Monday, April 27, 2009

Hmm ... sick days and pandemics

This strikes me as a bit troublesome:
Currently, nearly 50 percent of private-sector workers have no paid sick days. For low-income workers, the number jumps to 76 percent, and climbs to 86 percent for food service workers. These workers have to decide between the health of themselves and their co-workers, and the wages that they lose by staying home.
On one hand, I can certainly understand why firms -- particular food service firms -- don't want paid sick days. Food service operations can be seriously impacted if workers don't show up on short notice. Furthermore, it would not surprise me if low wage employees prefer higher regular wages to lower wages and sick days.

However, these statistics don't answer the key question lurking in the last sentence of the quote -- what share of sick people actually show up to work. Still, this pattern is troublesome because it is not hard to imagine that an inefficiently high number of workers choose to show up at work while sick.

Workers who work while sick impose negative externalities on their co-workers, employers, and customers. Recall, that the presence of negative externalities, suggests that an inefficiently high number of workers will work while sick. As such, discouraging workers from showing up to work sick -- particularly in occupations where there is lots of contact/interaction with other people -- is good policy. Allowing workers who are sick to stay home ans still get paid is one way to encourage this (so perhaps the government should subsidize sick days in high interaction occupations), but there may be other ways to achieve better results.

I completely agree with your arguement here. I have worked in retail management for nearly 7 years now and most recently in a blend of retail and food service. As a manager we discourage employees from coming into work sick as they wouldn't perform as well as if they were healthy and they could potentially spread the illness to coworkers and customers. But at the same time we also discourage them from calling in sick when they do become ill as it also impacts the store and customer service environment when we become short-staffed. Then on top of the employee being ill, managers are sometimes forced to reprimand employees for it as well, as if it were their fault for becoming ill when in all likelihood they caught the illness from a customer that they had come into contact with. Then, on top of that, as you stated, firms generally dont provide sick time for employees so they get hit in the wallet too. As a result I would support some sort of subsidization especially since in most cases the workers who do call in sick are already making low wages.
This is a complicated problem without a clear solution. A company could choose to offer paid sick days to its employees, but that would only partially impact the problem of employees coming to work sick. First off, there is always a limit on the number of sick days offered, but there is of course no limit on how many days an individual could be sick. Second, there are is some proportion of the population (myself included), that would rather use a paid-sick-day as a "paid-to-go-to-the-beach-and-I'm-still-gonna-come-in-to-work-when-I-do-get-sick-day." Also, the notion of government subsidization of sick days is clearly the wrong solution. That system would be abused even more as I think it would be far more difficult for some government agency to analyze my health and sickness than for the managers I as an employee come into contact with five days a week. Also, if the government is going to subsidize something health related to reduce the risks of pandemic, we can all agree they should start subsidizing hand-washing because washing your hands is the most effective preventative measure.
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