« Rudy Giuliani Hires Crazy Person as Advisor | Main | Better Than Reporting! »
July 10, 2007
Results!
Apropos of the earlier discussion positing the wearing of neckties in the summer as a collective action problem, the European Commission is banning Eurocrats from wearing ties during the Summer. Now, rather than each individual having to wear a choking, stifling accessory they'd all be better off ditching, no individual will get to wear one. I believe this is irrefutable evidence that the EU brass read, and make policy, based off this blog. Skeptics may say the fact that this decision was reached before my post makes this an odd conclusion, but they're skeptics. That's what you'd expect them to say.
As a sort of general point on these collective action issues, I was doing a BloggingHeads with Julian Sanchez today and was struck, in talking about some minor abrogation of individual freedom or another, by how much the protection of autonomy was masquerading for opposition to regulations. Take vacation time. Libertarians don't believe businesses should be forced to offer four weeks vacation, and don't believe individuals should have to have so much vacation. To impose such a regulation, Julian said, is to unduly advantage the preference for leisure over the preference for income.
But the absence of such a regulation doesn't create some sort of leisure/income equilibrium, wherein each choice is equally available. It makes four weeks of vacation an impossibility save for the most uncommonly advantaged workers. In other words, it too chooses, and advantages, a particular preference (that of businesses to maximize worker productivity, and, in some ways, for workers to maximize income), it just does so by blocking a regulation rather than imposing one.
July 10, 2007 | Permalink
Comments
Uhhh ... the necktie ban was what got this conversation started.
I think this is a pretty good illustration of why people in leadership positions frequently don't have the information they need in order to make decisions.
Posted by: Nicholas Beaudrot | Jul 10, 2007 6:21:31 PM
You've correctly understood the modus operandi of most the so-called conservative and libertarian movements. They mix ridiculous positive 'values' they say they wnat, in with fear of teh bad - all as poses.
example: health care: you'll have to wait; quality will suffer; lack of choice; etc. /motive: make money off of sickness
To pull off their deceit, they don't mind at all torturing reality, disemboweling facts, draw and quartering logic, electrocuting fact-tellers; guillotining wavering supporters, and smothering dissent.
Posted by: JimPortlandOR | Jul 10, 2007 6:23:06 PM
Libertarians don't value actual freedom for actual people. They value the freedom to exploit lesser beings. And they, of course, are all ubermen who won't be crushed by the wheels of industry.
It's a juvenile world view, shared by people who think nothing bad can ever happen to them and that Rand is a profound thinker.
(At my law firm, we have, without ever having spoken a word about it, gradually and inexorably ceased wearing ties except for client meetings -- in DC, in summer, it's the only way to go.)
Posted by: Klein's tiny left nut | Jul 10, 2007 6:37:03 PM
Well, first, even employers that don't provide four weeks of paid vacation may allow employees to take unpaid vacation (sometimes called "personal days" or somesuch) in addition to their allocation of paid vacation days that could yield a total of four weeks or more. Another option is allowing employees to "buy" additional vacation days at some fraction of their salary. I used to work for an employer that allowed employees whose paid allocation was less than 10 days to buy additional days at 75% of their daily salary. I also question the claim that only "the most uncommonly advantaged workers" receive four weeks of paid vacation. According to this source "Four or five weeks of vacation is not unlikely for an employee who remains with a company for more than 15 years." I don't know what fraction of employees have been with their employer for 15 years or more, but in the case of large employers I suspect it's significant. The same source states that even for just 10 years of service, the average number of paid vacation days is 17.
But your claim about the absence of regulation being a "preference" is simply false anyway. If U.S. workers really wanted a different trade-off between wages and vacation time they would demand it, and the labor market would respond accordingly.
Posted by: JasonR | Jul 10, 2007 6:53:27 PM
If U.S. workers really wanted a different trade-off between wages and vacation time they would demand it, and the labor market would respond accordingly.
Shorter JasonR: [insert Econ 101 reasoning here]
Thanks, JasonR, I would have never have thought of that!
Many (but not all) employers are rather large organizations, corporations, even, with the leverage of millions of dollars in revenue who represent thousands or even millions of shareholders. They are hiring from a labor market containing many, many possible employees that they could choose to hire. If only there were some way for employees to organize themselves into some sort of organization of their own by which they could exact leverage over employers in order to demand certain benefits, rather than acting as sellers of their labor to more powerful monopsony buyers.
Posted by: Tyro | Jul 10, 2007 7:02:41 PM
Tyro,
I feel like there is something out there like that -- it's on the tip of my tongue -- nope, I can't come up with it.
Oh I know -- there is a perfect market in which workers always get what they really value. It will take care of everything. Yay!
Posted by: Klein's tiny left nut | Jul 10, 2007 7:10:13 PM
Er...nylon hosiery? Bras that poke into one's ribcage? High heels? Are there really that few women in DC?
Posted by: litbrit | Jul 10, 2007 7:22:42 PM
Tyro,
But of course employers are not monopsonies. They compete vigorously for workers, who are perfectly capable of demanding a different trade-off between wages and vacation time. I know it's hard for lefties to let go of this fantasy that the U.S. labor market consists of helpless worker drones struggling to get any scrap they can from merciless corporate overlords, but reality just isn't like that.
Posted by: JasonR | Jul 10, 2007 7:27:22 PM
They compete vigorously for workers
And on your planet, where employers never work together to keep wages low and to suppress, violently, if needed, as violently as needed, what color is the sky?
I know it's hard for lefties to let go of this fantasy that the U.S. labor market consists of helpless worker drones struggling to get any scrap they can from merciless corporate overlords, but reality just isn't like that.
This from you is comedy gold.
Posted by: NBarnes | Jul 10, 2007 7:39:57 PM
to suppress, violently, if needed, as violently as needed,/i>
Correction:
to suppress, violently, if needed, as violently as needed, worker organization
Posted by: NBarnes | Jul 10, 2007 7:42:13 PM
That's right, NBarnes. Damn those secret corporate conspiracies to keep wages low! The Truth Is Out There. The ignorant masses must be persuaded that they're being ruthlessly exploited. Spread the word, comrade.
Posted by: JasonR | Jul 10, 2007 7:48:09 PM
They compete vigorously for workers, who are perfectly capable of demanding a different trade-off between wages and vacation time.
The first doesn't really imply the other--that competition seems to be in terms of wages. Especially because if an employee started asking about trading wages for vacation time, the employer would start to question their work ethic. It's not a matter of some grand corporate conspiracy to keep us down, it's just simple sociology and culture.
Or it could be the large fixed cost benefit of health care for full time workers makes it uneconomical to drop hours without a disproportionately huge drop in wages.
Or it could be that there are network effects here--since employees work together, once employee working way fewer hours than everyone else could make everyone else's labor less efficient.
Posted by: Consumatopia | Jul 10, 2007 8:13:43 PM
Isn't red bating below you, Jason?
Also, I'm
Posted by: NBarnes | Jul 10, 2007 8:20:24 PM
Dammit. My markup-fu is weak sauce today.
Posted by: NBarnes | Jul 10, 2007 8:21:27 PM
I just don't see what particular business the government has in regulating the amount of vacation time that non-government employees get. The government should only try to regulate truly important and necessary things; it is not supposed to be trying to create a brave new utopia. It's true that the question of vacation time has very little to do with personal autonomy, but regulations needs to be defended, too, especially a law like that with very wide-reaching effects.
Posted by: Korha | Jul 10, 2007 8:47:05 PM
Yes, Jason, we've at long last achieved the dictatorship of the proletariat. That's why the average hourly wage for workers increased by 11.5 cents adjusted for inflation between 1979 and 2000, while worker productivity increased by 40%. And why the average hourly wages of high school educated workers have declined since 1979. But I'm sure these people traded wage gains for something they value more -- like being called team member.
Posted by: Klein's Tiny Left Nut | Jul 10, 2007 8:49:05 PM
The government should only try to regulate truly important and necessary things; it is not supposed to be trying to create a brave new utopia.
I guess I just don't see anything wrong with a community gathering together in the public square and passing minor regulations for the common good, so long as it doesn't seriously impinge on some individual's autonomy. American society is always going to be some compromise between markets and democracy. If it turns out that some marketplace norm doesn't really reflect individual preferences, why not regulate it to at least reflect collective preferences?
Both ballots and dollars are valid tools for the American people to pursue the good life.
Posted by: Consumatopia | Jul 10, 2007 9:33:48 PM
consum,
The first doesn't really imply the other--that competition seems to be in terms of wages.
Of course it does. The competition is in terms of the entire compensation package--wages, vacation time, 401k contributions, bonuses and whatever else may be involved.
Or it could be the large fixed cost benefit of health care for full time workers makes it uneconomical to drop hours without a disproportionately huge drop in wages.
Huh? An employer could obviously reduce workers' health care benefits to compensate for an increase in their vacation benefits. He could simply increase the employee-paid portion of the premium, for example. Or increase co-pays or deductibles. Or reduce the range of covered services.
If workers have no bargaining power over vacation benefits, why don't their awful, greedy, merciless corporate overlords just eliminate them completely?
Posted by: JasonR | Jul 10, 2007 10:27:36 PM
And Jason, workers decided that they no longer want traditional pensions so they can be called associates instead of employees.
Posted by: Klein's Tiny Left Nut | Jul 10, 2007 10:40:34 PM
why the average hourly wage for workers increased by 11.5 cents adjusted for inflation between 1979 and 2000, while worker productivity increased by 40%. And why the average hourly wages of high school educated workers have declined since 1979.
Oh, YAWN. We've heard it all before. The CPI is seriously flawed and massively understates real wage gains when the error is compounded over decades. The share of national income going to employment compensation has barely changed in decades. Yes, the wages of unskilled workers have increased less than those of skilled workers due to globalization, immigration and the differential impact of technological advances, but everyone's gotten richer. And wage comparisons alone aren't meaningful indicators of income gains anyway because they don't account for changes in taxes and benefits.
Posted by: JasonR | Jul 10, 2007 10:45:26 PM
An employer could obviously reduce workers' health care benefits to compensate for an increase in their vacation benefits. He could simply increase the employee-paid portion of the premium, for example. Or increase co-pays or deductibles. Or reduce the range of covered services.
The employer doesn't typically write the terms of the health plan themselves. Negotiating separate terms for every employee would defeat the purpose of pooling insurance purchasers through their place of employment. And it's hard to imagine what a linear interpolation from zero benefits to full coverage would be like.
If workers have no bargaining power over vacation benefits, why don't their awful, greedy, merciless corporate overlords just eliminate them completely?
The adverse selection problems of the employee's work ethic and health status, and network effects between the productivity of employees are all going to encourage everyone to settle on a narrow range of vacation allotments. Whatever that particular range ends up being probably has more to do with history, sociology and psychology than economics or rational preference.
Posted by: Consumatopia | Jul 10, 2007 10:47:59 PM
Jason,
I'm sorry you're bored by the plight of average workers. Take any number of industries - retail, meatpacking, air transit for example -- real wages have delined. This is not a question of CPI inadequacy. It is the direct result of employers putting their boots on the necks of working people and crushing them. Repeatedly.
Run off to your liberterian fantasy land now.
Posted by: Klein's Tiny Left Nut | Jul 10, 2007 10:59:41 PM
Ezra, I have to side with the libertarians on the necktie thing. I don't like people, especially, the state telling me what to wear-- I certainly don't believe it's a legitimate function of the state to mandate it. What would you do to violators? Fire them? Have fashion police issue fines?
In this case, I don't think we have a genuine market failure (ie, people are incentivized to wear ties to the common detriment of all), so much as a regulatory failure: formal dress codes require and/or strongly encourage ties. It would be better policy for them to simply ban tie-requirements from all dress codes and let the sartorial consequences take care of themselves.
This whole thing is just a subtle pitch for Obama, isn't it? :)
Posted by: Anthony Damiani | Jul 10, 2007 11:01:50 PM
This whole thing is just a subtle pitch for Obama, isn't it? :)
No, Ezra is part of a 5th column trying to drum up support and sympathy for Ahmadinejad.
Posted by: Tyro | Jul 10, 2007 11:07:21 PM
The employer doesn't typically write the terms of the health plan themselves. Negotiating separate terms for every employee would defeat the purpose of pooling insurance purchasers through their place of employment.
I'm not suggesting they could negotiate separate terms for every employee. They could obviously reduce the standard health benefits for their employees in the ways I have suggested and/or in other ways to compensate for an increase in paid vacation time.
The adverse selection problems of the employee's work ethic and health status, and network effects between the productivity of employees are all going to encourage everyone to settle on a narrow range of vacation allotments.
And the range they've settled on in the U.S. is the one that prevails here. There's nothing to stop U.S. workers bargaining for a different mix of wages, vacation time, and other the components of their compensation. If there were a serious demand for 6-week paid vacations as standard, that's what we'd have. There isn't.
Posted by: JasonR | Jul 10, 2007 11:12:16 PM
The comments to this entry are closed.
