If You Don't Like It
By Bryan Caplan
Suppose your boss screams all the time, has extremely bad breath, or requires all his employees to speak in a faux British accent. Even today, the law usually offers you no recourse – except, of course, for “If you don’t like it, quit.” Discrimination law has carved out a list of well-known exceptions to employment-at-will. But “If you don’t like it, quit,” remains the rule.
While researching firing aversion, I came across an interesting piece by Mark Roehling showing that few American employees realize that the law affords them almost no protection against discharge. Empirically, his work seems sound. But Roehling also clearly wishes that American workers had the kind of legal protection they falsely believe they already possess. Yes, he admits, employment-at-will has some academic defenders:
Legal scholars adopting classical or neoclassical contract law perspectives argue that employment at-will is justified in that it preserves the principle of freedom of contract, promoting efficient operation of labor markets and advancing individual autonomy (e.g., Epstein, 1984).
The standard rejoinder to this argument is that employees’ “consent” to at-will employment is, in many instances, neither voluntary nor informed due to inequality in bargaining power between employers and employees and asymmetric information (i.e., the lack of equal information about future risks and the effect of at-will disclaimers) that both tend to favor employers (Blades, 1967). These defects in the bargaining process, it asserted, cause at-will employment to be both inefficient and unfair.
How solid is Roehling’s “standard rejoinder”? Let’s start with “inequality in bargaining power.” Sounds sinister. But we could just as easily say, “some people have more to offer than others – and the more you have to offer, the better a deal you’ll get.” Then it sounds utterly trivial.
In any case, what would the economy look like if people could only make deals when they happened to have “equal bargaining power”? Almost all trade would be forbidden. Parties have equal bargaining power about as often as they have equal heights. The beauty of the price mechanism is that it persuades unequals to trade by giving parties with more to offer a sweeter deal.
Roehling’s invocation of “asymmetric information” is even more off-target. In any standard asymmetric information model, the effect is not to “favor” parties with more information, but to scare off parties with less information, leading to fewer trades and making both sides poorer. The upshot: If the law somehow solved the asymmetric information problem, the result would be a big increase in labor supply – presumably making Roehling’s first problem – unequal bargaining power – even worse.
Still, Roehling’s intuitions are clearly widely held. My question for people who share his intuitions: Why don’t the same arguments make you want to tightly regulate the dating market? With a few exceptions, modern dating markets are based on a strong version of “If you don’t like it, break up.” People’s complaints about romantic partners are endless: “He’s mean to me,” “She nags me,” “He’s cheap,” “She won’t have sex before marriage,” etc. Yet prior to marriage, “If you don’t like it, break up,” is virtually your only legal recourse.
If you take Roehling’s “unequal bargaining power” or “asymmetric information” rejoinders seriously, current rules of the dating market should outrage you. Think about the inequality of bargaining power between, say, Channing Tatum and an unattractive single mom who cleans hotel rooms for a living. He has movie star looks, magnetic personality, fabulous riches, and millions of female fans; she’s ugly, poor, alone, and responsible for her child’s support. As a result, he could practically dictate the terms of any relationship. Does this mean she should have some recourse beyond, “If you don’t like how Channing treats you, break up”?
The same goes for asymmetric information. People keep all kinds of secrets from those they date – past relationships, current entanglements, income, philosophy, whether they’ll ever commit. And again, people’s ultimate legal threat against romantic partners’ concealed information and dishonesty is only, “If you don’t like it, break up.”
You could say we have a double standard because personal relationships, unlike work relationships, are too complicated to regulate. Maybe so, but I doubt it. Work relationships are incredibly complex, too. It’s almost impossible to objectively define a “bad attitude,” but no one wants to employ someone who’s got one. You could argue that if we regulate one aspect of unequal bargaining power in the dating market, it will just resurface elsewhere. But that holds for the labor market as well: If the law requires employers to provide health insurance, they’ll obviously cut wages to compensate. The simple story works best: The apparent double standard is real. Since people resent employers, they’re quick to rationalize policies that tip the scales against them – even if employees ultimately bear the cost.
“If you don’t like it, quit” and “If you don’t like it, break up,” sound unappealing – even heartless. But in the real world, it’s hard to do better. In any case, trying to “do better” is probably unjust. The fact that Channing Tatum has incredibly high value in the dating market is a flimsy excuse to restrict his freedom to date. And the fact that Peter Thiel has incredibly high value in the labor market is a flimsy excuse to restrict his freedom to hire. Instead of complaining about the stinginess of people who have lots to offer, we should celebrate the universal human right to say, “I don’t want to see you anymore.”