The Once and Future Worker by Oren Cass

Author:Oren Cass
Language: eng
Format: epub
Publisher: Encounter Books
Published: 2018-11-16T16:00:00+00:00

CHAPTER 8

MORE PERFECT UNIONS

Early in season 1 of Friends, Rachel Green brandishes her first-ever paycheck to the gang, rips open the envelope, and then puzzles, “Who’s FICA? Why’s he getting all my money?”1 If only she knew the half of it.

For every dollar deducted from her check by the Federal Insurance Contributions Act (which collects the “payroll taxes” for Social Security and Medicare), her boss at the coffee shop had to pay one to the government as well. And employing her carried countless other costs, which, depending on Central Perk’s policies, might include vacation days and paid leave, health and disability insurance, and legally mandated contributions to unemployment programs and worker’s compensation funds. By 2017, wages accounted for just two-thirds of the direct cost of employing an American worker.2

Government rules both increase the costs and reduce the value of an employee. Employers try to hold schedules below forty hours per week to avoid paying time-and-a-half or below thirty to avoid the mandates of the Affordable Care Act. The Occupational Safety and Health Administration (OSHA) ensures compliance with lifesaving procedures but also requires that stairrail systems serving as handrails be “not more than 37 inches nor less than 36 inches from the upper surface of the stairrail system to the surface of the tread, in line with the face of the riser at the forward edge of the tread.”3 The Americans with Disabilities Act facilitates broader inclusion in the workforce but also expensive lawsuits over accommodation for a bridge maintainer’s fear of heights and a teacher’s fear of children.4

Nearly everyone supports the broad objectives underlying these policies, and that is the ground on which they are often debated: isn’t a forty-hour workweek a good thing? Aren’t you for workplace safety? Do you support discrimination? Lost in this kind of framing are the unavoidable trade-offs. After all, we could eliminate workplace injuries entirely if every worker were accompanied at all times by a licensed personal-safety supervisor. But no one considers that a reasonable approach.

More protections mean higher costs for employers, and that usually means lower wages and fewer jobs for workers. Each new requirement inserts another small wedge between how much the employer must spend to have the work done and how much the employee can earn. Each makes relatively more attractive the alternatives of automating the work, doing it overseas, or abandoning it entirely. From 2005 to 2015, the United States added almost 9 million of the independent-contractor, on-call, and temporary jobs that enable employers to avoid various regulatory burdens, while traditional employment did not grow at all.5 Yet there remain times when employment regulation makes good sense. If an employer stops providing eye protection to machinists for the sake of raising wages by a few cents, that is no more sensible than the licensed-personal-safety-supervisor plan.

A balance must be struck; the critical question is, who decides? Federal regulators increasingly dictate the terms and conditions of the workplace, but they are badly handicapped in carrying this out in two respects. First, they do not know the preferences of those for whom they are dictating.

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