Читать книгу Inequality and the Labor Market - Группа авторов - Страница 18

There are multiple other reasons for the weakening of workers’ bargaining power. Globalization has pitted America’s less-skilled workers against workers around the world. But it is not just globalization that weakens bargaining power—it is also the rules that govern globalization. Investment agreements have given investors greater property rights abroad—which means greater freedom from regulation—than they have at home; and free trade agreements have allowed them free rein to bring these goods, made under subpar labor and environmental standards, back to the United States (Stiglitz 2017). Short-sighted employers have looked for the cheapest labor wherever they can find it—and this too has weakened the bargaining power of America’s workers. In short, it is not just globalization that has weakened workers’ bargaining power but also the way we have managed the rules of globalization.

Students of bargaining power are aware of multiple other factors that affect outcomes, most importantly the costs imposed on a worker or a firm if the employee is fired or quits. If there are many jobs available, with many vacancies and few job seekers, then the worker will quickly get another job. That is why running a tight labor market is so important: the excessive focus on inflation by central banks around the world, including the Federal Reserve in the United States, has resulted in higher levels of unemployment and has thereby weakened workers’ bargaining power. A weaker safety net means that the costs imposed on workers if they do not find employment are greater; the U.S. safety net, already weak by international standards, has been hollowed out even more in recent decades. The United States’ unemployment insurance system is weak both in terms of coverage (the fraction of the workers who are protected) and replacement rate (the fraction of the normal wage paid by unemployment compensation) (Stone and Chen 2014). The minimum wage, which sets the floor on the wage that a worker is paid, is more than 20 percent below what it was some 64 years ago (FRED 2015).

Making an employee depend on the employer for health insurance, especially in a system in which there is no guarantee that a person with preexisting conditions can get insurance, ties the worker to the employer, and greatly weakens the worker’s bargaining power.

The structure of America’s housing market, where most Americans own their own homes, also weakens bargaining power because it exacerbates negative dynamics. Normally, workers will leave a weak labor market to look for higher-paid jobs somewhere else. But in weak labor markets housing prices are typically low. In tight labor markets, housing prices are high. This again gives employers in weak labor markets more market power because they know workers will not leave quickly when they lower wages.

There are other changes in the structure of the American economy that may have contributed to this downward spiral. In many American households with two adults, both are working, in part because two salaries are required for a family to earn a decent income. But a household with two earners faces complex coordination before moving to another area for better jobs; for example, both jobs have to be within commuting distance. This gives each of the employers more market power over their workers. Wages can be reduced significantly before workers are induced to search for alternative opportunities. In effect, search costs have been increased.

Because of the imbalance in bargaining power, government has had to step in to protect the vulnerable and to prevent employers from taking advantage of their workers. On all counts, these protections have weakened, and there is growing evidence of abuses. I referred earlier to the lowering of the (real) minimum wage. Overtime protection applies to fewer and fewer workers. The COVID-19 crisis has exposed weaknesses in the Occupational Safety and Health Administration (OSHA), with workers being forced to work without masks and other personal protective equipment—with disastrous consequences at meatpacking plants. The pandemic has also exposed the total inadequacy of the paid sick leave policy—at a cost not only to workers but also to the nation’s health. Employers have demonstrated their power with split schedules and on-call scheduling, both of which are especially disruptive to workers’ lives.