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The Problems with Criminalizing Cutting an Employee's Hours

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A bill has been proposed in Oregon to criminalize cutting a worker's hours to avoid paying health benefits. The question is, what are the likely effects of this bill? Apart from the obvious, workers immediately not having their hours cut or job lost due to this law, here are the others, and they will make someone think twice before deciding whether it's a good law:

1. Attrition. No matter how many laws and voices try to ignore this simple truth, it cannot be avoided: a job will not exist if the required payment to it is less than its contribution. If firing someone because the job now costs too much is a crime, people might not get fired. However, when they leave, they won't be replaced, or they will be replaced with someone who has the reduced hours to prevent triggering the health care obligation. All such a law really does, then, is delay the cutting of hours.

2. Greater unemployment. A corollary of the attrition is that less jobs will be available. People will not get fired, but companies won't hire replacements, therefore greater unemployment

3. Less chances for workers. Although employers will not be allowed to directly fire workers due to cost, it can be made up in other ways. Such ways include reducing the time an employee has in training, which harms the workers' prospects of being retained. Another way is, if an employee messes up or breaks a rule, an employer might have otherwise been inclined to grant the worker another chance, but with the greater cost, the employer is now more likely to fire the worker. This increases the likelihood the worker will have no job.

4. Decrease in the quality of employment. Given the attrition and less hiring by companies, employers can now get away with cutting costs elsewhere that reduce the employees' quality of employment. Because those workers do not have a similar job available elsewhere, the employer is subject to less competition for workers. This results in more power for the employer, not less.

In short, an increase in attrition, unemployment, and a decrease in chances for workers and in the quality of their employment are negative consequences of such a law, and should make someone think twice before supporting it.



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