The Angels Made Me Do It

by Don Boudreaux on July 30, 2011

in Competition, Man of System, Other People's Money, Regulation

Here’s a letter to the Wall Street Journal:

Preferring to extract conclusions from her personal experience, San Francisco restaurateur Jennifer Piallat explicitly rejects the use of a “barrage of statistics” to analyze the consequences of legislation that mandates paid sick-leave for employees (Letters, July 30).  And in Ms. Piallat’s experience, legislation mandating paid sick-leave improves firms’ performances.  The anecdote she offers from her own restaurant is that, since the legislation went into effect, employees no longer report to work while sick and, hence, no longer infect fellow employees with their ailments.

I don’t doubt the truth of Ms. Piallat’s account.  But it begs the question: why did she not offer paid sick-leave to her employees on her own?  If paid sick-leave increases her restaurant’s bottom line by, as she says, improving her staffs’ performance, why did she wait to be forced by politicians to adopt that policy?

Perhaps she just didn’t think of doing so, or perhaps she’s a poor businesswoman.  Whatever the reason, Ms. Piallat’s personal experience is hardly justification for substituting the business judgment of people who specialize in winning political office for that of people who specialize in actually running businesses in competitive markets.

Sincerely,
Donald J. Boudreaux

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{ 29 comments }

Krishnan July 30, 2011 at 11:11 am

I am guessing that she did not want to be at a disadvantage vis-a-vis her competitors – it still begs the question as to why she would want to have someone else TELL HER what to do … It is most unfortunate that some believe that the only reason businesses behave “well” is because of mandates from Government – Which businessman (or woman) in his/her right mind would alienate his employees, customers by treating them badly because they could? Can anyone grow a business, i.e. “make a profit” by abusing their own employees and customers? Yes, I imagine those businesses that have the protection of the GOVERNMENT can indeed make a profit no matter what …

I was listening to some of the discussions on “Free to Choose” (youtube) (after the film with Milton Friedman at the center) and it is depressing to hear the same old same old being argued about today – about why we need more Government and why we need regulations and all that

Not Sure August 1, 2011 at 12:46 am

“It is most unfortunate that some believe that the only reason businesses behave “well” is because of mandates from Government…”

If it’s the government who protects workers from their employers, why do government workers need unions?

hayseed July 30, 2011 at 11:18 am

Possibly they could improve the legislation to include bad moods. Her employees would not show up to work in bad moods and infect the co-workers. Time will tell if this adjustment to the law would improve her bottom line.

nailheadtom July 30, 2011 at 11:33 am

Restaurant employees absent for any reason can’t spill food on the customers or neglect them. Ideally, no employees would show up for work and the dining experience would be pleasant for the patrons and profitable for the owner.

aretae July 30, 2011 at 12:34 pm

I expect that after the law business did improve for existing businesses. The result of that kind of legislation is to protect existing businesses against upstart competitors.

txslr July 30, 2011 at 2:58 pm

At a previous employer we used to wonder whether the company would be better off by allowing employees call in stupid – “I can’t come to work today…I’m stupid.”

Of course the government would never suggest that because the government would shut down and the republic would be saved.

Harold Cockerill July 31, 2011 at 7:34 am

Like

Argosy Jones July 30, 2011 at 3:05 pm

Maybe she was misled by economists until her own experience proved their analysis specious.

Don Boudreaux July 30, 2011 at 3:13 pm

Just what is it that economists might have said – or that we now say – that would have misled her? Economists, as such, have absolutely nothing to say about whether certain fringe benefits for specific firms or industries are a good idea for those firms or industries (or their workers) or not.

Tim July 30, 2011 at 4:27 pm

But doesn’t that suggest that economists could have said that it is a bad idea in the aggregate to provide paid sick-leave, hence Ms. Piallat refrained from doing so only to find out, via her own experience, that it did in fact make sense for her to do so?

Granted the major point of the letter…ie that of government coercion…still stands. Still, I don’t understand your response to Argosy.

Don Boudreaux July 30, 2011 at 4:32 pm

Economists (good ones, at any rate) said nothing more on this topic than the following: If fringe benefit X isn’t supplied voluntarily in competitive markets it is likely not worth the cost of supplying it; therefore, if government forces X to be supplied, the likely result – for most firms and workers – will be economic harm: they will thereby be compelled to provide (in the case of employers) and purchase (in the case of employees) some benefit that isn’t worth its cost.

Argosy Jones July 31, 2011 at 1:00 am

Don, forgive me, I was just idly speculating as to why she might not have offered benefits previously, just as you did in your letter.

Harold Cockerill July 31, 2011 at 7:36 am

She lives in San Fransisco. They all sit around waiting to be told what to do.

Pete S. July 31, 2011 at 2:23 pm

No, that’s not quite right. People in San Francisco sit around thinking of things to tell other people to do.

gregworrel July 30, 2011 at 4:44 pm

Many restaurant employees make the bulk of their money in tips so it is not surprising that they do not abuse paid sick days which likely pay only a fraction of their normal earnings.

Regardless of statistics or utilitarian arguments, this is an unreasonable and unnecessary imposition on the freedom of employees and employers to agree to terms which are mutually beneficial.

My own experience as an employer tells me that everyone would take the maximum number of sick days allowed, whether they are sick or not, and the sick days would mostly fall on Mondays and Fridays.

I think there should be a law banning the phrase “land of the free” when referring to the United States. Let’s just admit that we live in a totalitarian state and stop the pretense.

Dan J July 30, 2011 at 6:44 pm

I, too, do not understand why she did not give the benefit, willingly. If she found it to be so imperative to improved performance, then do so of your own free accord and leave others to do as they see fit.
It is amazing to me, that liberals, will not let others alone to make individual decsions and then succeed or falter. As you have said before, Don, the better term rather than liberals for people who have this mindset is ‘butt-inskies’.
Just like a ‘muirgeo’, they can’t leave well-enough alone. They simply must ‘FORCE’ others to do as the ‘butt-inskies’ say OUGHT to be.
Like the old man or woman in the neighborhood who have absolutely nothing to do with their time, they complain moan about the rest of the nieghbors who do or not do as the nosey person ‘thinks’ should be or not be done.
Muirgeo and other ‘butt-inskies’ of the world……… Tend to your own, leave others alone.

Stone Glasgow July 30, 2011 at 9:23 pm

Forcing paid sick-leave benefits firms that are already providing paid-leave (and penalizes those that don’t).

As for why she did not choose to pay sick waiters to stay home before the law, she might argue that firms that choose to be generous with employees would be less competitive against firms that “unfairly” choose not to pay sick workers. The law, by forcing all businesses to raise their expenses, raises the price of everything in the United States, redirecting income temporarily to American workers, and over the long run to other nations without such laws.

Dan J July 30, 2011 at 9:39 pm

no doubt about it, the continued regulations and mandates are the roadblocks to economic recovery and to allowing for the US to continue to be the economic giant in the world. But, most importantly, these continued rules, mandates, legislations, etc.,…. will quickly, if not already, requiring us to change our moniker….. no longer the home of the free.

Billy P July 30, 2011 at 10:41 pm

This is an improper use of the phrase “begs the question.”

Stone Glasgow July 31, 2011 at 2:02 am

Yep.

Economic Freedom July 31, 2011 at 3:49 am

Better, perhaps:

“I don’t doubt the truth of Ms. Piallat’s account. But it invites the question: why did she not offer paid sick-leave to her employees on her own?

ArrowSmith July 30, 2011 at 11:04 pm

I don’t understand why there is a special law that exempts wait-staff from minimum wage. Either abolish the min. wage or get rid of the exemptions.

Stone Glasgow July 31, 2011 at 2:03 am

Restaurant lobby groups won the battle against the unions.

ArrowSmith July 31, 2011 at 2:34 am

There’s a wait-staff union?

ArrowSmith July 31, 2011 at 2:35 am

SEIU?

Stone Glasgow July 31, 2011 at 3:41 am

There is always a union trying to gain government support, and the minimum wage is one of the main ways that any union succeeds in raising the wages of its members (and stealing some of those wages via membership dues).

The SEIU appears to be the current player attempting to profit from food-service workers, yes.

Susan July 31, 2011 at 9:35 am

I am a flight attendant, American Airlines, grappling with a draconian and
unrealistic sick leave policy. Even though I have accrued sick leave hours,
I cannot use them without disciplinary action should I exceed one sick occurrence within a twelve month rolling period unless I submit a ‘doctor’s note’.

This policy encourages people to work while sick, infecting coworkers as well as passengers. Just consider the confined environment and minimal
air-exchange in an aircraft up to 14 hours aloft. Would you, as a passenger willingly risk exposure to what we formerly referred to as ‘germs’?

persiflage July 31, 2011 at 2:13 pm

Oh good grief! If you’re sick, get the doctor’s note.
At work, I get accruals of sick leave. If I want to use those hours, I must apply to take sick leave, provde the reason for such, and get the leave approved!
I don’t find this an unreasonable imposition for the benefit of paid sick leave.

Dan J July 31, 2011 at 3:48 pm

Indeed, get the sick note. Oh, how funny (or sad)……. employees will need a sick note, and under Obama care, you are likely to wait weeks or months to see a doctor……. hhahahahhahahahah…..aaaahhhhhh….ssiiiggghhh……..I shall begin crying now…….

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