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.
"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/arc...
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.
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.
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.
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?
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."
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.
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?
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.
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.
I could have misremembered.
"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/arc...
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.
"(it low status worker hours)" should read "(as other commenters have pointed out)".
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.
I agree. Robin is being willfully ignorant.
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.
Just FYI, only economists use the phrases "ex ante" and "ex post".
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?
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."
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.
Yes, but which group had more votes to offer?
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.
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?
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.
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.