The Glorious Freedom to Leave

It's more important than you think.

In the US, research showed few American employees realise that the law affords them almost no protection against discharge. Many commentators and employment law professors consider this unjust.

They cite inequality in bargaining power and asymmetric information between employers and employees as serious problems to be fixed. However, it takes seconds to realise a lack of quality in bargaining power is all around us. Phrased more simply, it means some people can offer more than others. It's why we have a price mechanism - rarely can I trade the thing I want to get rid of for the product or service I want from you because, most of the time, they aren't of equal value. We evolved past a barter system for a reason.

Employees predominately benefit from an information asymmetry because more people exit the labour market. If everyone had perfect information, the supply would increase, and wages would fall.

Other aspects of life share these same "flaws". In dating, an attractive actor has more bargaining power than an unattractive single mum. Nor do either people in a relationship share perfect information. Nobody sane proposes restricting the actor's freedom to date because of his high mate-market value, and the same should be true of a CEO in the labour market.

At the end of the day, "if you don't like it, leave" sounds cold, but it's true. In either case, whether breaking up or quitting, most people can make a choice. Employers will circumvent the government's misguided efforts to correct power and information disparities in employment anyway. When the law requires employers to provide a benefit, they'll cut wages or hire fewer people.

What's happening with this, as with many issues, is mood affiliation. People resent their bosses, and they grasp any argument that might reduce employer power, like a loaf of bread during a famine. Exercise your right to leave - you shouldn't take it for granted.