Employer Power?
One of the common themes that comes up in discussions here is the idea that low wage employees are essentially trapped in their jobs, and have to take whatever shit their employers hand out.
Here’s Don Boudreaux, writing recently at Cafe Hayek.
I’m having some repair work done at my place. The lead repairman, Jose, is a voluble immigrant from El Salvador. Jose told me yesterday that he came to the U.S. in 2000 at the age of 21. For eight years he worked for a local cement contractor. He liked his job until, in 2008, the company was sold. Jose didn’t like the new owner. Jose, soon after the change in ownership, gave his employer his two-week notice. The employer immediately offered Jose a raise. (“It was a really good raise,” Jose conceded. ”But I did not like him. I told him I was still leaving.”)
Jose’s account of his wife’s work experience in the U.S. is similar. She worked as a pastry chef at a supermarket in northern Virginia. When the supermarket began demanding that she work longer hours, she quit and found another job – one that pays as well but has work conditions better suited to this woman’s preferences.
I thought about that Sunday when I stopped at Tim Hortons to get a box of donuts for my family and realized that I didn’t recognize anyone working there. I’m a Tim Horton’s regular. I hit the drive-through so often I recognize the person taking my order by his/her voice. Lately, all the ones I knew are gone, and I’m having to learn new ones.
It’s not likely they were all fired. They were good competent employees, and the customer service was almost uniformly excellent. More likely they got other jobs.
Last summer there was a pleasant young girl working as a cashier at the local garden center. Early in the season I was in and out of there so often that I couldn’t help but recognize everyone who worked there. Later in the summer she was gone, which wasn’t surprising, given how seasonal their sales are. But shortly after I took one of my kids to Hobby Lobby for some craft stuff, and there she was working as a cashier.
Now I’m not saying these employees are moving up to higher paying jobs, just that mobility within that lower wage category is probably a lot easier than a lot of people think.
People can quit and be stuck at any level of employment. There are plenty of miserable Wall Street Bankers who stick with their jobs because they are used to the pay scale and lifestyle that comes with it or they think they are something to prove while sticking it out. There are also plenty of lawyers who work for the big firms for a few years to gain experience and then find a smaller boutique firm.
I think there are probably also psychological issues as well. I know people who will quit jobs frequently for what I perceive to be very small slights or just normal things of work but they perceive as very big slights or they just get bored with doing one thing for a long time. I generally like being a lawyer but there are some tasks that are extremely monotonous and require a great struggle to stay awake during. These tasks require a lot of focus.
There could also be family situations and other dynamics that require people to stick it out longer with employment that they find horrible. As a single person without any kids, I have a lot more liberty to look for jobs anywhere than someone with a serious romantic partner and/or children. I can also do some things for an intriguing job without having to worry about whether I can support children, etc.Report
Wall Street does that deliberately, you know. It’s an enforced bit of their culture — you need to be overleveraged, to be unable to afford to quit, or they’ll eventually get rid of you.Report
Ironically, employers have the most “power” over overpaid employees. If my current employer is paying me more than I’m worth, it’s going to be hard for me to find another job without taking a pay cut. If my employer’s paying me less than I’m worth, my odds of finding a job where I can do better are much higher.
Leftists are confused on this point because they confuse low pay with being underpaid. But you can be overpaid at any wage, as long as you’re costing your employer more than your marginal productivity.Report
Two quick thoughts here:
1. I’m not a leftist so this could be a misunderstanding on my part, but I don’t know that the minimum wage argument is that it will give employees more power over the companies they work for. It’s that you can’t pay for food, rent and utilities if you work full time at minimum wage. I agree that golden handcuffs are a very real thing — I’ve way overstayed my time in at least one company because of them — but the idea that people being paid that little are somehow ahead in the power game seems a little un-empathetic.
2. The opposite can be the case when companies reach a certain size. I’ve worked in departments of large companies that had necessary layoffs due to revenue being off, and the best determiner of who was staying and who was getting the axe was always where their salary sat in the position’s pay scale.Report
I’ve only heard minimum wage couched in terms of “Making enough to actually live on”. Not in wealth and excess, but being able to afford the necessities of life without requiring food stamps or Medicaid. (or Medicare. I always confuse them).Report
You want power? and leverage? For real?
Just walk into your HR department and demand a pay cut.
Any other questions?Report
The upside of high turnover is that employers have absolutely no problem firing anyone, because a.) They probably weren’t going to stick around for much longer anyway, and b.) They’re used to, and probably good at training new employees to reach a level of productivity not all that much different from a long-term employee relatively quickly.
Hell, there are call centers and security guard companies with turnover rates in excess of 200% annually, which is insane, but suggests that the employers don’t give a shit whether you’re still here tomorrow, whether it’s because a manager fired you or because you left for another call center job, and it also suggests that it’s a horribly place to work and they don’t pay people enough to keep them in that horrible place.
The other upside of these sorts of things is that the only people who work these jobs are people who absolutely have to — the structurally unemployed, ex-cons, teenagers, people rejoining the workforce after extended absences, etc., and they are, in some ways, the most exploitable group in the labor force.Report
@chris
Chris, while your comments are no doubt true, let me expand upon them, as it’s not always the case. I worked at a well know company-if I mentioned the name, you’d know about most likely. One operating company had similiar turnover as you descibe in most of the departments. These people wrote abstracts, indexed data, etc. for massive online search databases. The people where all liberal arts majors, and all young. They came and worked for a few years before going on to grad school or what have you. They were paid CRAP. Given the location of the office, it was a very expensive place to live, and these folks were making 15-25k a year. I know, I saw the salary info. We were right next to a mass transit stop because, in the words of my boss, “the company doesn’t pay these people enough to own a car”. We had managers of these departments that had been there for 30 years making 35k a year.
Why could the company get away with this? For the you kids, it was a temporary thing until they went back to grad school or academia (good luck with that english lit degree) and folks with the needed skills were literally a dime a dozen. I have no idea if thise was the company’s business plan or it just worked out like that…..but jeebus…..Report
@Chris
An anecdote I was told by someone who works closely with a not-to-be-named big box retailer’s security department: Treating employees like shit and paying them a pittance is an integral part of the corporation’s loss-prevention strategy. Any employee that sticks around for more than a year is put under greater scrutiny by security because the company believes most people wouldn’t put up with such a shitty job for so long unless they were stealing.Report
@damon
They came and worked for a few years before going on to grad school or what have you.
If anyone was working there for a few years ,the turnover was not comparable to what I’m describing. However, you are describing a somewhat different situation, and one in which employers do have a great deal of power over their employees, because those employees are working those jobs specifically as part of a career track: get B.A., work shit job to get experience in X, go to grad school studying something related to X, get really good job in X. The employer can treat its employees like shit, and pay them a pittance, because those employees feel like their career depends on them keeping that shit job. I’ve seen that in a few industries. It’s not all that uncommon in clinical psych, for example, for kids to get undergraduate psych degrees, take a year or two off school while working in social work or pushing papers at a clinic or something, for pennies, and then go to grad school to get a PhD or PsyD. Many of the employers depend on a continuous supply of future clinicians, and the clinicians depend on those employers to get them experience and a good letter of recommendation for the incredibly competitive clinical psych PhD programs they want to get into.Report
@chris
I’d generally agree, but I also think it’s reflective of the value of the education these workers had. Nobody pays a lot for english majors, lit majors, etc.
I’m not sure how relevant the work they did at my old company applied to their career. Frankly, I’m not sure what their career was, but I know that they were around 1-2 years. It surely paid better and had better working conditions than service jobs…so…We did had 100% turnover in those departments many times.Report
Ironically, employers have the most “power” over overpaid employees.
Maybe. I’m not going to get into a big battle about stuff which is a matter of logic for you but pretty disconnected from reality to me. In my experience, employers have the most power over employees who have no idea what they’re actually worth (so they don’t know they could get a better job or deserve better pay) and are fearful of losing/emotionally desirous of maintaining their current employment. *Those* are the folks employers have lots of leverage against. The dynamics of employer/employee power relations are much more muddled than your comment suggests.Report
+1. Also, employers who can call immigration and get you deported have a lot of leverage over you (be this H1B folks or “illegal immigrants”).Report
Deportation isn’t what it used to be. If minimum wage is to yield to the race to the bottom, there is a nearby rate of $5/per day we will need to reconcile before we all are true Pelosi americans.
Probably should abstain incumbent flogging until minimum wages has been removed for a decade.Report
And didn’t we just have a symposium on work, in which it was pointed out several ways that work is much more than a simple economic transaction?Report
I would like to hear what the $5 dollar a day crowd thinks of the symposium?Report
Turnover at low wage jobs with few or no benefits is really high. Also, wage replacement levels for individuals on unemployment who made $15/hr in their previous job are well below 100%, and they have higher UI exhaustion rates than people making more than $15/hr.
One has fewer incentives to stay with a low-paying job with no benefits than one does for a higher paying job with benefits. I’m not sure anyone disputes this. The reality for people working those jobs is anything but pretty, though.Report
Right now, I think there’s a lot of job-shifting going on; and companies, instead of hiring the out-of-work, are hiring from other employers to fill their needs. Eventually, I hope, that will start putting enough upward wage pressure on businesses that they start re-considering those long out of work.
But it’s so damned slow.
I think there’s always been a lot of mobility in service sector workers; I know we see people bounce around from retail store to retail store and restaurant to restaurant here. It’s not until you get to a benefits pkg too good to let go of that any sort of long-term commitment to a job seems to kick in.Report
But shortly after I took one of my kids to Hobby Lobby for some craft stuff, and there she was working as a cashier.
Was she pregnant?Report
Hobby Lobby, because it’s known to pay well above minimum wage, and generally treat employees better than, say, Walmart or most fast food places, is a difficult job to get. They get a ton of applications, on par with the sorts of specialty stores (gaming stores, comic book stores), or general electronic stores (e.g., Best Buy), where people apply because they’re interested in the stuff or they want the employee discount (I used to know an engineer who worked part time at Best Buy for the discounts). The turnover at Hobby Lobby is therefore lower, and the competition for the few open spots greater. They (and Best Buy) go through multiple rounds of interviews for entry level positions, in a process that’s not that different from the one that a 6-figure salary position might require.
Really, given its reputation for being good to its employees, the company’s willingness to go to the Supreme Court to deny its employees health coverage on the basis of gender is kind of surprising.Report
Chris, every time someone here says low income people are powerless when they have a bad boss because they can’t change jobs, it’s disputed.Report
Ah, when I say such things, I usually mean people slightly higher up on the income scale: working and middle class people who have jobs with benefits. People who have benefitless, largely unskilled jobs like retail or service industry jobs, are screwed in entirely different ways.Report
No, my kid was not pregnant.Report
I think Mike means the cashier….Report
I’m not the type to ask.Report
I’m pretty sure the first time I ever dare to ask a woman if she is pregnant, she won’t be.
Then I’ll just have to crawl into a hole and die.
Ooooooo! But this reminds me of a funny story. At the drag club (of course). I’m hanging with two other trans gals, both of whom pass pretty well, but neither perfectly and given the venue one should guess they’re trans.
Okay, so a cis lady is there also, chatting with us. (In fact I’ve been kinda hitting on her a little.) Anyway, one of the trans gals complains that she is getting fat. (She isn’t.) The other says, “Ooooo! You’re pregnant.”
The cis lady was like, “OMG, you’re pregnant! Congratulations!”
She went on like that for a while. The two trans gals just listened with befuddled expressions.
After the cis lady left, I said, “She doesn’t really get it.”Report
You know what I meant.Report
What, I can’t joke, too?Report
Sorry, I missed it. (I’m the one who’ll say anything that strikes me as funny, but I’m not sure I’d have gone there about my daughter.)Report
It wouldn’t surprise me if there was quite of bit of mobility within low wage jobs. That is fine but i’m not sure how much that proves about anything. It seems like mobility up from low wage to better wage jobs is the big problem. Young single peeps with no kids can be very mobile about jobs. People with kids can usually afford much less mobility, but most low wage jobs can always find young folk which leaves older people a bit screwed.Report
I agree. I was only directing this at one particular claim I hear frequently, and I don’t mean it as an implicit claim that life among the low wage set is peachy keen or enviable.Report
So I was in a taxi in Bangalore, and struck up a conversation with a very wise cabby, who told me that the world is actually flat. And hot. And crowded.
Man, I thought.
This guy is really on to something.Report
So, LWA, you can’t distinguish between listening to a random guy give his perspective of the world and observing what actions people are taking with their own lives? I can’t say I’m surprised.Report
Just in case you honestly don’t know what he’s getting at, he’s criticizing what he sees as a generalization from personal experience.Report
James, read criticisms about Thomas Friedman on liberal blogs and you’ll get the joke.Report
Liberal blogs? Dude, everyone makes that joke about Friedman.
And rather than generalizing from personal experience I’m presenting counterfactuals that tend to disconfirm a thesis.Report
And LWA is replying that no true scotsman would find upward mobility out of a minimum-wage retail job.Report
What is it with people finding upward mobility as a theme in this post? First Tod, now you. I explicitly said, “Now I’m not saying these employees are moving up to higher paying jobs.” I would think that means I’m not saying the employees are moving up to higher wage jobs.Report
@jim-heffman
Oh, no, not at all.
I am agreeing with Hanley that these people are freely and voluntarily moving from one shit job to another shit job.
No upward mobility whatsoever!
Just free voluntary associations, personally discovered individual agency and movement, from the donut shop here, to Café Hayek there, and maybe back again.Report
@james-hanley — Well, the name of this post is “Employer Power?”, which is clearly meant to be kinda-sorta ironic and suggest that high turnover indicates that it is the employees who have the power. Or maybe. Something like that. Yes?
So we get to push back, like, ask what power are we discussing exactly? The power to move from one low paying shit job to another low paying shit job, neither with benefits, neither with meaningful advancement, both boring as fuck, but hey, you can move from the first to the next and it takes three days to train the next person so — oh boy! — these employers must have a labor problem.
After all, clearly this shortage of workers is driving up pay. Right?
No, oh, well then it must be driving up benefits?
Not that either. Hmmmm.
Forcing the employers to convert part time to full time?
Nope.
I’m wondering what the power entails exactly.Report
Veronica,
So you’re working a low wage job, and the boss is an asshole. Maybe he just likes to yell at everyone. Maybe he likes to make sexist comments. Maybe he’s got it in for you because he can’t wrap his mind around you being transexual.
Now imagine two alternative worlds. In one, you can’t afford to leave that job because you can’t get any other work. In the other, you can afford to leave that job because you can get other work.
In which of those worlds do you have more power? Is that power important or unimportant?
I’m not asking whether it’s an ideal world, or whether it’s as much power as you would like to have or that we think employees would have. I’m just asking whether in itself it’s a valuable power to have.
Because we have repeatedly had folks here claiming that low wage employees don’t have this power. So now when I suggest that maybe they do, it’s too late for those folks to revise their estimates and pretend the power they bemoaned employees not having isn’t important.Report
@lwa
from one shit job to another shit job.
The amount of privilege it takes to treat all low wage jobs as equally shit jobs is something I can’t quite fathom. Maybe if you’d ever had to work a variety of low wage jobs you’d know the difference.Report
All good jobs are alike. Every shit job is shit in its own way.Report
+1Report
@james-hanley — Well, I know people in those exact positions, visibly trans, visibly queer, and working shit jobs. And yeah they can bump jobs some, but often they feel pretty trapped.
I know one girl who is routinely abused by coworkers. Now, this abuse is not actionable, it’s just shitty comments here and there, those little digs that make a long hard shift that much longer and harder. But management will do nothing. I know that she does not feel like she can change jobs right now.
And if she does, what are the odds that at the next restaurant she finds there will be no queer-phobic assholes? Or a boss that is trans positive?
I mean, it’s possible.
People with privilege are very good at not seeing, along with dismissing, the real hardship that non-privileged people face. In this scenario, the boss blows off her complaints, because he doesn’t want to be bothered and really-actually he cannot conceive why this is difficult. “Just ignore it” or “Tell him off,” are privileged responses. After all, the boss has never been a queer woman working among men.
Will her next boss be socially aware?
Her next boss could be worse. The devil you know.Report
Mrs. LWA works at Disneyland for just a little above minimum wage.
Its actually a very good place to work, as minimum-wage places go, maybe even the best of its kind. Most of the park is union, and even those who aren’t are still treated pretty well.
But its still hard work, low pay, and much more physically demanding than most here do or remember doing. In Alexandra Pelosi’s documentary Motel Kids, she documents that some of the park cast members are functionally homeless, living in motels. The Orange County papers have documented that some actually live in storage containers.
Minimum wage people aren’t ever truly trapped in their jobs- they have, to use a phrase, “exit rights”.
But so do oppressed Galtians have exit rights from high tax jurisdictions. The question is, exit to where, or what? From Burger King to Dairy Queen?
I just think its perplexing to make a point about how they are free to leave- like bragging that the waitress at Denny’ s doesn’t have a ankle bracelet or something.Report
I just think its perplexing to make a point about how they are free to leave
Let me explain it once again then. People here–on this blog–said those employees are trapped in the job they have, completely at the mercy of their current bosses, because they can’t leave.
Folks here made the issue a big fucking deal. And now when I point out that maybe, just maybe, in fact they can leave, suddenly there’s a chorus of “it’s no big fucking deal.”
Ideology means never having to admit you’re wrong.
And, Disneyland, physically demanding? Try being a stocker in a building supply store or a bike messenger. Theme parks are a cakewalk compared to that.Report
So I was driving my taxi one day, when this huge mustache got in and started babbling incoherently.
Man, that guy did not know WHAT was going on.Report
After he got in my cab, he called all the other cabbies who were clamoring to drive him a “predatory herd”. What a d-bag! I mean, which predators travel in herds?Report
Generally speaking, these sorts of decisions aren’t easily exposed to generalization, and when we start talking about broad trends implying something we’re probably doing more to illustrate our biases than making particularly interesting social dynamic observations.
For starters, a lot of folks in low-to-moderate skill service sector jobs are people who are intentionally short timers. School starts up (or school gets out) and they go back to school (or go back home). James noted a recent change, but he works for a university (can’t remember if you’re a university town, Jimmy?)… so it’s entirely possible that the recent change isn’t due to the economy or people looking for or finding better jobs or anything, it’s due to the fact that school just got out and some of those folks left their part-time job that paid for beer money to go back home to Mom and Dad’s for the summer. Lots of low-to-moderate skill service sector jobs are more susceptible to turnover because it doesn’t take someone six years to learn how to run a cash register; organizations don’t commit the sunk cost fallacy when evaluating their performance, etc.
Brandon talks about payment on marginal utility, which is something of a notable point, but there’s a lot of other fluid dynamics going on… the lower wage employee may not have enough stockpiled cash to leave a job to look for a job, the lower wage employee may be working two jobs and may not have enough time to look for a job while on the job, the much-higher paid employee is very likely measured on success metrics that aren’t as susceptible to marginal utility calculus as the lower paid employee (serving X customers in N minutes when it gets busy is a lot easier to measure than middle management outcomes), the higher paid employee probably has utility value that doesn’t have anything to do with the job at all (he’s my poker buddy or my bridge partner or part of my golf foursome) where the lower paid employee has no direct outside-of-work relationship with their boss, etc. etc.
One the gripping hand, I agree that employees have a lot more power than is generally expressed in the commentariat around here.
(sigh)
Gotta finish the jobs symposium post so everybody can tell me how wrong I am…Report
FTR, I work at a small college in a small town that has two small colleges. None of those employees were students at my college, and it seems unlikely they were all students at the other. Also, most of the ones I’m thinking of worked there last summer.
So I can’t speculate on their reasons, but that particular one seems unlikely. If I were to guess, I’d say it’s probably normal employee turnover, each person having their own particular reasons and that the apparent “sudden rash” of departures is just random, noise, not signal. Or else that the management has started sucking and my Tim Horton’s experience is going to go south.Report
small college in a small town
I used to work in college athletics. One day, we were playing Frostburg State University. I asked one of the girls who was doing stats for them, “Where in Maryland is Frostburg State?” She answered, without any hint of irony or any sort of smile on her face, “It’s in Frostburg.” Only professional decorum prevented me from replying, “No shit, Sherlock”.
Frostburg has an official population of 9,002. In other words, it shouldn’t have been used as a reference point. If she had said, “Oh, we are 33 miles from the western border of Maryland,” that would have been an answer I could use.Report
That fits my school exactly. I tell people southeast Michigan, or SW of Detroit, or about 45 minutes SW of Ann Arbor.Report
Frostburg State sounds like a make-believe school from a cartoon. Of course I’ve actually been through that area a few times so I know it’s a real place. Sort of like Gonzaga [sp?]. Who the hell names a school something like that?Report
@Road Scholar: You likely are thinking of Whatsamotta U, in Frostbite Falls. You also are showing your age.Report
Another thing is that, below a certain income level, without specific skills, and without benefits, the only difference between jobs is largely the work itself. If you’re not looking for a career (moving up the ranks over years), then as I said above, the incentives for staying with a company are pretty low. So you see really high turnover rates. And the social safety net kicks in pretty quickly for people at the income levels we’re talking about, so the drop in income and quality of (non-work) life is pretty small.Report
My opinion is that the world should be divided into two classes of people: victims and oppressors. My role in the overall scheme is to organize the victims so that they empower me to reorganize the world in favor of the victims (that agree to empower me) and against the oppressors (jerks).
It’s a pretty cool gig.Report
That’s pretty much the plot of Atlas Shrugged.Report
I think you’re missing a crucial aspect to the issue of power in employer/employee relationships. Being able to quit and easily go elsewhere doesn’t actually give the employee power so much as it denies it to the employer.
Power derives from the capacity to put hurt on the other party. The observation that employers wield power over employees is a contingent fact that depends on particulars but generally holds due to the nature of the labor market. It’s particularly true for large employers since the departure of any single worker is seldom more than an inconvenience and the impact on the bottom line is negligible. But the loss of a job is normally something of a personal crisis entailing loss of all income for some period of time and, in a weak job market like we have currently, potentially disastrous. The threat to fire is much more potent than the threat to quit.
Not every situation has that dynamic and some are much more equal, but those are the exceptions that prove the rule. I think you’d be hard-pressed to find a situation that was the reverse.Report
Power derives from the capacity to put hurt on the other party
I’d say power is the ability to get the outcome you want. If you can get the outcome at the top of your preference order, you have more power than if you can only get something a little lower down on your preference order. But if you can get something a little lower down on your preference order, you have more power than if you can only get something that’s at the bottom of your preference order.
E.g., If my current boss sucks, I might have this preference order.
1. Stay in job with better boss.
2. Find new job that may have better boss.
3. Stay in job with current boss.
4. Be unemployed.
The best power for the employee, obviously, is to be able to get 1. So getting 2 represents a less than optimal degree of power (from the employee’s perspective). But getting 2 is better than being stuck with 3, so it is more power than the employee would have if they could only get 3.Report
I’m forced to wear pants at the office. You cannot tell me there is no power imbalance.Report
I stand corrected.Report
If you don’t like it, move to Scotland.Report
I’d bet there are places in Somalia you can get away with not wearing pants.Report
Fight The Man, Jonathan.Report
@james-hanley , I think you’re ignoring a couple of important factors in your analysis, though.
Clearly modern low-wage labor is not serfdom, and I hope nobody on this site is saying otherwise. But there are very specific mechanisms that keep employees stuck in low-wage positions that aren’t necessarily reflected in higher paying work.
The one example is starting hours. When my engineering friends are dissatisfied with their current jobs and go looking for a job at a different engineering company, they might be out of work for a week or two during the transition, and maybe they take a slight pay cut. When my full time retail or food service employee friends make the same switch, they’ll typically leave a job with a 35-40 hour work week to get a job that has a 20 hour work week for the first four to six months. The amount of part-time to full-time hiring means that almost any self-supporting employees have very little opportunity to change employers.Report
Clearly modern low-wage labor is not serfdom, and I hope nobody on this site is saying otherwise
I think they are saying this. What else could “they can’t leave their job” mean?
And to be clear, I’m not saying it’s always easy or costless. I’m only saying it actually happens.Report