Friday, September 3, 2010

An Example Of Why FLG Doesn't Find Ezra Klein Impressive

He calls for mandatory paid vacation. Responding to Reihan, Ezra writes:
the reality of the situation, which is not that workers and employers "flexibly choose an arrangement that works for them." Employer-employee relations are rarely so idyllic. Broadly speaking, employees with the power to demand more paid vacation do so, and employees without the power to demand more paid vacation get less -- or in some cases, no -- paid vacation. A law guaranteeing paid vacation would primarily tilt the playing field toward low-income workers, rather than against them, as is the case now.

There are a variety of problems with Ezra's response. First, it seems to look at an employer and an employee in a static situation. Over time, employees can switch jobs, which means that their relationship with a particular employer isn't all that important. It's more nuanced than he seems to contemplate. Second, even if we accept that the problem is relative power, then what's to stop employers from just reducing the pay? Maybe not just a straight pay cut, but perhaps by slowing their pay rises. People make labor-leisure decisions over time. Inserting the state in there to supposedly help the less powerful party to achieve one objective doesn't mean the more powerful party won't simply make up for this elsewhere over time.

In short, as I've always maintained, Ezra has a narrow focus and short-time horizons. It doesn't look that way to many because he baffles them with detailed analysis, but that's just the old forest and trees problem.


The Ancient said...

Over time, employees can switch jobs, which means that their relationship with a particular employer isn't all that important.

Yes, and the rich and the poor are equally free to sleep under bridges.

1) Some employers (those with non-unionized hourly workers) would tend to take government-mandated benefits out of their employees' hide, as you say. Others (with unionized employees, employees paid annual wages, or highly-skilled employees that are difficult or expensive to replace) would tend to pass such costs on to the consumer.

2) Ezra ought to know that any such a law would simply accelerate outsourcing and the ongoing replacement of labor with technology in the workplace.

3) I don't know that this is the best example of different "time-horizons." Ezra simply doesn't know much of anything about the real world. (And why would he? What is he, fourteen?)

FLG said...

The Ancient:

I'm not quite sure what you mean by the intro. Are you saying that the poor never switch jobs?

Re 1) He's trying to help the first group (non-unionized, hourly workers), not the second.

Re 2) Agreed.

Re 3) Perhaps this isn't the best example of his time horizon limitations, but he's got 'em aplenty.

The Ancient said...

Oh, no. The poor and the working class switch jobs all the time -- particularly the growing number who have more than one job.

If you're working class, the only preferred employer is the one who gives you some sort of health insurance. (And if you're thinking clearly, you don't give that up unless you can replace it with an equal or better arrangement.)

The upper-middle and professional classes don't have that problem. And when they change jobs electively, it's for very different reasons.

But on your main point, we agree completely.

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