Tuesday, May 01, 2007

Something to Remember This May Day

This May Day, as was the case last year, immigration and workers' rights activists will be out in force to demand improved conditions for unskilled laborers. In many cases, they will simply refuse to show up for work and cause many companies to shut down operations for the day to avoid racking up the fixed costs associated with machinery using energy but producing nothing. Last year, several companies pre-empted the rallies by announcing closures ahead of time and allowing their employees to have the day off. I'd just as easily have fired and replaced them, but unfortunately, I don't have that luxury.

In light of the rallies that will take place today and that have taken place in the past, I have something for everyone to keep in mind. Everyone that works in the absence of a written and signed contract in the United States is considered an "at-will employee" and is subject to immediate termination at the discretion of management. In my case, if I refused to show up at my part-time job at Golf Galaxy, they've notified me that after my third unexcused absence I can be terminated. In other cases, businesses are more or less lenient based on the supply of labor in that particular field. For example, if the supply of labor is tight in the production of widgets, then the producer will be less inclined to fire employees. Conversely, if the supply of labor is plentiful in the production of cogs, then the producer will be more strict.

So everyone should remember one important thing. Every individual is replaceable to the point where nobody else is willing to do their job. At that point, any worker is free to demand whatever their hearts desire from management for the latter is without leverage in the bargaining process. Until that point, however, workers are at the mercy of their employer save the few cases where unions still wield power in their industries. If conditions are truly worth changing, then the labor market would dry up as job seekers avoid the field until conditions improve.

Simple neo-classical economics tells us this. For those of you unfamiliar with the concepts discussed in this post, I direct you to Henry Hazlitt's Economics In One Lesson.

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