The belief that employers and workers have equal power and are therefore “free to contract” continues to hold sway among employers and jurists. This false presumption, however, undercuts common law, statutory and constitutional worker protections.
This assumption of equal power and the claims made in philosophy and law to support it ignores the actual circumstances of workers that make it hard for them to quit, and, despite recent low unemployment in this recovery, it ignores the persistent excessive unemployment workers normally face. Moreover, a growing wave of research demonstrates that workers can’t just quit in response to wage cuts or unsafe working conditions as competitive theory stipulates. In fact, this research documents the pervasive power employers have, especially when it comes to minorities, and non-college-educated workers.
The claim that any limitations on management power through collective bargaining, labor standards, or safety net protections, hurt the economy also flies in the face of research evidence. Most prominently, there is abundant evidence that labor standards such as government-mandated higher minimum wages, even to high levels, lift low-wage workers’ annual earnings. Similarly, restrictions on managerial power such as constraints on employers’ “labor flexibility” (such as restrictions on firing, layoffs, promotions, or provisions of adequate unemployment insurance) or enabling workers’ voice through co-determination do not adversely impact economic outcomes.
On October 18 EPI hosted a conversation moderated by Brishen Rogers, Georgetown Law, with speakers: Larry Mishel, former president of EPI; Suresh Naidu, Columbia University, and Angela Harris, co-editor-in-chief of the Journal of Law and Political Economy.
The event drew from the material in a newly released edited volume of the Journal of Law and Political Economy, “Not So Free to Contract: The Law, Philosophy, and Economics of Unequal Workplace Power,” which is summarized in the introduction.
- Lawrence Mishel, Director of Unequal Bargaining Power initiative, Economic Policy Institute
- Suresh Naidu, Professor of Economic and Public Affairs, Columbia University
- Angela Harris, Professor Emerita, University of California Davis School of Law and Co-editor-in-chief, Journal of Law and Political Economy
- Moderator: Brishen Rogers, Professor of Law, Georgetown Law Center
EPI President Heidi Shierholz will be giving introductory remarks.
When: Tuesday, October 18, 2022, 4:00–5:30 p.m. ET, 1:00–2:30 p.m. PT