Two Seattle council members, Lisa Herbold and Lorena González are proposing regulating employees’ schedules in the city. Some are calling the idea “livable schedules” and venture capitalist Nick Hanauer supports it because he argues:
“Most workers in our economy have very little leverage or bargaining power and owners and people like me have enormous amounts of power.”
Hanauer completely misunderstands how labor markets work. He seems to think that the power struggle in a labor market is exclusively between employers and employees, and that most of the time power lies with the employer. If he’d given the matter a moment’s thought, he’d know the answer to this question (one he has asked):
“…why not demand complete control over a worker’s schedule — including off hours in the case of on-call shifts — if there are no laws against it?”
The reason no employer does this has nothing to do with an absence of labor market regulations. It’s because in a free market companies compete against each other for employees. In a growing economy with low unemployment, unlike in Hanauer’s dystopian world, most power rests with employees and job seekers. In other words, the struggle isn’t between bosses and workers, it’s between businesses.
Indeed, if at all times business owners have so much power, why wouldn’t they exploit it in other areas as well? For instance, why doesn’t everyone in Seattle – from engineers to wait staff – earn the minimum wage?
A labor market balances the supply and demand equation, just like a market does for the supply and demand of any other good or service. Think about the humble cup of joe, for example. Why is it that I can walk into any café in Seattle, not bother to look at the price of a latte, order one and know that, when it comes time to pay, I’m not going to be charged $100? Imagine that the café is a massive chain and I’m just little old powerless me. Why wouldn’t the company rip me off? The answer, of course, is that I’m not powerless, because the store has to compete with hundreds of others in Seattle.
While some employees might not like the way their employers manage their schedules, the problem isn’t universal. Many are happy with the way their hours are managed, like flexibility or they prioritize other employee benefits ahead of this aspect of the job. This is one of many reasons Herbold and González’s proposal is wrongheaded. It might benefit some employees, but in the process others would be harmed as employers are forced to change the way they do business and make tradeoffs in order to accommodate these new regulations.
Scheduling is incredibly difficult. Businesses invest heavily in it and continuously seek improvements to their processes. Hanauer has said that Herbold and González’s proposals are good for employees and that business’s will profit from “secure scheduling”. As a venture capitalist, he should team up with the council members, and they should put their money where their mouths are. Start a business that offers what you’re proposing to force others to do and if you’re right, employees will choose you over your competitors and you’ll thrive. The fact that you aren’t doing this and that few, if any, businesses freely run themselves the way you say they should says it all.
Cross posted at Sound Politics.