Labor regulations and unintended consequences

There has been a lot of comment over the past month or so about the scheduling issues faced by part-time workers. Steven Greenhouse wrote in the New York Times:

As more workers find their lives upended and their paychecks reduced by ever-changing, on-call schedules, government officials are trying to put limits on the harshest of those scheduling practices. . . .

In a referendum last year, voters in SeaTac, Wash. — the community near Seattle that also passed the nation’s highest minimum wage, $15 an hour for some workers — approved a measure that bars employers from hiring additional part-time workers if any of their existing part-timers want more hours. The move was a response to complaints from workers that they were not scheduled for enough hours to support their families. Some San Francisco lawmakers are seeking to enact a similar regulation.

I thought that Virginia Postrel, writing in Bloomberg View, made an interesting point:

Regardless of economic conditions, the deal between employers and workers has two components: money, including any benefits, and working conditions, including how well hours match worker preferences. The weak job market affects the total value of that package, not the mix between the two parts.

When an employer demands unpredictable work hours, it’s making the deal worse. It can get away with a worse deal because of the bad economy, but what about the mix? If unreliable schedules are so burdensome, why don’t workers switch to jobs with better schedules but lower pay? Why don’t competitors offer such options?

One possibility is that, despite the burdens, workers actually prefer more money to predictable hours. Some surely do. But others clearly don’t. For people who want a second job, not knowing their working hours isn’t just inconvenient. It’s costly.

The alternative explanation is that employers can’t offer, and workers can’t take, lower wages in exchange for better hours. The minimum wage sets a legal floor. . . .

If this explanation holds, we can expect higher legal minimums to lead to even more demands for irregular schedules, as workplaces that once offered better schedules at lower wages lose that competitive option. And if calls for regulating how much flexibility employers can demand also pass, the only way to accommodate slack business will be to hire fewer workers.

Similarly, Amy Merrick of the New Yorker wrote,

Since the recession began, activists and lawmakers have focussed on raising the federal minimum wage . . . . But Anna Haley-Lock worries that such a raise might simply prompt business owners to reshuffle their employees’ hours. She argues that more states should adopt so-called reporting-pay laws, which guarantee payment for a minimum number of hours if a worker’s shift is cut short. (Only eight states, including New York and the District of Columbia, have such a law.)

If Postrel is right, this sounds like a case where the unintended consequences of one regulation lead to still more regulation to fix the new problem.

Meanwhile, Adam Ozimek notes that the data doesn’t support the claims that it’s harder for part-time workers to have more than one job. Instead, “Part-timers are more likely than ever to hold more than one job, and the average number of jobs per worker has gone up.”

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