in three adult medicine visits and one in five pediatric medicine visits. Likelihood of a PA/NP visit was significantly higher than average among patients presenting with minor acute illness (e.g., acute pharyngitis). In adult medicine, likelihood of a PA/NP visit was lower than average among older patients. Practitioner labor costs per visit and total labor costs per visit were lower (p<.01 and p=.08, respectively) among practices with greater use of PAs/NPs, standardized for case mix. Primary care practices that used more PAs/NPs in care delivery realized lower practitioner labor costs per visit than practices that used less. Future research should investigate the cost savings and cost-effectiveness potential of delivery designs that change staffing mix and division of labor among clinical disciplines.

Radio-Frequency-Identification for Security and Media Circulation in Libraries

Abstract Radio Frequency Identification (RFID) Systems have been in use in libraries for five years for book identification, for self checkout, for anti-theft control, for inventory control, and for the sorting and conveying of library books and AV materials. These applications can lead to significant savings in labor costs, enhance customer service, lower book theft and provide a constant record update of media collections. In this paper, the technical features of a modern RFID system are described to provide a guideline for the evaluation of different systems. The most important result is that non-proprietary systems can be used for libraries today since the new generation of RFID chips with the ISO standard 15693 are available. With this technology, libraries are not dependent on one company for their lifeline.

The Huaibei power plant and its implications for the Chinese BOT market

This paper is a longitudinal case study, from 1992 to the present, of a Chinese Build-Operate-Transfer, (BOT), project, the Huaibei power plant. The Huaibei project, unlike the better known Sharejio B and C or Laibin B power plant BOT projects which were undertaken solely by foreign contractors, is one of the first projects based on the Sino-Foreign Cooperative Joint Venture model (CJV) involving largely Chinese state-owned enterprises (SOEs). For this type of CJV it is interesting to note that revenues from tax-savings and labour-cost savings become significant for the SOE organisations. By studying how the Huaibei ownership has evolved over the last 10 years and how the main CJV participants have coped with the problems which have arisen, the case not only illustrates the well-known difficulties associated with Chinese BOT projects but suggests possible ways for the project manager to overcome or mitigate these difficulties.

Server consolidation using performance modeling

Server consolidation is crucial to improving a corporation's bottom line by providing savings in hardware, software, maintenance, facility, and labor costs. In today's cost-cutting environment, consolidation efforts can provide significant savings in IT expenditures. Overall potential consolidation benefits include: lower total cost of ownership, improved service levels and availability, and reduced business risks, resulting from consistent business management and resiliency. To fully realize consolidation benefits, businesses must focus on the performance and service levels provided to users in addition to reducing unused capacity. We present a new way to analyze consolidation alternatives using performance modeling and stepwise refinement, a methodology for efficient and effective modeling.

Privatization of refuse removal and labor costs

We examine the labor-cost savings associated with privatization by comparing earnings and employment trends of public and private sector refuse workers. Findings suggest that high union earnings for workers in the public sector are a source of labor-cost savings in the refuse industry. Evidence on job changers does not indicate that earnings for this group of workers are a compensating differential. Metropolitan area employment findings suggest that municipalities are less likely to use union refuse workers in the public sector when a relatively small percentage of area residents belong to a union.

Effective medical waste management: It can be done

Background: It was noticed that a large volume of medical waste was being generated for incineration at our hospital. The 2 incinerators at our facility were unable to effectively deal with the load of waste and, therefore, were operating for extended periods of time. This caused a significant amount of soot and other emissions to be produced as pollutants into the surrounding environment, which is considered to be a real health hazard. Methods: A waste-management plan was introduced that included education, mandatory inservice training, auditing of the type and volume of waste generated by each department, and introduction of a written policy on waste management. Results: Within a few months of implementation of the waste-management plan, the amount of medical waste was reduced by more than 58%, from 609 skips/mo (2000 kg/day) in the year 1999, to 256 skips/mo (850 kg/day) in the year 2000; skips are steel containers filled with infectious waste. This reduction was maintained throughout the year 2001 and lead to a 50% reduction in total financial costs (US $17,936) with savings in fuel of US $5262, labor-cost savings of US $8990, and maintenance and spare parts savings of US $3680. Conclusions: This article discusses problems encountered in waste management in our health care facility, solutions and control measures introduced, and achievements. It also demonstrates that effective waste management can reduce health risk, save money, and protect the environment. (Am J Infect Control 2003;31:188-92.)

Radio-Frequenz-Identifikation zur Sicherung und Verbuchung von Medien in Bibliotheken

Radio Frequency Identification (RFID) Systems are used app. five years in libraries for book identification for self issuing, anti-theft control and inventory control. These applications can lead to significant savings in labour costs, enhance customer service, lower book theft and provide a constant record update of media. In this paper the technical features of a modern RFID system are described to provide a guideline for the evaluation of different systems. The important result is that today non-proprietary systems can be used for libraries since a new generation of RFID-chips with the ISO standard 15693 is available. With this technology libraries are not dependent on one company for their lifetime.

Management of Early Leaf Spot of Peanut with Pyraclostrobin as Affected by Rate and Spray Interval

Field tests were conducted in Tifton, Georgia, in 1998 to 2000 and in Plains, Georgia, in 1999 and 2000 to determine the efficacy of pyraclostrobin on early leaf spot (Cercospora arachidicola) of peanut (Arachis hypogaea). Application regimes included three rates (112, 168, and 224 g a.i./ha) of pyraclostrobin applied on 14-, 21-, and 28-day schedules. These were compared to currently-used fungicides chlorothalonil, tebuconazole, and azoxystrobin. In all tests, application of pyraclostrobin at rates of 168 g/ha or higher gave better leaf spot control than chlorothalonil applied at 1.26 kg/ha or tebuconazole applied at 227 g/ha on the same schedule. At both Plains and Tifton, plots treated four times with pyraclostrobin at 168 or 224 g/ha on a 28-day schedule had final leaf spot intensity ratings that were similar to those of standard rates of chlorothalonil or tebuconazole applied seven times on a 14-day schedule. At Tifton, all three rates of pyraclostrobin applied five times on a 21-day schedule had final leaf spot ratings lower than those of plots treated with seven applications of chlorothalonil or tebuconazole on a 14-day schedule. There was little improvement in leaf spot control with rates of pyraclostrobin higher than 168 g/ha in any test or application schedule. Fungicide effects on yield were not consistent, but in all tests, yields from plots treated with any of the three rates of pyraclostrobin were similar to or higher than yields from plots treated with 227 g/ha of tebuconazole on the same schedule. The ability to use pyraclostrobin at 21-day intervals and maintain control of early leaf spot similar to that of application of currently available fungicides at 14-day intervals represents potential savings in time, fuel, labor, and equipment costs. Accepted for publication 14 October 2002. Published 18 October 2002.

Casual Employment: A Problematic Strategy for the Registered Clubs Sector in New South Wales

Since the 1980s casual employment in Australia has been increasing rapidly, especially in service industries like hospitality. There have been a number of explanations suggested for this increase, including increased flexibility and lower costs. The casualisation of the hospitality sector would suggest that the benefits from casual employment are straightforward. However, the situation may not be so straightforward. This paper uses data from registered clubs in NSW, an important sector of the hospitality industry, to examine the extent of casual employment in the sector and the reasons for it. While the findings do indicate a high level of casual employment in the industry, it appears that club managers are divided over the benefits of a casualised workforce. Most managers believe that casual employment does increase flexibility; however, there is uncertainty amongst managers about the labour cost savings associated with casual employment. Due to these uncertainties, it appears some club managers have adopted a strategy of reducing the level of casual employment in their clubs while other club managers are pursuing a policy of increasing the level of casual employment. These contradictory intentions indicate the problematic nature of casual employment for the sector.

Privatization of Refuse Removal and Labor Costs

We examine the labor-cost savings associated with privatization by comparing earnings and employment trends of public and private sector refuse workers. Findings suggest that high union earnings for workers in the public sector are a source of labor-cost savings in the refuse industry. Evidence on job changers does not indicate that earnings for this group of workers are a compensating differential. Metropolitan area employment findings suggest that municipalities are less likely to use union refuse workers in the public sector when a relatively small percentage of area residents belong to a union.