Editor’s note: Bruce Rottman is an economics and humanities teacher at Providence School in Santa Barbara.
News reports that Santa Barbara’s City Council overwhelmingly voted for an extra $5 an hour “hazard pay” for grocery store workers and pharmacy employees show an astounding degree of ignorance of economics.
Yes, it’s very late in the COVID-19 game, with cases declining precipitously and vaccines readily available. But that’s not why it’s ill-advised. Instead, it shows the lack of understanding of basic economic principles by our local officials and a concomitant disregard for rights. As a high school economics teacher for 42 years, I teach my students to not only think of the “seen,” but also to think of the “unseen.”
I have seen firsthand how working through the pandemic affected one local grocery worker.
My son is a 15-year employee of Trader Joe’s. He worked willingly throughout the pandemic, including the early days when personal protective equipment was in short supply and the virus was not well understood, including the weeks when scientists thought the virus could live on cardboard boxes for up to 24 hours.
Beginning his shifts at 4 a.m., my son unpacks a lot of cardboard boxes. He followed safety protocols as best he could with the information at the time and he counseled his fellow employees to not be “heroes,” but to stay home if they felt ill. The company provided extra compensation and increased benefits in acknowledgment of the risks endured by their workers. At no time did my son ever feel coerced to work in unsafe conditions.
Individuals, such as my son, choose their jobs, each of which has varying degrees of risk. And while many individuals’ jobs in the past 18 months have heightened their potential for exposure to COVID-19, in a free society those individuals have no right to getting a paycheck beyond which they willingly accepted when they took the job.
The notion that governing authorities should change wages that people have already accepted assumes, first of all, a pretense of knowledge: that politicians know what all wages should be, which workers deserve higher pay, how much pay should increase, what each individual’s circumstances are, and the like.
Adam Smith’s observation applies to the Santa Barbara City Council: “The man of system … is apt to be very wise in his own conceit; and is often so enamored with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it … He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board.”
Legislating across-the-board wage increases hurts lower-skilled workers, incentivizing employers to displace labor with capital. The only good aspect of the hazard pay ordinance is that it’s temporary. It might be short enough to prevent stores we value in our community from deciding they can’t afford to stay and pull out of our town, shaking the dust from their feet as they exit.
Markets determine wages. And what determines markets? The individual choices of millions of individuals, who supply services or demand goods. To subvert those freely-made choices not only shows an elite’s conceit, but it will eventually harm individuals, further raise the cost of living — food and medications, in this case — in an already high-cost-of-living area, and lead us further down the road to a world in which more and more of our choices are circumscribed by government dictates.
When I asked my 14-year-old freshman students what they thought of the hazard pay mandate, they replied with some interesting questions:
— Who will pay for this?
— If it’s so beneficial, why only do it for two months?
— Won’t more people want to work in grocery stores if they can make more money?
I’m pleased that my students have learned to look beyond the short-term gain to the long-term consequences of such decisions. We all need to be asking questions like theirs.
Sound economics education teaches us fundamental truths about the world. Short-run, knee-jerk reactions may appear to be compassionate but in the end they are anything but compassionate (a word which literally means, “suffering with;” ask yourself, what suffering did city council members endure to pass this legislation?)
Coerced compassion is an oxymoron. And top-down dictates legislating what voluntary transactions individuals make subverts genuine justice.