Low Status Workers Are NOT More “Exploited”

Russ Roberts once told me that when he lived in Asia he felt reluctant to hire a maid, even though they were very cheap there, and well worth the price. This makes sense to me — I suspect he felt that people would blame him for the poverty of his maid, even if he paid above market wages. It is sad that such feelings discourage beneficial trades.

I recently noted that we mainly limit work hours for low status workers, leaving doctors, lawyers, managers, financiers, artists, writers, athletes, academics, and software engineers to work crazy hours. Responses reminded me of how eager folks are to blame non-poor associates of the poor. Many said that only low status workers need protecting from employer “exploitation”:

Doctors are unlikely to be exploited the same way mine workers are. (more)

If you are a peon subject to the whims of a boss, he has little incentive to acquiesce in your desires. (more)

“White collar” … employees were considered able to drive their own bargains better than the government could bargain for them. (more)

I am a software engineer … working 13-hour shifts. … My employer has had ten or more open positions for the past five years … This means I negotiate with my employer from a position of strength. … My brother-in-law has part-time employment plowing snow. A couple days ago he worked a 13-hour shift. … If he were to object, his employer would have no trouble finding someone else to plow the same snow. So he negotiates with his employer from a position of weakness. (more)

Many people who live paycheck to paycheck are not in a position to decline additional required work – if the boss says you need to work over the weekend, and it is extremely costly for you to find a new job, you have little choice but to agree. … Skilled workers are more costly to replace, expect to be working extensive hours, and are likely to be wealthier and more capable of credibly threatening to quit. (more)

Labor markets are complex, and vary greatly by industry and location. Job design must trade task productivity, worker dislikes, and risk tolerances on both sides. Workers and employers must search for a good match of skills, flexibility, and style. Co-worker and family member preferences must be taken into account. One must anticipate changing outside options, the chance of betrayal and detection, and relationship specific investments. Negotiations vary with private info, temperament, and commitment devices. Industries and locations vary in their degree of competition and collusion among employers, and among employees.

The many ways in which labor markets can vary would seem to offer a wide scope for the regulation of such markets to vary with industry, location, and demographics. This scope is hardly infinite, however. A plausible efficiency justification for some regulation and how it varies with circumstances should come with a plausible story about how a factor like those listed above induces inefficiency, how some regulation reduces this problem, and how that inefficiency-inducing factor varies with context in a way that explains how the regulation varies with context.

Economists don’t understand everything about labor markets, but we do understand a lot, enough to make it noteworthy when we say: we economists just don’t see a plausible efficiency justification for applying work hour limits mainly to low status jobs. Yes, worker signaling and status competition can lead to excess work hours. Yes, reducing the quantity of available labor can increase wages. Yes, longer work hours tend to hurt associated family members. But these all apply similarly to high vs. low status jobs.

Yes, employees with worse outside options give in more to increased employer demands, but ex ante competition makes employers offer ex ante compensation for such an ex post advantage. Also, increased demands should mainly take the form of lower compensation, rather than distorting job details such as work hours away from their efficient values. Furthermore, since high skilled workers actually tend to stay on their jobs longer, they are less familiar with and prepared to lose a job, and being fired sends a worse signal to outsiders.

While economists don’t see a plausible efficiency rationale for work hour limits that exclude high status work, we do see a quite plausible non-efficiency rationale: people like both to show their concern about the “downtrodden,” and their dislike and defiance of big corporations. And they can signal both these things by blaming the plight of the low status on their employers, and then claiming to help by regulating employer choices about work details, such as work hours and safety.

Note that this can function as a signal of caring about low status workers even if it actually hurts them – signal observers need only think that these signalers believe that it helps. And the plausibility of this story is increased by the fact that we commonly regulate low status folks more than high status folks, supposedly to help them. For example, we and our regulations show more concern about recreational drugs (e.g., crack) favored by the low status, about alcohol availability to the low status, and about teen mothers more than 40+ moms.

Given the lack of a plausible efficiency rationale and a quite plausible non-efficiency rationale, I tentatively conclude that we mainly limit low status worker hours as a way to signal care and defiance, rather than to address a labor market inefficiency.

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  • Aaron Armitage

    Serious question: Why haven’t you done even the most minimal research?

    • lemmy caution

      I agree. Robin is being willfully ignorant.

  • Phil

    I believe that, overall, lower-paid employees DO have fewer alternatives than higher-paid employees. Why? Because of already-existing regulation that makes those jobs compensated at above-market rates.

    People feels sorry for low-paid workers, and legislation sets a minimum wage. That’s above market wage, and so employment goes down, but those lucky enough to actually get the job get paid more than they would otherwise.

    So if one of those people is fired, it’s a big problem; they’re unlikely to get another job at the same wage.

    With a large pool of competitors for the same job, the employer knows he can ask for more than originally implied — and he does. The employee is worse of than he expected to be, but still better off than if he didn’t have a job (and still better off than he would be in an unregulated market).

    But it looks unfair. So there is MORE pressure to help those workers. And the problem is compounded. It’s a vicious circle.

    In the case of the guy plowing the snow … if the employer can find someone else to do it THAT EASILY … he’s probably making more than market wage.

    Not saying that this is ALL of the reason … actually, I’d say that Robin’s hypothesis is at least half of it. But this is at least a small part of it.

    • Aaron Armitage

      The federal minimum wage was introduced in the United States in 1938.

      Were conditions in the workplace for ordinary workers better or worse before then?

      • nazgulnarsil

        yeah no confounding factors there at all. derp.

      • Aaron Armitage

        nazgulnarsil;

        The trouble is, that when an appeal to the historical record is made, in my observation it’s libertarians who always have to plead confounding factors.

  • Gene

    When I lived in SE Asia, I had ex-pat friends who refused to hire locals as maids, cooks, etc., for the reasons you describe above. More than once I listened to their local neighbors complain bitterly about how that menial job, paying wages that seemed obscenely low by Western standards but which might be as much as 4-5x what they could earn in a local factory job (for example), would have been enough to lift their entire family out of poverty. In opposition to the view the ex-pats had of their own actions, the locals described them as greedy, selfish and cruel.

  • Tyrrell McAllister

    Given the lack of a plausible efficiency rationale and a quite plausible non-efficiency rationale, I tentatively conclude that we mainly limit low status worker hours as a way to signal care and defiance, rather than to address a labor market inefficiency.

    Of course the limits are about signalling care (and you’re probably right about their signalling defiance, too). I don’t think that their proponents would deny that the limits are about care. Typical proponents wouldn’t justify their support by pointing to increasing efficiency. Instead, they would make arguments like the ones you quote, which are explicitly about protecting workers from exploitation, not about extracting greater efficiency from them.

    The point of contention is about whether this display of care actually does anything to help the cared-for. You seem to deny this, but your argument is largely theoretical. Does this argument have the same unanimous support among economists as does the argument about efficiency? That seems unlikely, since the very concept of “exploitation” seems very ill-posed.

  • http://hanson.gmu.edu Robin Hanson

    Aaron, I’ve read that and much else. I don’t see that it addresses the key questions.

    Phil, the vast majority of workers with hours limited by law earn well above minimum wage.

    Tyrrell, I’m focused on the question of why limits vary with status, not with their efficiency.

    • Phil

      Yes, I was using minimum wage as an example. For instance, if wages are sticky in recessions, you get the same effect: many people lining up for your job if you quit, because you’re being paid more than market wage.

      Therefore, the employer feels he has leverage to demand you work long hours. To the employer, this feels like equity — he’s paying you too much, so the least you can do is work longer hours. To the employee, and the legislators, it feels like blackmail — the low-status employee CAN’T quit because he’ll never find a job that good, so the employer is extorting!

      So laws are passed protecting the employee. This makes the job even MORE desirable, at least until the wages adjust. Which gives the employer even more leverage, which makes it seem like even worse blackmail, and so on.

      I guess this is testable. There should be fewer signals of caring for jobs of equal status where the consequences of quitting are lower. For instance, I’m guessing we’d care more about a $15/hr factory worker than a $15/hr car salesman, because there are lots of car sales jobs, but fewer factory jobs.

      • http://hanson.gmu.edu Robin Hanson

        The other effects you describe apply similarly to high and low status jobs.

      • Phil

        “The other effects you describe apply similarly to high and low status jobs.”

        OK. If that’s the case, I withdraw my objection.

    • Aaron Armitage

      Robin;

      You are giving an explanation for why a thing exists. That is necessarily, among other things, a historical claim. As it happens that historical claim is false.

      It was not high-status persons trying to signal their compassion who invented the idea of a limited work-day, nor, with a few exceptions like Robert Owen, were they the ones trying ti implement it. Rather it was workers (low status workers, you would say) who first demanded shorter hours and who fought for it for over a hundred years before it was grudgingly conceded to them.

      In case you’re wondering, this was emphatically not a preference for more leisure rather than more consumption: workers deserved, fought for, and won more pay for less work under better conditions.

  • http://juridicalcoherence.blogspot.com Stephen R Diamond

    As to why laws were passed limiting workers’ hours, the motivation for the British Factory Acts is telling. The health of manual workers required the state intervention. Similar problems don’t arise for most brain workers. (The fact that such problems arise in manual occupations is part of what makes them “low status.”)

    Ultimately, it comes down to a point I made previously: brain workers are best exploited by working over long time periods with frequent breaks; manual workers are best exploited using a 40-hour day baseline: beyond that, returns diminish and over long period, reverse.

    Unless you can differentiate the manual versus brain and low-status versus high-status distinctions empirically and show that the manual versus brain distinction doesn’t control, you haven’t made a case.

    • http://hanson.gmu.edu Robin Hanson

      High status athletes and musicians can be pretty physical, while low status drivers and salesfolk are rather mental. Yet work hour limits apply much more to the later than the former.

      • http://juridicalcoherence.blogspot.com Stephen R Diamond

        Driving and retail selling are physically demanding, but I agree that athletes and musicians are physically stressed. Perhaps there aren’t enough of them for many to be much concerned.

      • The Original D

        Have you ever heard of the musician’s union or the NFL players association? Even the NCAA has rules around many hours a student athlete can devote to sports practice.

  • Douglas Knight

    Rumor has it that the feds are making some large silicon valley companies pay overtime to their programmers.

  • M

    This is stylistically quite different from every other post I’ve seen here, and my guess is that you’ve lost some status by dropping your persona.

  • Psychohistorian

    “Yes, employees with worse outside options give in more to increased employer demands, but ex ante competition makes employers offer ex ante compensation for such an ex post advantage.”

    This is the crux of the matter. The claim you are making is a priori, not empirical, as far as I can tell.

    In a truly perfect market, if your boss orders you to work over the weekend and you don’t want to, you can walk out at noon, have lunch, and at 1:00 walk into an identical job at with a pay reduction of 1.3% (or whatever the value is) where you don’t have to work on the weekend. This is not real life, and economists need to prove how real life comes close to this; you can’t just assume it must. There are vast problems with information asymmetry, wage stickiness, geographic constraints, and massive fixed costs associated with changing jobs that are all assumed away by most economic theory.

    Yes, skilled laborers also suffer costs to change jobs. But a skilled laborer has to fall a very long way before they can’t afford food for their table or rent or the monthly payment on their car. There’s a point where the marginal disutility of income loss is catastrophic, and it takes a far smaller loss for a low-skill than a high-skill one in most circumstances.

    The more efficiently labor markets function, the less of a concern this is, because it is much easier for low-skill workers to obtain replacement jobs. But the reality of disparate bargaining power means that employers have significant leeway to unilaterally alter the terms of employment without having to pay much for it. The extent to which this happens and the extent to which the market solves this problem on its own are both difficult empirical questions.

    Of course, where one defines “exploited” as, “would rather quit than continue doing work on the terms offered to them,” then yes, only slaves are exploited – this is a rather trivial definition. Where exploitation is the imposition of substantial costs on and individual because that individual cannot afford the transaction costs necessary to move to a preferable alternative, well, that’s what people are really concerned about.

    • http://hanson.gmu.edu Robin Hanson

      You appear to not understand what “ex ante” means.

      • false seriousness

        You got gutted by Aaron in the first comment on this silly post because you are ignorant of the history of this topic (or you are dishonest about it) and the best you can do is drop snarky comments to other posters?

  • Khoth

    How many more times are you going to make this post without any acknowledgment that workers themselves demanded the working hour restrictions?

    • AR+

      Workers can trivially refuse excessive working hours by quitting.

      If somebody immediately steps up to do the job, working hours included, that just proves that the first worker had an unjustifiably high estimation of their own worth.

      • http://daedalus2u.blogspot.com/ daedalus2u

        By that “logic”, the same is true of all working conditions, health and safety, following OSHA rules.

        If an employer attaches a job requirement of sexual favors, and can find employees willing to do them for the agreed upon wage, that must be what the “fair market wage” is.

        The same is true of organ donation. If the employer can find employees who are willing to do it for the wage he/she offers, then it is a “fair market wage”.

      • AR+

        You hardly help your case by mentioning organ donation, which is one of the most obviously tragic examples of people letting their own sense of discomfort interfere with a market process that would otherwise save thousands of lives.

      • http://daedalus2u.blogspot.com/ daedalus2u

        Yes, I agree that I erred in using the example of coerced organ donation. A better example is this:

        http://en.wikipedia.org/wiki/A_modest_proposal

        Why shouldn’t an efficient market be used to deal with these problems too? If employers could coerce this type of enterprise from their workers, wages needed to sustain a worker and his/her family would be reduced and their living expenses subsidized by these market payments.

        Reduce employee living expenses, increase employee revenues, and supply luxury goods to the market. Clearly a win-win-win situation for all concerned. Or rather for all concerned with enough status to matter.

    • http://hanson.gmu.edu Robin Hanson

      Some workers did and do favor of work hour restrictions. This is true in the industries which have many and few restrictions.

      • The Original D

        Yes, but which group had more votes to offer?

  • Frank Adamek

    I haven’t read all the previous comments, just leaving a quick thought. If this is a repeat then ignore it.

    I don’t think this is ABOUT efficiency. The motivation certainly exists to look good by helping low-status workers “combat” high-status rich employers. But another factor is the desire to ensure a minimum quality of life. By having cheap, low-status labor be restricted in hours, the system attempts to insure that such people have time and money for other things. For work that anyone can do, the low-status workers negotiate from a position of weakness and the results of that negotiation could be a very low quality life, so regulation attempts to alter the natural result. It’s not perfect, wages still might be low enough that the low-status worker just takes on additional work, but I think this is what the regulation is trying to do. As for high-status, high-value workers, if they don’t like their hours, they at least have the option of working 40/week at lower-status work.

    Completely optimizing for group-level efficiency would leave some people in very bad situations. We might well have more resources as a society, working as an extremely efficient machine, but some people would be in the unlucky roles of parts that suffer a great deal of wear, stress, and damage before they break down and are discarded. The attempt to ensure a minimum level of quality aims for a less efficient machine, but one where each part of the machine can expect to do reasonably well.

    • http://hanson.gmu.edu Robin Hanson

      If we just want them to have a better life, wouldn’t it be more efficient to just give them money obtained from taxing others?

      • http://daedalus2u.blogspot.com/ daedalus2u

        But the high status wealthy don’t want the low status poor to have better lives. They want the low status poor to remain low status, and the easiest way to do that is to keep them poor, over worked and exploited.

      • Frank Adamek

        Yeah, maybe. I’m not an expert on economic policy. But people often do things in ways that aren’t optimal, and even if it would be overall more efficient to give them tax money, this doesn’t seem like a solution so obvious that people would necessarily choose it if they were genuinely trying to ensure good lives.

        One reason people may shy away from that solution is the idea that it removes incentives for people to be productive, or that it’s unfair. (The well-to-do could take low-status jobs, but probably they couldn’t also get the tax money.) Or maybe that it would be hard to give them just enough money where they could have good lives, but not too much, whereas limiting people to 40h/week seems to people like it hits that goal exactly.

        I think most all of those objections are at least somewhat mistaken, or at least substantially more complex. Also I’d bet that most people overlook the larger economic effects of the 40h/week restriction. But these seem to be matters of genuine, reasoning opposition to giving out tax money, even if that reasoning is flawed.

      • Aaron Armitage

        Does it occur to you that people can have several goals at once?

      • The Original D

        Perhaps, but you’re talking about political process subject to even more animal spirits than the free market.

        Why was there a riot at Haymarket Square? So the downtrodden could signal that they are in fact downtrodden?

        Signaling is the new behaviorism.

  • Lord

    These regulations only occurred once large firms started employing many. There size dictated the establishment of set policies covering their workers so these policies existed prior to their adoption, standardization, and extension by government. Government though has greater concerns than the narrow short term commercial advantages of any specific business or industry. They have concerns of their electorate being educated, of providing opportunities for advancement, of supporting social and family lives of communities, of reinforcing ethical and moral behavior. Since the existence of such policies have broad implications for localities and communities, their structure concerns them greatly. Voting on the regulations is one way of doing this. Workers councils another.

  • Vaniver

    Does “skill” describe the distinction better than “status”?

    It seems to me that factory workers are interchangeable and divisible and athletes aren’t. You can’t combine two mediocre football players to make a great football player, even though you can combine two mediocre factory workers to do the work of a great factory worker. And good football players require a prodigious investment of time to become great football players: someone who only practiced for football for 40 hours a week would have no chance in the NFL. (You could argue that it would be in the interest of athletes to limit practicing to 40 hours a week, but it would difficult to define ‘practicing for football’ to limit hours, and the desirability of such a limitation is questionable.)

    Similarly with doctors, lawyers, programmers- one great programmer working 80 hours a week can create much more value than the same programmer working for 40 hours a week and a mediocre programmer working 40 hours a week. Restricting the work hours of the great programmer results in a massive social loss (and personal loss to them, as half of their potential earnings vanishes).

    Consider the example of pilots and flight attendants. Pilots are higher status, but have the more stringent work hour restrictions. How does status explain that? Are we signaling how much more we care about pilots than flight attendants? Do we fear pilots are more likely to be exploited by airlines?

    Or is it because fatigue is the primary cause of pilot error and a major cause of plane crashes, and flight attendant fatigue doesn’t have the same risks? This is one of the few cases where work hour restrictions increase skill, and so the skill explanation suggests we should see more stringent work restrictions on pilots than flight attendants.

    • http://daedalus2u.blogspot.com/ daedalus2u

      We know the answer to that question, airlines would overwork pilots until planes crashed. Just like air traffic controllers were overworked.

      It is a question of status. In corporations, the CEO has higher status than any other worker, so the CEO can tell other workers to do stuff that will kill people as in the Massey Big Branch Mine. Mine management as supported by the Massey Board violated work rules, safety regulations, and mining laws until there was a massive explosion that killed 29 people.

      Mine workers couldn’t object because they would be fired and replaced with someone who didn’t object. Some were. They are the lucky ones because they are still alive.

      • Vaniver

        “It is a question of status.”

        I’m questioning that it’s a question of status! The “skill” explanation works for the mine example too- miners are interchangeable, and so don’t have the power to dictate terms. What I’m looking for are scenarios where skill and status make different predictions. I gave an example of a high-status job where skill suggested we should have more stringent work hour restrictions. If there were low-status jobs with high skill, Robin’s status prediction would predict more stringent work hour restrictions, whereas my skill prediction would predict less stringent work hour restrictions.

        I can’t think of any immediate examples, because ‘status’ is a subjective thing. I would suggest that artists and musicians are low-status for many people, but clearly they’re high status for others.

        (I think skill is far more parsimonious and sensible, but until we find more examples that disagree that’s mostly opinion.)

      • John

        What about docs who are still in training? When you’ve got an impacted colon, you don’t want just any schlub off the street to try and fix it, so there’s skill involved, but it’s far from glamorous.

  • http://entitledtoanopinion.wordpress.com TGGP

    Robin: “Some workers did and do favor of work hour restrictions. This is true in the industries which have many and few restrictions.”
    “Some” isn’t very informative. Folks seem to be implicitly claiming that workers industries with regulated hours are/were more supportive of restrictions than those without. It’s a plausible claim, but I haven’t seen any data.

    daedalus2u, you seem to have ignored Robin’s point when responding to him. He asked why we respond with regulation rather than redistribution for low-status/poor workers. Unless you think that work hour restrictions do nothing to prevent such workers from being “poor, over worked and exploited” (particularly the latter two), you’ve said nothing about why anyone would prefer the former response to the latter.

    • http://daedalus2u.blogspot.com/ daedalus2u

      TGGP, I actually agree with Robin, that if we did want to make the lives of low status poor workers better, taxing the rich and giving to the poor would be more “efficient” at achieving that goal. But that is not the goal of the high status, wealthy individuals who control what the laws are. Their goal is maintaining their high status and wealth which is best served by keeping low status poor workers poor and low status.

      I think the low status poor would prefer wealth redistribution, but the high status wealthy most definitely do not. As far as the high status wealthy are concerned, they already feel they are not getting enough of the wealth the economy generates. They want it all, even if that compels the low status poor to die from lack of food, shelter or health care.

      Sorry if that was not clear.

    • http://hanson.gmu.edu Robin Hanson

      “A significant number of [medical] residents (64%) and faculty (39%) believe that duty hour restrictions should be adopted.: (more)

      • http://daedalus2u.blogspot.com/ daedalus2u

        That is interesting. If you look at residency directors’ attitudes in July 2010 after specific duty hour limits were scheduled to go into effect in July 2011:

        http://www.medpagetoday.com/upload/2010/8/6/nejmp1008305.pdf

        42% strongly agree and 41% moderately agree and 8% are neutral with respect to an 80 hour per week duty limit (table 2).

        If you look at a model of the estimated costs:

        http://www.acgme-2010standards.org/pdf/dh-CostAnalysisfor2011CPRs.pdf

        The cost to society becomes zero if there is a reduction in preventable adverse events of ~2.5% (table III-6). What is interesting is that they include the non-medical costs (table II-7) which exceeds the medical cost to hospitals indicating that patients and society benefit a lot more from prevented adverse effects than do hospitals.

        That non-alignment of benefits throws up a red flag (to me), indicating externalities that the hospital is not accounting for. The economic optimum for hospitals is more errors than is the societal optimum. That is a something that a market cannot correct unless that externality (by the hospital) is accounted for. This is a pretty clear case where limiting hours worked to reduce mistakes via regulation benefits workers and society where market forces can’t. The only other way to deal with it is via regulation.

    • http://entitledtoanopinion.wordpress.com TGGP

      daedalus2u ,you are doing the same thing again. You reiterate your claim that high status people don’t want to be taxed (although in the U.S taxation is relatively progressive, despite spending being less progressive than western europe). But you haven’t examined why the people who decide laws favor work hour restrictions. Earlier you said they wanted low status workers to be overworked/exploited, which is just the claim being examined here.

      Robin, I have also heard many folks in the medical field saying work hours should be more restricted (though this is not based on worker exploitation but poor performance in hospitals). Ideally we’d like a survey question given to members of various occupations asking if their job should have a limit on work hours, and we could then compare high vs low status occupations.

      • http://daedalus2u.blogspot.com/ daedalus2u

        TGGP, that is simply wrong. The “marginal” tax rate on wages may be 35%, but the very wealthy mostly don’t get income from wages. It is mostly from capital gains and other income that is taxed at lower rates.

        http://krugman.blogs.nytimes.com/2011/09/21/billionaires-and-secretaries/

        FICA is only paid by those earning wages, and then only on the first $106k of income. The “employer” fraction is also (effectively) paid by the employee because the employer considers it part of the cost of having the employee.

        FICA is highly regressive and Social Security is still running a surplus. That Social Security surplus was one of the rationales for the Bush tax cuts which went mostly to the wealthy who didn’t pay into Social Security.

        Buffet said he paid a lower tax rate than his secretary. Are you calling him a liar?

      • http://entitledtoanopinion.wordpress.com TGGP

        I don’t know the particular details of Buffet’s tax situation, but you are right that he gets a huge portion of his income due to investments, which are taxed at a lower rate. I said that U.S taxation is relatively progressive, and I stick by that statement. Capital is taxed at low rates all around the world because capital is mobile. U.S tax rates on capital are actually relatively high, an indictment of our political system. In Europe tax revenue largely comes from V.A.T, a sales tax which most Americans would regard as regressive. “The awkward truth is that the U.S. income tax system is anomalous not because it taxes the rich lightly but because it taxes everybody else lightly.” The way in which other countries are “progressive” relative to America is not on the taxation side, but the spending side. America spends a much larger amount on defense. And our welfare state is geared more for the elderly than the poor. Like Sumner, Yglesias and Robert Frank, I want to switch from taxing income (including investments) to just a consumption tax (since an MR=MC tax seems out of the question). I don’t give a damn for progressivity, but a progressive consumption tax would be a step in the right direction.

        Finally, from Nick Rowe: Are the rich capitalists? Are capitalists rich?

    • The Original D

      Re: redistribution vs. regulation. Both are policy mechanisms. Sometimes the political princess yields a less than optimal choice. Not surprising when you consider that our Constituion allows a minority senators from states with low population to block legislation.

      But to say “you’re using the wrong mechanism” is different than to say “your motives are bogus.”

  • Lord

    This is a numbers game. If there never were any large firms we would probably have never seen or had need of these laws as everyone would have found some arrangement to their liking. Status operates inversely to numbers. Any regulation operating on large numbers is by definition operating on the low status because it is their numbers that make them low status.

  • http://larrysiegel.org Larry Siegel

    @daedalus2u
    >But the high status wealthy don’t want the low status poor to have better lives. They want the low status poor to remain low status, and the easiest way to do that is to keep them poor, over worked and exploited.

    Please try to refrain from saying what I want. You don’t know me.

    • Aaron Armitage

      You personally may be a special and unique snowflake among your peers. That doesn’t much matter. His generalization is still among the most robustly true ones to be found.

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  • Doc Merlin

    Its a response that evolved as a way to punish low status people for being low status?
    Kind of like how rich people will attack and fight to prevent Wall-marts from forming in poor neighborhoods, even though that would help the poor, immensely. We prevent the poor from being able to compete with us socially, by limiting them.

    I don’t think this is a conscious response but one where the social memes evolved.

  • MBL

    Pull your head out of your ass and point it at a Goddamned history of the labor movement. Don’t post again until you do.

    Your ability to toss around Latin doesn’t mean you’re not stupid. People DIED for the forty hour work week. Just like they died for a sixty hour week and a fifty hour week before that.

    You don’t appear to be aware of this. Stop writing about employment issues until you are.

    • Doc Merlin

      MBL, you are the one who needs to read on the history of labor. Robin is correct. The 40 hour week actually arose as a way to keep certain workers (mainly immigrants) from outcompeting others.
      The Lochner court case is a good read. There you see the native born bakers lobbying for a 40 hour week so they can make more money than the immigrant bakers which wanted to work a 60 hour week. The immigrants had less capital and thus to make the same money needed more time, and the native-born had more capital, but were being outcompeted by the immigrants.

      • Doc Merlin

        This should go here:
        Sorry, the native born lobbied for a 60 hour week, and the immigrant-owned bakery had immigrants working an 80 hour week.

      • Aaron Armitage

        Immigrant workers were actually at the forefront of the labor movement.

  • Doc Merlin

    Sorry, the native born lobbied for a 60 hour week, and the immigrant-owned bakery had immigrants working an 80 hour week.

  • http://www.thisisjeffwong.com Jeff Wong

    This is an Econ 101 argument against minimum wage and various other worker protections.

    You are basically arguing that this bad policy exists because of people as silly as your friend.

    Why not go out and ask people working in these jobs what they think of the minimum wage and working hour norms?

    And if you’re going to do a bunch of inferential reasoning about having these things is bad, why not explore the negative implications as well?

  • http://corvid.us jerry kelly

    Listen you callus free blogger shit…working with concrete (my world) people get tired at different points in the process.As people get tired they literally can’t hold up their end whether they want to or not.The result is co-workers get hurt.I compete against illegal crews hired by some born-again designer/fabricator all the time.The longer the hours they work the quality of the work goes down. Us…we work efficiently and seem to get it done without turning the job site into an Upton Sinclair novel….Did i mention I’d like to punch you?????

  • Michael

    If you want to know why historians don’t respect economists, and why we think that you aren’t scientists in any way, all you need to do is read your own ahistorical bullshit.

  • saucy

    i believe i now understand the argument you’re really making.

    the argument is “in an economic model that assumes perfect efficiency, restrictions on working hours wouldn’t be necessary, so why are they?”

    you’re then refusing to accept all the plausible explanations because they don’t apply in a perfectly efficient model.

    which makes me want to ask: why do economists find this kind of conversation interesting? as a poster up-thread pointed out, you don’t have to walk very far to find an example of a negative externality that makes the market for labor imperfect. overworked factory workers dropping dead would be another example — what would the appropriate level of “ex ante” compensation be for the risk that you might be worked to death? would the average worker correctly compute the societal cost as well as the cost to himself and his family?

    it’s simply not interesting to take such an impoverished model and scratch your head when it doesn’t explain reality.

    • http://daedalus2u.blogspot.com/ daedalus2u

      I think you misunderstand. The point isn’t to be interesting, the point is to signal. This article signals to employers that there is a “perfect” economic model where compelling workers to work unlimited hours under employer determined conditions is not exploitive because in a “perfect” economy those workers are all fairly compensated, and that there is an economist willing to say so.

      Never mind that the real world economy is no where close to the kind of “perfection” required.

      Employers think an economy where they can compel workers to work unlimited hours at pay and under conditions that employers determine is pretty close to “perfect”, so it must be “fair”, even if it is illegal.

      Maybe this article is angling to supply paid for expert testimony that the working conditions at the Big Branch Mine were economically “fair” even if they were dangerous, health damaging and illegal? There are a number of wealthy, high status individuals who might be under considerable legal jeopardy for the deaths that their actions caused. Prison sentences they receive might be reduced by testimony that the working conditions they imposed were economically “fair” as judged by a “neutral” “expert” hired by the defense.

      My guess is that this article is written not to generate interest, but to generate something else.

  • saucy

    … or to state it empirically:

    Before labor markets were regulated, it was routine for low-status workers to be killed on the job. It remains routine in third-world countries where those regulations don’t exist. In countries where those regulations do exist, that simply does not happen to a statistically significant degree. (Doctors, lawyers and software engineers may be “worked to death” in a metaphoric or indirect sense where some of them suffer stress-correlated illnesses, but this is rare and difficult to pinpoint compared to people literally dropping dead from accident or overwork.)

    Given that, the easy question to pose is: would you rather live in a country with a labor market that Robin Hanson’s model of economics tells him is efficient, or would you rather live in a country where people aren’t routinely worked to death?

    Is that really as difficult a question to answer as you’re making it out to be?

  • Joe Vecchio

    Once more a privileged, well-paid white male argues for the freedom for people to be indentured servants. it may not be what you want but it will be what you get if you allow corporations, whose only goal is to maximize profit, to dictate terms.

    The arguments you use are only true if you believe the only reason for living is the acquisition and retention of wealth, and if you want to place an economic value on human life. The United States was founded in great part on the principles of life, liberty, and the pursuit of happiness, I fail to see how anyone, particularly those who aren’t capable of “status” jobs, can have either if they are forced to work themselves to death.

  • tde

    “Low Status Workers Are NOT More “Exploited””

    There is such a universe of dumbassery in that headline that there’s no need to read further.

    The fact that such ignorance is taken seriously is a sad commentary on the state of discourse in this country.

  • ???

    Robin: “If we just want them to have a better life, wouldn’t it be more efficient to just give them money obtained from taxing others?”

    Money is not time, though, which I think is the real issue here. The arguments for economic efficiency by removing work hour limits you reference does not take into account the productivity levels of an employee. I’ve seen some studies (which I will reference later) indicate that productivity drops after a certain number of hours. Once productivity drops, the efficiency supposedly gained by removing work hour limits is cancelled out, or if there is a gain, it’s not enough to be cost-effective. And that’s not mentioning the harm imposed on someone’s body from overwork.

    The best example of this comes from the gaming industry, where some the great developers retire incredibly early (around 50) not because they are well off, but because they can’t afford to keep working the 9-12 hour workdays that has become the norm. This is especially the case during “crunch time,” also known as “the death march:” 10-14 hour workdays, 6-7 days per week. And yet so many games come out too early, and too buggy, because of set release dates.

  • LeoMarius

    If you are working 13 hour days, you seem to have little negotiation power. Doctors, lawyers and techies have become wage slaves like everyone else.

    What kind of life is a 70+ hour work week? Do you hate your kids or your wife, or do you not even have time to find a spouse?

    My guess is that you work these hours because you can’t afford your mortgage, student loans and health insurance without your job. If you are so marketable, find someone to pay you enough to support your lifestyle 9-5.

  • magicdufflepud

    1. What’s the ex ante compensation? Any example is fine.

    2. Why isn’t it possible that low-status workers (as a group) are less capable than are high-status workers of assessing the value of compensation package relative to the potential hours worked?

    Essentially, I think economists too easily dismiss the possibility that some people, or an entire class of people, might be incapable of making utility-maximizing decisions. It’s possible then, that high status folks aren’t signalling that they care–they actually do care.

  • http://shagbark.livejournal.com Phil Goetz

    Just FYI, only economists use the phrases “ex ante” and “ex post”.

  • Pingback: Overcoming Bias : Regulatory Differences

  • Drewfus

    Robin, what is the correlation between work hour limits in various industries, and the turnover rates in those industries? If there is a significant positive correlation, this might suggest that the purpose of work hour limits is to keep turnover rates high, and therefore wages relatively low. That is, the regulations are there to define status outcomes, not to alleviate their affects.

    That folks can successfully argue that the regulations are for the benefit of workers rather than employers, would be why a situation like this can occur. That is to say, Liberals are not defending the interests they think they are.

  • Abel

    As for why the laws restricting working hours were enacted those reasons can be found in history books (it low status worker hours), and the standard telling is that the laws came from pressure of movements composed mostly of working-class people.

    As for reasons why those laws remain today in places like the US, other than the natural inertia for the law to remain the same as long as no one is bothered by it, I would point out to the following:

    – People that work a lot of hours in high status professions are in many cases considered to be working that amount of hours because they genuinely like the activity from which they get their salary. A law restricting the number of hours they can work would probably go against their wishes. People working in low status professions are usually considered to be working there just to make ends meet. The absence of a law restricting the number of hours they can work would would probably make them either work more hours doing something they don’t like, or have no job at all.

    – For people that work in professions with long hours and a lot of money, it is good if other professions have shorter hours and lower wages as opposite to similar hours and lower wages, as it offers a possible tradeoff in case more free time is desired.

    • Abel

      “(it low status worker hours)” should read “(as other commenters have pointed out)”.

  • Keith

    “Russ Roberts once told me that when he lived in Asia he felt reluctant to hire a maid”

    Are you sure? According to this EconTalk podcast (transcript available), it was a student of his who had the maid experience.
    http://www.econtalk.org/archives/2011/06/munger_on_excha.html

    • Robin Hanson

      I could have misremembered.