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Tuesday, September 23, 2008

Responsibility for the Big Squeeze: Employers, Consumers, Citizens?

Big_squeeze In my earlier post I suggested that The Big Squeeze's focus on employer wrongdoing left us under-prepared to argue for vigorous, and costly government intervention.  Melissa Hart's responds by arguing that consumers implicitly are responsible for "the high cost of low prices" and that they will need to pay "one way or another" for change.

I tend to agree, but once we pivot to consumers from unethical or mean-spirited employers (or their managers, to whom Steven Greenhouse turns in his own followup), how far to do we get with tales of employer-employee abuse?  After all, the consumer says, "*I* didn't do anything wrong.  Why should I have to pay for someone else's wrongdoing?  And besides, I'm hurting plenty myself."

Once we shift focus from nasty employers to the systemic consequences of relentless price competition, the problem (and its solutions) might start to look pretty different.  Indeed, one possibility is that the problem isn't even that prices are "too low" but that some people are getting left behind through no fault of their own while others are getting ahead through pure good fortune.  That would push us toward focusing on the mutual responsibility among citizens, not necessarily consumers' ill-gotten gains.

Let me give one example that relates back to Orly Lobel's reluctance to put "lawyers and accountants and investment bankers" in the same box as low-wage workers.  I think there's a pretty good argument that many non-managerial professional employees are benefitting a lot from what Greenhouse describes, not only through lower prices but also through the advantages that their children get relative to the children of other workers in our massively unequal system of access to education and jobs.  So they're (we're) employees but coming out on top.  And on the other hand, I think there's a pretty good argument that plenty of small businesspeople (who never appear as protagonists in the book -- and rarely even appear as employers, despite the fact that about half of U.S. workers are employed by very small firms, not the behemoths we repeatedly see) work very hard and are getting squeezed, too.  But when the oppression of employees by employers organizes the story, the professional employees are off the hook and a struggling employer is on it.

Posted by Account Deleted on September 23, 2008 at 02:31 PM in Books | Permalink


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Are you saying this is a class issue? A skill valuation issue? If so, I wonder what role government should play. What we need most is a market "correction" in the valuation of certain skills. Unions could certainly help with this. The current financial crisis will also have an effect. Perhaps we could go the way Mickey Kaus suggested in the "End of Equality" -- allow variation in incomes, but provide generous social goods like good health care and strong public schools. I'd be curious to hear more about your thoughts on how to change the low wage structure that has settled over certain sectors of our economy.

I agree that it would have been interesting to see more about small employers. From my experience at the Board, it was often small employers who most grossly violated the law. What is suprising about the "Big Squeeze" is the systemic lawlessness that it describes in large (the largest) companies. Usually bigger companies are better able to comply with the letter of the law.

Posted by: Matt Bodie | Sep 23, 2008 11:10:39 PM

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