Introduction

A: Setting the Scene

Adkins: Views employment as a mutually beneficial private contract between two competent; attempts to regulate this relationship are viewed with skepticism

• Freedom of employment contracting “is as essential to the laborer as to the capitalist, to the poor as to the rich; for the vast majority of persons have no other honest way to begin to acquire property, save by working for money.”

• The ethical right of every worker to a living wage is conceded. But this right does not justify a minimum wage law, because this right does not imply a duty on the employer to provide that wage. Employer’s duty is to pay wages that are a “fair equivalent for the service rendered”

  • An employer who pays market value does not cause poverty of the worker, he alleviates it at least to some extent. If wage insufficient, look to society at large to redistribute wealth.

West Coast Hotel: Views employment as a contract animated by unequal bargaining power. Thus, it is legitimate for the government to intervene to equalize the parties’ bargaining positions.

• Employers lay down the rules and laborers are practically constrained to obey them. In such cases, self-interest is often an unsafe guide to fairness and the legislature may properly impose its authority.

• “The exploitation of a class of workers are in an unequal position with respect to bargaining power and are thus relatively defenseless against the denial of a living wage is not only detrimental to their health and well being but casts a direct burden for their support upon the community. What these workers lose in wages the taxpayers are called upon to pay.” The community is not bound to provide what is in effect a subsidy for unconscionable employers.

Four stylized Approaches to Employment Relationship:

1. Free and Equal Contracting View. Employment relationship is a private contract between two free and equal private parties and we should be skeptical of any government intervention that interferes with the free bargaining power. Adkins.

2. Asymmetrical Contracting View. Employment relationship is a contract defined by such asymmetries of power that the legislature should intervene to balance power asymmetries. West Coast Hotel.

3. Third-Party Public View. Employment may be based in private contractual relationships but these relationships profoundly impact the public. If contract calls for too low a wage, the public will be burdened, so legislature has right to intervene

4. Public Institution View. Employment relationship is NOT a private contractual relationship. Instead, employment is a public institution. It is not at some fundamental level the same as any other transaction. It inherently implicates the public and is inherently subject to public regulation. It is perfectly legitimate to enlist regulate this relationship to institute broad public policy goals. Subsistence policy, nondiscrimination norms, family policy, and immigration policy.

B: Who is an Employee?

Lauritzen:...

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