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Full-Text Articles in Business
The Myth Of Equality In The Employment Relation, Aditi Bagchi
The Myth Of Equality In The Employment Relation, Aditi Bagchi
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Although it is widely understood that employers and employees are not equally situated, we fail adequately to account for this inequality in the law governing their relationship. We can best understand this inequality in terms of status, which encompasses one’s level of income, leisure and discretion. For a variety of misguided reasons, contract law has been historically highly resistant to the introduction of status-based principles. Courts have preferred to characterize the unfavorable circumstances that many employees face as the product of unequal bargaining power. But bargaining power disparity does not capture the moral problem raised by inequality in the employment …
Passive Discrimination: When Does It Make Sense To Pay Too Little?, Jonah B. Gelbach, Jonathan Klick, Lesley Wexler
Passive Discrimination: When Does It Make Sense To Pay Too Little?, Jonah B. Gelbach, Jonathan Klick, Lesley Wexler
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Economists have long recognized employers’ ability to construct benefits packages to induce workers to sort themselves into and out of jobs. For instance, to encourage applications from individuals with a highly valued but largely unobservable characteristic, such as patience, employers might offer benefits that patient individuals are likely to value more than other individuals. By offering a compensation package with highly valued benefits but a relatively low wage, employers will attract workers with the favored characteristic and discourage other individuals from applying for or accepting the job. While economic theory generally views this kind of self-selection in value neutral terms, …