Thursday, 1 May 2014

The International Workers' Day

Today is the first day of May, a public holiday in very many countries. Those paying attention to public discourse will hear about how workers have had to "fight" for benefits such as paid holiday leave and the eight-hour work day. Such nonsense is a good reason not to pay attention to public discourse. Workers are not competing with firms. Workers compete with other workers, or with a subset of them (sometimes, workers in different sectors may turn out to complement one another). If a new firm opens up, labour activists would hardly lament the addition of more exploiters, but rather welcome new employment opportunities (at least I think so; I do not believe I know any labour activists).
The idea that benefits are due to a workers' struggle for them completely ignores basic price theory. If my labour is worth a dollar an hour and I am presently paid only fifty cent, my employer's competitor should lure me over by offering fifty-one cent. Then someone will realize that he still gains by hiring me for fifty-two cent (the gain is then forty-eight cent), and so on, until I make about a dollar. I may be reluctant to work every week of the year, so part of my employment contract could stipulate that I get so and so many weeks of holiday leave. This would be a benefit, but so is the wage. Both are raised without worker activism. There is also no reason why worker activism is required for the shorter work day. The same argument applies here as applied to holidays.

This is not to suggest that public holidays serve no purpose. It may be that they constitute a good way of coordinating time-consuming group activities. People may wish to go hiking together, for instance, but getting off work at the same time may prove difficult. I suspect public holidays also serve some collusive purpose. The practice of "not working on the Sabbath" or other Holy Days (holidays) makes monitoring output restrictions easier. Whoever is working is in League with the Devil. I suspect the collusive motive is not a major part of modern holidays, however, partly because markets are far more connected and so cartel-like behaviour harder to sustain.

So what did the worker protests of Chicago's Haymarket and elsewhere accomplish in the end? The unpleasantness associated with the protests, some labour-market distortions, maybe some welfare-improvements in terms of coordination, and probably not much else. Maybe better think of today as Thursday.

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