The unequal power relationship that characterizes many employment relationships is characteristic of industrialized capitalism. Capitalism itself is defined by the manufacturing division of labor, which systematically divides the work of economic production into limited operations. The result is that no one man in the Capitalist system would know how to produce a good from start to finish, destroying the traditional notion of occupations, e.g. artisans or craftsmen.
Because each worker is only qualified to perform a particular, often narrow, task which creates no value in itself but must be combined with the fruits of other tasks by the Capitalist, the worker is at the mercy of the Capitalist who owns the means of production. The dominant mode of employment arising from the manufacturing division of labor is wage labor. In wage labor, a worker does not work to improve his own property, as with agricultural labor. Rather, the worker, who does not own the means of production in capitalist society, works for wages alone
The capitalist system results in an exploitative relationship between the employer and the hordes of wage laborers eager to work at any wage the market can bear, that the employer can get away with. Because all wage labor is directed at a narrow aspect of the production process, wage laborers can be moved and switched around without compromising the production process. The manufacturing division of labor splits the production process up to where there will be many workers qualified to perform one particular task, but none who can perform every task.
This gives the employer enormous bargaining power over the wage laborer. The wage laborer must seek an employer who can make value of the narrow task which the laborer is qualified to perform. The employer, who can choose between numerous wage laborers, can set his wages as low as the market will accept, or as low as the lowest wage sustained by other employers at the time. As illustrated in Adler's example of the maquila Balbina, many in society consider any type of job, no matter how unpleasant or underpaid, a gift, an "answered prayer" as Balbina put it. (Adler, 15). Employment is such a gift in these economies that employers can even put employees through a probationary period, even though the cost of hiring an inadequate worker (considering the low-level of skills to be trained) is very little. Even foreign workers residing in the United States experience the effects of bargaining, as in Bowe's case of local economies such as Florida. Foreign workers are often desired because and expected to work twice as hard as the average American for less pay and without complaint, as the case of the Indian welders demonstrated. (Bowe, 77).
Discussion and Evaluation of Measures to Balance Unequal Power Relationships
The unequal power relationship in industrial capitalist society is rooted in the unequal bargaining positions between employers and employees in the employment market The organization of labor is a natural check on the superior bargaining power of the employer. Through organizations such as labor unions, employees can utilize their greatest, and often only bargaining chip, their willingness to work. Labor organizations allow employees to present this asset in force, the most visible exercise of which is a labor strike. Labor unions are often the most effective means for balancing the bargaining positions of employers and employees because they are the most natural means. They are a result of organization among a particular group of bargainers in the market. Organized labor does not require government intervention to implement, though it often requires government protection against suppression.
Organized labor has a major potential drawback to overall economic productivity because its primary instrument, the strike, stops production by certain employees. Such production may be harmful or disruptive to the overall economy as well as to the employer itself. Considering the undesirable loss of income suffered by employees, even members of labor unions, strikes are a very rare last resort, especially in an exploitative economy. Strikes prevent themselves in a sense and should not be seen as a necessary, or even likely, consequence of labor organization. The effect on overall economic production an economy is rarely, if ever, affected by strikes. Also, strikes can be averted by negotiation in advance or discontinued through judicial injunctions. Thus, the proliferation and development of labor organizations is, overall, a skillful means for balancing unequal employment relationships without compromising the activity of the market.
Another check on the bargaining power of employers is contract law, which may be considered. In certain legal regimes, such as Anglo-American contract law, employers are prohibited from holding employees to duties arising from illegal contract terms. Contract terms can be held illegal because of unequal bargaining positions or duress, for example, absolving employees from performing the duties under contract or remedying non-performance. Contract law, for example, would allow an employee to not perform work already paid for.
However, contract law is only effective when the employee still has something the employer wants, especially labor or money. When the employee does not have anything in particular that the employer wants and cannot get elsewhere without a loss, contract law is less effective in balancing the power relationship. When there is a labor surplus, the employer does not require any particular unskilled employee's service and will use the courts to obtain it, making contract law ineffective for employees in most employment situations.
Labor Conditions Laws
Laws which regulate working conditions put a more indirect check on ability of the employer to capitalize on its inherent bargaining power. Laws regulating working conditions take a number of forms, but most often regulate pay, conditions, time, and eligibility. Wal-Mart's refusal to pay government-mandate overtime and part-time employment to avoid benefits is one notable example. (Ehrenreich, 165). Organizations such as Jobs with Justice and Working America build political influence to alleviate the effects of exploitative employment and advocate for laws to prevent it. (Ehrenreich, 169). Some laws are designed to prevent employers from taking advantage of vulnerable or desperate bargainers, such as foreigners.
Typically, an employer has absolute freedom in determining working conditions as long as they do not violate the employee's bodily liberty or property rights. This is especially true if they are somehow provided for in an employment contract, which demonstrates worker consent to the conditions. Many employers take advantage of this freedom to provide the least costly working environment possible, by foregoing safety equipment, adequate training, or prohibiting rest on the job, for example. The employer would usually be prevented from doing this by the employee's prerogative to quit, but not when there is a surplus of labor. The freedom to determine workings conditions, then, is the fruit of superior the employer's superior bargaining power, where the employee must endure because she does cannot or will not quit because of the lack of better employment options. Labor laws, then, close off certain abuses of superior bargaining power.
Labor laws are only an effective check on the power of employers if those employers actually comply with those laws. When employers do not comply, as in Bowe's modern slavery examples, and are not punished for non-compliance, this check is no longer effective. (Bowe, Employers may operate as if the law did not exist and potential employees, out of ignorance of the law or desperation, concede to the "realities" of their employment market and take whatever terms the employer gives. (Adler, 15).
Many of the measures proposed to balance unequal power relationships in modern economies operate by restraining the bargaining power or the abuse of it by employers. They either interfere with natural market forces, primarily bargaining, under the Capitalist mode of industrial organization. In some ways, they are checks on pure Capitalism, designed to reduce its worst excesses.
In evaluating measures, it is impossible and unwise, however, to try to conclude whether such checks on the "market" are morally, ethically, or philosophically right or wrong. After all, similar checks were implemented by sovereign governments during the feudal stage of economic organization to correct similar abuses of authority by landowners over serfs. The Feudal system of economic organization and its practices are now considered primitive and unethical, though Bowe's description of "modern slavery" indicates otherwise. Perhaps more significant is that such measures were implemented only after crises which threatened the stability of a society, a fact that is instructive when pondering the health of our current system of socio-economic organization.
Whereas influential economists such as Marx tend to simplify social leverage based on property, it is important to consider other factors. Whereas Marx believed that power grew out of property. The sociologist and cultural historian, pointing out that social authority is based not only on property, but on status and power. For example, status is a major factor in the employment of African-American workers in the United States. The traditional social status of African-Americans as an underclass necessary for agricultural labor as well as their concentration in…