I think your metaphor is a good one, but doesnt entirely get you where you want to go.
Insolvency is all about distributing pain. I agree that non-executive employees (including indirect employees through grants) have a high priority moral claim for work already performed and should not be clawed back. There are also practical utilitarian reasons for this rule more generally.
However, I don’t think they have this moral superpriority status for work performed after the insolvency became known. Taking away the expectation for future compensation for future work that does not benefit those with high-priority moral claims on the insolvent entity is better than the alternative of foisting more losses on depositors than absolutely necessary. Depositors have actual losses, not losses of expectancy, and there are utilitarian reasons to grant them special protections over ordinary claimants.
Moreover, most individuals funded by grant work can find alternative employment in a fairly short period of time. So they are in a much better place to mitigate loses than depositors..which is another reason I think their claims are weaker.
I think your metaphor is a good one, but doesnt entirely get you where you want to go.
Insolvency is all about distributing pain. I agree that non-executive employees (including indirect employees through grants) have a high priority moral claim for work already performed and should not be clawed back. There are also practical utilitarian reasons for this rule more generally.
However, I don’t think they have this moral superpriority status for work performed after the insolvency became known. Taking away the expectation for future compensation for future work that does not benefit those with high-priority moral claims on the insolvent entity is better than the alternative of foisting more losses on depositors than absolutely necessary. Depositors have actual losses, not losses of expectancy, and there are utilitarian reasons to grant them special protections over ordinary claimants.
Moreover, most individuals funded by grant work can find alternative employment in a fairly short period of time. So they are in a much better place to mitigate loses than depositors..which is another reason I think their claims are weaker.
Yes I think I agree on both counts.
[Edited to add: Maybe after including severance pay or equivalent? Sudden loss of income seems much worse than sudden loss of savings.]