Well-meaning laws for predictable scheduling may backfire

By Aparna Mathur of AEI. Excerpt:

"Flexibility in the workplace is valuable to maintaining a healthy work-life balance. According to a report from the Bureau of Labor Statistics, many people choose to work irregular or alternate schedules precisely because it allows them to accommodate other needs, including schooling and childcare. For others, the choice is involuntary and driven by their inability to find a different job. For others, the incentive to earn a “shift premium” offered by employers makes them choose jobs with alternate or irregular shifts.

But flexibility is not only valuable to employees. On the flip side, research into employer practices shows that there are sound economic and business reasons for why managers seek workers who are willing to accept these types of schedules. Firms and managers typically use part-time and hourly workers to match variations in demand.

This is particularly true in the retail sector with its seasonal variations in demand, and managers often have to make decisions about staffing based on how many customers they expect on a weekly or even hourly basis. Management practices, such as last-minute posting of work schedules, real-time adjustments and variations in hours allotted to workers each week allow firms the flexibility to change staffing needs in anticipation of demand.

While these practices obviously add unpredictability to workers’ lives, there is evidence that managers try to reduce the effects of instability on workers by offering them some decision-making ability. For instance, studying 88 non-production jobs in hospitality, retail, transportation and financial services, Susan Lambert reports that managers often try to give employees control over their hours by allowing them to volunteer for overtime or reduced hours and by keeping lists of workers who would like to be called in for additional hours at the last minute.

Another study that surveyed employees reports that many employees, especially working parents, get support from their supervisors. In addition, informal relationships with supervisors enable greater control over employee scheduling needs.

Predictable scheduling laws are obviously well-intentioned. But given that unpredictability is driven in large part as a response to changing business conditions, imposing a uniform federal policy on all employers will hurt businesses, but the costs will also be borne by workers.

The higher costs of business operations may lead to workers being provided fewer hours of work every week and could hurt their ability to negotiate unplanned absences for themselves. It seems that encouraging workers and managers to work informally and directly might be the best option for both employers and employees.

It is also worth noting that predictable scheduling laws are being discussed in cities and states where there is already a push to hike minimum wages to levels well above those that exist today. The combined effects of higher direct wage costs and reduced flexibility for employers is particularly worrying because the intended beneficiaries of these policies — low-skill, low-wage workers — also occupy the jobs most vulnerable to automation.

A recent article highlights the significant challenges such routine jobs, particularly in retail, face from technology. Two-thirds of U.S. retail jobs are at “high-risk” of disappearing by 2030. While technological change and displacement of certain jobs may be largely inevitable, raising the difficulty and costs of employing low-skill workers may accelerate the process.

As I have written earlier, expanding the Earned Income Tax Credit is a far better alternative to raising the minimum wage. It helps low-wage workers, and it does not impost new costs on employers.

The long-term goal of helping low-wage workers succeed in the labor market requires that we not make short-sighted decisions on policy. Employees will be better off with predictable schedules and higher wages, but not when they are mandated as new costs on businesses."