Monday, September 30, 2013

Sometimes They Capitalize... Again

Labor market regulations are curious beasts. via Ed Lopez, French hardware firm Leroy Merlin has plopped itself in the middle of an elites-vs-commoners hue & cry over Gallic Blue Law.

Sometimes, labor market interventions are transformed into capital structure changes. Cesar Chavez saw to it with the might of the UFW behind him that field worker wages were pinned higher than the market would bear. Unsurprisingly, farmers stopped hiring as much migrant labor and turned to machines to do many of those low marginal product jobs. The intervention was capitalized.

Probably not so with Sunday prohibitions. These aren't, as the game theorist might say, evolutionarily stable. Nor is there a coordination failure that I can see. Individual firms probably wouldn't lose permanent business if they were to shutter their doors once a week.

Labor is not euvoluntary, but the Sunday exception seems odd even in a Catholic country. It ought to be up to the individual conscience of the worker if they're willing to set aside a day for rest.

I think. I might be wrong. I may have missed the part in the Bible where it said something about the king keeping the Sabbath day holy.

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Do you have suggestions on where we could find more examples of this phenomenon?