From the land of fruits and nuts

The California Legislature is currently gestating a bill declaring the work week shall be 32 hours for companies with more than 500 employees. Worse, the bill would mandate that the pay rate remain what it was for 40 years, and cannot be reduced. But wait, there’s more!

If the beleaguered employer tries to get its employers to work more hours to make up for the lost productivity, they have to pay time and a half over 32 hours. Or, the beleaguered employer can take on the added expense of part-time works to make up the lost hours.

From the text of the bill:

Existing law defines and regulates the terms and conditions of employment. Existing law generally defines “workweek” for these purposes and requires that work in excess of 40 hours in a workweek be compensated at a rate of at least 1 1/2 times the employee’s regular rate of pay, subject to certain exceptions. Existing law makes a violation of these provisions a misdemeanor.

This bill would instead require that work in excess of 32 hours in a workweek be compensated at the rate of no less than 1 1/2 times the employee’s regular rate of pay. The bill would require the compensation rate of pay at 32 hours to reflect the previous compensation rate of pay at 40 hours and would prohibit an employer from reducing an employee’s regular rate of pay as a result of this reduced hourly workweek requirement. The bill would exempt an employer with no more than 500 employees from the above provisions. By expanding the scope of a crime, this bill would impose a state-mandated local program.

What’s the worry, you say? A number of companies have experimented with a four-day work week.

I realize that when classroom instruction time is taken up with inculcating little Brandon and Ashley Snowflake on the nuances of gender bending there is less time to spend on basic economics. But, there is a difference between a private company choosing the hours their workers put in and what they get paid, and the government mandating that an employee can work 20% less for the same pay, and that the employer must bear the added cost.

While I would love to see this bill pass in California, as it would only hasten the demise of that state, and perhaps something useful could be rebuilt from the rubble, a Democrat Congressman has introduced a similar bill at the federal level. (Co-sponsored by Rashida Tlaib of Michigan.)

Prices are often described as signals because they convey information to both producer and consumer who can make rational decisions based on that information. Producers make decisions on whether to produce more or less. Consumers make decisions about consuming more or less.

The price of labor is no different. It conveys information that employers take into account when deciding how many employers it can afford, and employees decided if it is worth it for them to work at a given pay rate, or if they can find a better rate elsewhere.

When the government interferes in markets, and things like minimum wages and rent control are interferences, it introduces distortions. Distortions lead to bad information, and with bad information, producers and consumers make decisions they wouldn’t have made otherwise had they had good information.

These distortions have ripple effects. Employers cannot just absorb 20% less work for the same pay, and so these costs are passed on either in higher prices for goods, or fewer employees.

Do the people behind these bills care about the distortions they would introduce? One problem is they can’t know all the distortions they would cause. Prices are the signals that imbalances are present, and the prices would be wrong. The authors of these bills think they bribe voters by giving them other people’s money. Only a simpleton would think such a bribe wouldn’t cause problems, and only a fool wouldn’t worry that these problems can’t be completely known.

One completely predictable outcome is when you elect socialists, you wind up living under socialism.

Kevin Williamson put it this way:

We want to simplify the complex. And we want to bring down that which is high to a lower level where it’s easy to understand. So if the thing that’s wrong with the country is there are people we don’t like, and they’re getting rich by screwing us. And by messing everything up behind the scenes. That’s a pretty comforting story. If the actual story is “wow, the world is complex and we can’t actually accomplish a lot of the things that we want to. And the government can’t necessarily do the right thing even if we all agree on what it is because there are information problems and there are problems of incentives and problems having to do with complexity, that make things come out not the way we intended, and that all of our best intentions and our purest motives can produce horrifying results as they as they have over the years.” You see this in the really extreme political outcomes.

You know, the people who fought the Russian Revolution, didn’t want to build a nightmare state of gulags, but that’s where they ended up. I don’t think most of the people around the Chinese Communists in Mao’s era wanted to inflict the kind of nightmare on their people that they did. But they did. Now our situation isn’t that extreme, obviously. But it’s the same principle in the sense that nobody wants the current situation. Nobody really wants these outcomes. No one wants our healthcare system to look the way it does. No one wants K through 12 education to suck as hard as it does around the country. No one wants police who are irresponsible and trigger happy. But this is the system we’ve nonetheless managed to build for ourselves out of the interaction of our conflicting motives and incentives and information.

56 thoughts on “From the land of fruits and nuts

  1. Well, Emery, at least DeSantis isn’t a brain dead, corrupt, racist being kept in the basement eating his pudding like Pedo Joe the puppet boy.

  2. Emery on April 25, 2022 at 12:40 pm said:
    ^ Would you consider former president Trump a popular political rival?

    Would someone who speaks Gibber please translate this to English for me?

  3. Emery on April 24, 2022 at 10:06 pm said:
    “Say stuff we don’t like and you should expect the government to retaliate” is really an amazing new conservative position. So the whole freedom of speech thing that the GOP strongly supports only works when you say what they want you to say. Do I have that right?

    You could not illustrate Berg’s 7th Law more clearly if you tried.

  4. I see the whole controversy as mainly a play by DeSantis to pick a fight that resonates with Republican primary voters.

    Like “Beto” O’Rourke saying, “I’m coming for your guns”?

  5. DeSantis is only doing this to fire up his base!
    Disney will win in the long run so it’s a waste of effort!
    The whole government of Florida is drunk with power!

    “So Grant gets drunk, does he?” queried Lincoln. “Yes, he does, and I can prove it,” the man replied. “Well,” Lincoln answered, “you needn’t waste your time getting proof; you just find out, to oblige me, what brand of whiskey Grant drinks, because I want to send a barrel of it to each one of my generals.”

    Ship me a barrel of whatever DeSantis is drinking in Florida. I want to give it to every Republican legislator in Minnesota. The man knows how to fight.

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