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"Where does the increased employee availability come from?"Being able to structure the workday differently, such as a 7am-11am and 1pm-5pm split shift as opposed to a 9am-5pm shift may make the employee available for more productive hours (depending on the employer and requirements). This may make the difference between hiring and not hiring, or between giving 4-6 hours in a single shift and 8 hours in a split.
>"You ideally hire, and pay, only as many people as you need to get the job done."
This is true, but increasing the number of scheduling options may have an impact on how much work can get done (and the value proposition to the employer); and I am addressing marginal cases.
>" Imagine if you had to pay the upkeep for Netflix twice per month (hiring two employees for the different parts of the one split shift). Pay your monthly cost, then you go over a limit or want to watch on a second device or whatever, so you then have to pay a second time. Would you be watching things as freely? I'd wager that you wouldn't."
I think that if Netflix offered me more opportunities to consume content, I would be happy to pay for it.
My policy goal would be to make employees more productive, and increase the demand for labor, so that employers will have to pay higher wages to attract the workers, and the employers can afford to. This also has the impact of making people's work more meaningful, as their labor must be better utilized, instead of wasted on menial tasks.