Tracing consequences both seen and unseen.
Lee SharpeEmployee Benefit Mandates Are Lose/Lose
Posted at 9:39 pm on April 9, 2010, by Lee Sharpe

If you were an employer, would you rather have (at the same hourly wage) a full time worker working 40 hours/week, or two part time workers working 20 hours/week each?  Most employers would answer with the former.  A worker who has a full time job is (or will be in time) more experienced than a part time worker, because of the larger number of hours worked.  Further, a full time job obviously provides a better source of income to a worker than a part time job does, so a full time worker is less likely to look for more work elsewhere, which once it occurs deprives the employer of the experience that worker already had.

So why are so many employers forcing employees to work part time hours or as temporary employees rather than provide them with a full time job?  Because health care is expensive, and many governments mandate that employers provide health benefits to full time workers.  This incentivizes employers to keep the full time employment payroll to a minimum, which as described above is often worse for both employer and worker.  Many workers now forced to work 20 or 30 hours/week would be happy to work 40 hours/week in order to bring home more money, even without health insurance.  And wanting more experienced workers on the job, employers in many cases would be happy to provide it.  But instead well-meaning politicians are making the lives of these poor workers worse, and the customers of their employer have to deal with a less experienced workforce.

Such policies are worse for employers, worse for workers, and worse for consumers.

Filed under: Regulation
Comments: 1 Comment

1 Comment

  1. So very true! In fact, this is what happens in almost all cases where government gets involved (particularly in the workplace). A good example is government mandatory “minimum” breaks. For instance, employees getting half hour lunch breaks because that is all they “must” be allowed to have. From an employers perspective, why give more than you must? Some employers do, but the majority do not. Employees and employers simply do not have the flexibility to come to an agreement of any sort. Even if the employee would prefer setting their own wacky break schedule and the employee is ok with that, it is simply not allowed. Instead we have yet another case where collectivism stifles individualism.

    Comment by Michael Trocki — 2010-04-10 @ 8:00 am

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Henry Hazlitt"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
Henry Hazlitt, Economics in One Lesson






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