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Who’d a-Thunk It?

Mandated family leave and other ‘benefits’ for workers have ill consequences that offset – and, likely, more than offset – for workers the mandated benefits.  (HT Cyril Morong)


Once again, contract terms are not arbitrary.  Even if party A has a stronger bargaining position than does party B, as long as party B is not forced to contract with party A, any contract between party A and party B will be mutually advantageous.

Further, no third party knows enough to intervene into this contract in order to arbitrarily change the terms in ways that make party B better off.  Because in all real-world exchange relationships the number of different margins along which contracts are made is large, when a third-party arbitrarily changes one term of the contract – say, giving party B paid family leave – party A and party B have incentives to change some other contract term or terms to offset the change in the first contract term.  And because this new set of contract terms was available to A and B before the forced change, we can conclude that the new set of contract terms is not as mutually beneficial as was the first set – and also that this new set of contract terms might well be less attractive even to party B than was the first, now illegal set of terms.  It is indisputably and outrageously arrogant for a third party to conclude that party B’s well-being is improved now that B has a greater benefit on margin L (an increase in that benefit forced by the state) even though B’s benefits on margins W and T worsen as a consequence.


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