Free To Choose: a personal Statement

particular unions or employers, and a source of jobs for bureau-
crats, while reducing the opportunities and incomes of the ordi-
nary worker. OSHA is a prime example—a bureaucratic night-
mare that has produced an outpouring of complaints on all sides.
As a recent joke has it: How many Americans does it take to
screw in a light bulb? Answer: Five; one to screw in the bulb,
four to fill out the environmental impact and OSHA reports.
Government does protect one class of workers very well,
namely, those employed by government.
Montgomery County, Maryland, a half-hour's drive from
Washington, D.C., is the home of many senior civil servants. It
also has the highest average family income of any county in the
United States. One out of every four employed persons in Mont-
gomery County works for the federal government. They have
job security and salaries linked to the cost of living. At retire-
ment they receive civil service pensions also linked to the cost of
living and independent of Social Security. Many manage to
qualify for Social Security as well, becoming what are known as
double dippers.

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244
FREE TO CHOOSE: A Personal Statement
Many, perhaps most, of their neighbors in Montgomery County
also have some connection with the federal government—as con-
gressmen, lobbyists, top executives of corporations with govern-
ment contracts. Like other bedroom communities around Wash-
ington, Montgomery County has been growing rapidly. Govern-
ment has become a highly dependable growth industry in recent
decades.
All civil servants, even at low levels, are well protected by the
government. According to most studies, their salaries average
higher than comparable private salaries and are protected against
inflation. They get generous fringe benefits and have an almost
incredible degree of job security.
As a Wall Street Journal story put it:
As the [Civil Service] regulations have ballooned to fill 21 volumes
some five feet thick, government managers have found it increasingly
difficult to fire employees. At the same time, promotions and merit
pay raises have become almost automatic. The result is a bureaucracy
nearly devoid of incentives and largely beyond anyone's control. . . .
Of the one million people eligible last year for merit raises, only
600 didn't receive them. Almost no one is fired; less than 1% of fed-
eral workers lost their jobs last year.)
1
To cite one specific case, in January 1975 a typist in the En-
vironmental Protection Agency was so consistently late for work
that her supervisor demanded she be fired. It took nineteen months
to do it—and it takes a twenty-one-foot-long sheet to list the
steps that had to be gone through to satisfy all the rules and all
the management and union agreements.
The process involved the employee's supervisor, the super-
visor's deputy director and director, the director of personnel
operations, the agency's branch chief, an employee relations
specialist, a second employee relations specialist, a special office
of investigations, and the director of the office of investigations.
Needless to say, this veritable telephone directory of officials was
paid for with taxpayers' money.
At state and local levels the situation varies from place to
place. In many states and in large cities such as New York,
Chicago, and San Francisco, the situation is either the same as or
more extreme than in the federal government. New York City

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Who Protects the Worker?
245
was brought to its present state of virtual bankruptcy largely by
rapid increases in the wages of municipal employees and, perhaps
even more, by the granting of generous pensions at early retire-
ment ages. In states with big cities, representatives of public em-
ployees are often the major special interest group in the state
legislature.
NO ONE
Two classes of workers are not protected by anyone: workers who
have only one possible employer, and workers who have no pos-
sible employer.
The individuals who effectively have only one possible em-
ployer tend to be highly paid people whose skills are so rare and
valuable that only one employer is big enough or well enough
situated to take full advantage of them.
The standard textbook example when we studied economics
in the 1930s was the great baseball hero Babe Ruth. The "Sultan
of Swat," as the home run king was nicknamed, was by far the
most popular baseball player of his time. He could fill any
stadium in either of the major leagues. The New York Yankees
happened to have the largest stadium of any baseball club, so it
could afford to pay him more than any other club. As a result,
the Yankees were effectively his only possible employer. That
doesn't mean, of course, that Babe Ruth didn't succeed in com-
manding a high salary, but it did mean that he had no one to
protect him; he had to bargain with the Yankees, using the
threat of not playing for them as his only weapon.
Individuals who have no choice among employers are mostly
the victims of government measures. One class has already been
mentioned: those who are rendered unemployed by legal mini-
mum wages. As noted earlier, many of them are double victims
of government measures: poor schooling plus high minimum
wages that prevent them from getting on-the-job training.
Persons on relief or public assistance are in a somewhat similar
position. It is to their advantage to take employment only if they
can earn enough to make up for the loss of their welfare or other
public assistance. There may be no employer to whom their ser-

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246
FREE TO CHOOSE: A Personal Statement
vices are worth that much. That is true also of persons on Social
Security and less than seventy-two years old. They lose their
Social Security benefits if they earn more than a modest amount.
That is the major reason why the fraction of persons over sixty-
five years old who are in the labor force has decreased so sharply
in recent decades: for males, from 45 percent in 1950 to 20 per-
cent in 1977.
OTHER EMPLOYERS
The most reliable and effective protection for most workers is
provided by the existence of many employers. As we have seen,
a person who has only one possible employer has little or no
protection. The employers who protect a worker are those who
would like to hire him. Their demand for his services makes it
in the self-interest of his own employer to pay him the full value
of his work. If his own employer doesn't, someone else may be
ready to do so. Competition for his services—that is the worker's
real protection.
Of course, competition by other employers is sometimes strong,
sometimes weak. There is much friction and ignorance about op-
portunities. It may be costly for employers to locate desirable em-
ployees, and for employees to locate desirable employers. This
is an imperfect world, so competition does not provide complete
protection. However, competition is the best, or, what is the same
thing, the least bad, protection for the largest number of workers
that has yet been found or devised.
The role of competition is a feature of the free market that we
have encountered time and again. A worker is protected from his
employer by the existence of other employers for whom he can
go to work. An employer is protected from exploitation by his
employees by the existence of other workers whom he can hire.
The consumer is protected from exploitation by a given seller by
the existence of other sellers from whom he can buy.
Why do we have poor postal service? Poor long-distance train
service? Poor schools? Because in each case there is essentially
only one place we can get the service.

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