Numerous readers have asked me for a response to this lengthy post from Crooked Timber. Travel commitments limit me from offering anything close to a full treatment, but here are a few points:
1. Is the complaint that workers aren’t getting enough of the pie? Let’s consider giving them cash instead of workplace regulations.
2. It would be nice to see an estimate of how much the workers cared about the issues raised in this post, say in terms of willingness to pay. I would start with that number.
3. Is the complaint that workers are getting an inefficient mix of money and workplace freedoms? Maybe so, but I’ve yet to see the argument. And what if it turned out they were getting too many workplace freedoms and not enough money, say because of intra-family externalities and the intra-family tax rate on the money?
4. Is the complaint is that workers should be getting the mix of money that the authors desire to see in place, rather than what the workers themselves wish to have, taking opportunity costs into account? If so, I’m probably not on board but in any case let’s see the authors fess up to that upfront and then defend it. Let’s see how many of the workers they can convince.
5. How about a brief mention of the fact that labor-managed firms are mostly not a big success? Or that some rights can involve a notion of property? I’d like to see an empirical paper on what kinds of workplace freedoms are allowed by labor-managed firms, more or less?
6. How about a brief mention of the fact that workplace regulations, in practice, very often are used to protect insiders and restrict employment for outsiders?
I find many (most?) of the cited restrictions on labor freedom, if that is the right phrase, defensible. Consider this:
They can be fired for donating a kidney to their boss (fired by the same boss, that is), refusing to have their person and effects searched, calling the boss a “cheapskate” in a personal letter, and more.
The latter two seem obvious to me, and on the first perhaps it is better to give your kidney to a complete stranger. Become friends later on, as Virginia Postrel did with Sally Satel, to avoid putting the other person in a conflict of interest situation. (I do agree that a moral boss should have quit, but not that the firing should be legally prohibited per se.) Presenting these and other mentions as self-evidently objectionable I don’t find so compelling. I also see a big difference between “I can find a case settled like this” and “this is always the law” and on that we are left a bit at sea.
I am not comfortable with the mood affiliation of the piece. How about a simple mention of the massive magnitude of employee theft in the United States, perhaps in the context of a boss wishing to search an employee?
When I was seventeen, I had a job in the produce department of a grocery store. They made me wear a tie. They did not let me curse. Even if there was no work at the moment, I could not appear to be obviously slacking for fear of setting a bad example. They had the right to search me, including for illegal drugs. I suspect that “contract indeterminacies” gave them other rights too.
The company kept each and every one of its promises to me and they paid me on time every two weeks. The company also taught me a lot. I honor that company to this day. I also did my best to keep each and every promise to them.
What I did observe was massive employee shirking, rampant drug use including what appeared to be on the job, regular rule-breaking, and a significant level of employee theft, sometimes in cahoots with customers.
I understand full well that’s only one anecdote and only one side of the picture, and yes the company did fire vulnerable workers and quite possibly not always with just cause. Still I get uncomfortable when this other side of the story is ignored. When I hear the phrase “workplace coercion,” the first thing I think of is employee theft, estimated by the U.S. Chamber of Commerce at over $50 billion a year.
Addendum: If I ponder my workplace at GMU, I see many more employees who take advantage of the boss, perhaps by shirking, or by not teaching well, than I see instances of the bosses taking advantage of the employees. Make that two anecdotes.