Why do American workers tolerate 'At-Will' employment?

[bilby]

Because they simply cannot believe that it could possibly be allowed to be as awful as it actually is.

According to Pauline Kim, a professor at Washington University Law School, people tend to make inferences about the law based on what they know about more informal social norms. This frequently leads them to misunderstand their rights—and in areas like employment law, to wildly overestimate them. In 1997, Kim presented roughly 300 residents of Buffalo, New York, with a series of morally abhorrent workplace scenarios—for example, an employee is fired for reporting that a co-worker has been stealing from the company—that were nonetheless legal under the state’s “at-will” employment regime. Eighty to 90 percent of the Buffalonians incorrectly identified each of these distasteful scenarios as illegal, revealing how little they understood about how much freedom employers actually enjoy to fire employees. (Why does this matter? Legal scholars had long defended “at-will” employment rules on the grounds that employees consent to them in droves without seeking better terms of employment. What Kim showed was that employees seldom understand what they’re consenting to.)

(Source).

This is just one example, from an article by David Dunning, of erroneous confidence; there is a thread to discuss the major theme of the article here.

It seems that even people whose employment is 'At-will' do not understand just how few rights they have as an employee, until and unless they are capriciously or wrongfully dismissed - leading to their toleration and even support of a system that they would neither tolerate nor support if they understood it.

 

[Trausti]

It is ridiculous that employees can quit whenever they want for whatever reason.

 

[bilby]

It is ridiculous that employees can quit whenever they want for whatever reason.

Perhaps.

But it is ridiculous to consider an employee to be an an equal footing with his employer in this regard (which is the implicit assumption in 'At-will' employment).

The harm done to a company if an employee quits for no reason and without notice is not even close to equal to the harm that is done to an employee if a company fires him for no reason and without notice.

Here in the civilised world, employees who quit without notice are not treated equally to those who give notice before leaving; and employers cannot fire an employee for no reason and without notice. 'At-will' is fucking stupid, and detrimental to both parties - but it is far more detrimental to employees than to employers.

 

[Axulus]

It is ridiculous that employees can quit whenever they want for whatever reason.

Perhaps.

But it is ridiculous to consider an employee to be an an equal footing with his employer (which is the implicit assumption in 'At-will' employment.

The harm done to a company if an employee quits for no reason and without notice is not even close to equal to the harm that is done to an employee if a company fires him for no reason and without notice.

That depends on the position of the employee and size of the company. I have seen small businesses take a nosedive when they lost a key executive/manager (usually an active owner who sells their stake and moves on), eventually causing other people to lose their jobs as a result of the downturn.

 

[bilby]

Perhaps.

But it is ridiculous to consider an employee to be an an equal footing with his employer (which is the implicit assumption in 'At-will' employment.

The harm done to a company if an employee quits for no reason and without notice is not even close to equal to the harm that is done to an employee if a company fires him for no reason and without notice.

That depends on the position of the employee and size of the company. I have seen small businesses take a nosedive when they lost a key executive/manager (usually an active owner who sells their stake and moves on), eventually causing other people to lose their jobs as a result of the downturn.

Sure, there are always exceptions; but they are, well, exceptional.

As a general rule, it is the employee who typically has the most to lose, often by a very large margin.

And as the article quoted in the OP suggests, a major reason why employees tolerate 'At-Will' employment is that they falsely believe that they have legal recourse if they are unjustly dismissed.

 

[Trausti]

There are other things to consider: http://www.nytimes.com/2011/10/20/business/smallbusiness/managing-unemployment-premiums-in-a-time-of-joblessness.html?_r=0

 

[Axulus]

That depends on the position of the employee and size of the company. I have seen small businesses take a nosedive when they lost a key executive/manager (usually an active owner who sells their stake and moves on), eventually causing other people to lose their jobs as a result of the downturn.

Sure, there are always exceptions; but they are, well, exceptional.

As a general rule, it is the employee who typically has the most to lose, often by a very large margin.

And as the article quoted in the OP suggests, a major reason why employees tolerate 'At-Will' employment is that they falsely believe that they have legal recourse if they are unjustly dismissed.

The real benefit of "At-Will" employment are for those who are looking for a job (which is everyone who ever wants a job at some point in their lives). A company is far more likely to hire someone if they know they can be dismissed at will.

This makes it easier to quit one's job since it is far more likely other options are available. Unemployment is reduced. Economic efficiency increases (inefficient sectors easily shed jobs and growing sectors make attractive offers to gain workers), meaning there is more wealth for society, and more tax money collected to pay for government services.

I completely agree we should properly educate people on the benefits and dispel the myths.

 

[GenesisNemesis]

It is ridiculous that employees can quit whenever they want for whatever reason.

Why?

 

[Trausti]

It is ridiculous that employees can quit whenever they want for whatever reason.

Why?

I wrote that in jest. It's not ridiculous. It's economic freedom. Employers and employees should be free to make whatever arrangement they want.

 

[bilby]

Why?

I wrote that in jest. It's not ridiculous. It's economic freedom. Employers and employees should be free to make whatever arrangement they want.

As long as it is an informed decision, which the study mentioned in th OP indicates it is often not.

 

[Trausti]

I wrote that in jest. It's not ridiculous. It's economic freedom. Employers and employees should be free to make whatever arrangement they want.

As long as it is an informed decision, which the study mentioned in th OP indicates it is often not.

Eh, so what. The US may have at-will employment, but firing decisions are informed with the employer's costs to unemployment insurance in mind. I once had a colleague who put in a two-month notice in April to leave at the end of June. In the two months his projects dwindled and management didn't like him. But he knew he wouldn't be fired. It would cost more to fire him - and have the employer's unemployment tax go up - than to let him sit around for a month.

 

[bilby]

Sure, there are always exceptions; but they are, well, exceptional.

As a general rule, it is the employee who typically has the most to lose, often by a very large margin.

And as the article quoted in the OP suggests, a major reason why employees tolerate 'At-Will' employment is that they falsely believe that they have legal recourse if they are unjustly dismissed.

The real benefit of "At-Will" employment are for those who are looking for a job (which is everyone who ever wants a job at some point in their lives). A company is far more likely to hire someone if they know they can be dismissed at will.

This makes it easier to quit one's job since it is far more likely other options are available. Unemployment is reduced. Economic efficiency increases (inefficient sectors easily shed jobs and growing sectors make attractive offers to gain workers), meaning there is more wealth for society, and more tax money collected to pay for government services.

I understand this rationalisation, and I understand that it is widely held to be true; but I don't believe it, because I have never seen any support for it.

Companies hire someone if they need someone. They don't hire someone because they know it will be easy to fire him at some later date.

It is perfectly possible (and around here, quite common) to have a short probationary period of up to a few months so that new hires who don't work out can be dismissed and replaced; that eliminates the risk of being stuck with someone incompetent or insured to the position, while protecting longer term employees from unreasonable or unfair dismissal.

I completely agree we should properly educate people on the benefits and dispel the myths.

But as that doesn't happen, perhaps changing the law to bring it in line with what most citizens believe it already is (and should be) is a good idea?

If the reason people are not campaigning for change is that they misunderstand that things are not already the way they think they should be, then the right thing for legislators to do is to make the law conform to the public's expectations.

 

[bilby]

As long as it is an informed decision, which the study mentioned in th OP indicates it is often not.

Eh, so what. The US may have at-will employment, but firing decisions are informed with the employer's costs to unemployment insurance in mind. I once had a colleague who put in a two-month notice in April to leave at the end of June. In the two months his projects dwindled and management didn't like him. But he knew he wouldn't be fired. It would cost more to fire him - and have the employer's unemployment tax go up - than to let him sit around for a month.

That's a lovely anecdote.

It has fuck all to do with the thread topic, but it's lovely and heart-warming. Thanks for sharing.

If you want to discuss unemployment insurance, feel free to start a thread about it. This thread is about the gulf between employees beliefs regarding their legal rights as 'at-will' employees, and the legal reality.

 

[Togo]

Sure, there are always exceptions; but they are, well, exceptional.

As a general rule, it is the employee who typically has the most to lose, often by a very large margin.

And as the article quoted in the OP suggests, a major reason why employees tolerate 'At-Will' employment is that they falsely believe that they have legal recourse if they are unjustly dismissed.

The real benefit of "At-Will" employment are for those who are looking for a job (which is everyone who ever wants a job at some point in their lives). A company is far more likely to hire someone if they know they can be dismissed at will.

No, that's not true.

What's true is something which sounds similar - that there are a small number of positions which are very tentative, and will be filled only if the employee can be easily dismissed. In practice this is quite a rare occurance, and occurs almost exclusively with unskilled staff.

So while having easy dismissal raises employment, in a sense, what it does is quite specific - it encourages companies who do not know if they have a permenant job to hire people on a permenant basis. That doesn't meanignfully increase employment, it just transfers part-timers to full time.

The problem with doing this is the risk involved. Having an employee with a notice period is a financial risk just as buying any product is a financial risk - because you might end up paying for labour you don't need. This risk is not abstract - you can calculate the precise financial value of it, and even buy and sell it. What the legislation does is transfer the risk from the employer to employee, without compensation. Or to put it in blunter terms, 'at will' contracts are a pay cut.

So who picks up the risk? The employee might be able to sustain some instability in employment, although it represents a major cut in income, with the usual consequent depressive effects on the economy - you try not to spend money if you might lose your job tomorrow. But since this practice is so strongly concentrated amongst the poorest, least mobile, and lowest paid, its more likely that the bulk of the risk is actually transferred to the tax payer in the form of social security. So the effect of this legislation is to subsidise the business with tax dollars, and depress the economy.

And this shouldn't be surprising if you think about it. Efficient markets are good for everyone. The situation that bilby described is an inefficient market - the employees do not know the characteristics of the deal they are signing up to, which prevents them from making efficient decisions. These inefficiencies either depress the market or lead to increased taxation while the pool of labour remains constant. And the only benefit of all this is to reduce the cost to companies of being inefficient with their labour resources, and discourage them from maximising the labour they have available.

 

[Nice Squirrel]

It is ridiculous that employees can quit whenever they want for whatever reason.

Why?

This did come up in a conversation yesterday at work (from a 22 year-old) who offered the solution for our high turnover rate to force people who took the job to stay on for one year. I had to explain "at-will" before my boss picked it up and ran with it.

BTW: The high turnover is because of the low wages $17.50 and the average starting pay for this type of work is $21.00.

 

[braces_for_impact]

Companies in a position to hire but unsure of their long-term need for such people often hire temps.

I find it ironic (or tragic) that they often call states with these rules "right to work" states. "Right to terminate" would be much more accurate. Those kinds of jobs don't provide stability, or a happy workforce. These employers do not even have to state a reason for the termination, they just let you go. Something I've noticed in my area, with regards to work that relies on grants to finance the job, it's becoming common now to be hired for the length of the grant, say six months, and to walk in to work one day to find the grant money has been spent and they're letting you go two months early. Too bad, so sad.

Also, the fact that an employer does not have to provide you with any reason to terminate your employment can be a very effective cover for discrimination.

I for one (I've been working in "right to work" states for years now) feel no sense of loyalty or obligation to any employer I've worked for in some time. They want 100% from you. They want you motivated, creative, with your highly focused work ethic; they want you to work after hours, and they want you on board emotionally for whatever their current mission is. Yet they will let you go to save a dime. They'll ship your job overseas, or fire you and replace you with a cheaper counterpart, or just let you go and pile the work on someone else without further compensation. They call this a bad attitude or not being a team player. I call it a lack of respect on the part of the employer. Respect goes both ways, and I give it tentatively based on the other parties continued behavior. So no, you won't get me on board to that level. I'll do my job, and I'll do it well. I'll smile and nod and I won't criticize management in front of other employees, but I will not drink your sterile, tasteless corporate kool-aid.

I WISH I could work at a job where I'm truly valued as an employee, a contributor to the companies success, where I can be fully engaged and go all in. It would be a fun, dynamic, and pleasant atmosphere for work. Alas, most companies (especially the larger ones) simply don't do this. They throw out some bullshit "corporate culture" or "company family" games and think their employees are happy and therefore more productive, but it's all a sham. Deep down, most employees know this, and accept it.

 

[Nice Squirrel]

Just to clarify. "Right to work" is different than "At-Will"

 

[braces_for_impact]

Ah yes, I have a bad habit of using the two interchangeably, even though it's not accurate. Oops. I was pontificating about "at will" more than anything in this case.

 

[dismal]

But it is ridiculous to consider an employee to be an an equal footing with his employer in this regard (which is the implicit assumption in 'At-will' employment).

True. I've quit a lot more companies than have quit me.

 

[Horatio Parker]

That's one the reasons to regard labor as a commodity: use or not as you please.

People have rights; commodities don't.