Copyright 2014-2017 David R. Henderson
Selected Content
Testimony on Homework given before the
US Dept of Labor, Wage and Hour Division
Related to Chapter 6, Freedom of Association
The following is the testimony I gave on homework before the Wage and Hour Division of the U.S. Department of Labor on February 17, 1981.
Good afternoon, Mr. Chairman and Members of the panel. I am David R. Henderson, Visiting Assistant Professor of Economics at the University of Santa Clara in Santa Clara, California. I am here today to present my views and the position of the Council for a Competitive Economy on the regulations governing the employment of homeworkers. The Council for a Competitive Economy is a national membership organization of businesses and individuals dedicated to the maintenance of a free market economy, distorted neither by taxes and regulations such as the one we are debating today, nor by special privileges, economic protection or subsidies for business or labor. I am speaking today on behalf of the Council’s membership of over 1,000 companies and individuals nationwide.
Our position is that the regulations on homework should be repealed. People should be free to work in their homes if they wish to do so and if they can find willing buyers for their products. This is a basic freedom that people should have. To deny them this is to deny one of their fundamental human rights.
By denying some people, and allowing others, the freedom to work in their homes, the current regulations create a society of caste and privilege. Why should the government be able to tell ladies who knit sweaters that they cannot work in their homes while allowing writers, academics, photographers, computer programmers, keypunch operators, and many others to work in their homes as much as they wish? Why should people be discriminated against simply because they work in one of seven apparel and craft industries?
The current regulations against homework could well deny livelihood to some of these ladies from Vermont. Many of them have small children and would find it difficult to work in a normal factory. They would have to drive to work, which would mean spending money on gasoline and automobile maintenance, and would have to pay for child care. They would almost certainly end up with a lower net wage than they now get. How can these regulations be justified as a way of protecting the minimum wage, when the effect of their enforcement would be to lower these women’s wages? Many of the women will find that it is not worthwhile to work and to pay automobile and childcare expenses and will not work at all. Not only will they not earn the minimum wage; they will be paid nothing. These regulations, whose only justification under the Fair Labor Standards Act is to “safeguard the minimum wage rate” will end up achieving the opposite of their intended effect by lowering the real wages these women in Vermont receive, in some cases to zero. They may even force some of them to go on welfare.
Moreover, the regulations, by imposing costs on homework, reduce the number of homework contractors and reduce the demand for labor. This drives down even more the wages of those who still manage to find work, which is also the opposite of the law’s intent.
The regulations against work in the home are justified by some as a way of protecting workers from exploitation. That justification does not make sense. The fact that some of the women in Vermont went to tremendous expense to come down here to testify is powerful evidence that they not think they are being exploited. They see the chance to work in their homes as an opportunity, and the regulations as a restriction of their opportunities. Mr. Rosenfeld, the lawyer representing many of the large apparel firms, argued this morning that the opportunities that homework gives these people are just like the opportunities the poor and rich have to sleep in the park. We can all agree that the poor have fewer opportunities than the rich—that’s what it means to be poor. But what is his solution? To deny them one of the few opportunities they have. He was saying to poor people, in effect, “You women have only a few opportunities. You would have chosen one of them. We will prevent you from choosing that one.” He argued that if the regulations remained, people in places besides Vermont, in places like the tenements of Harlem, will also enter the industry. And he’s right. But that’s good for them, not bad for them. If these regulations remain, they will hurt those people in Harlem, not help them. Moreover, if the people in Harlem and elsewhere get these jobs, they will get on the first rung of the economic ladder and be better able to make the transition to mainstream economic life. Even the wording of the regulations against homework implies that the people who wrote them knew that these regulations could hurt homeworkers: 29 CFR Part 302 (a) grants an exception to the prohibition on homework when it “shall result in unusual hardship to the individual homeworker.” To admit the possibility that the prohibition can cause unusual hardship is implicitly to admit that it causes usual hardships.
It is true that not all of the Vermont women currently working in their homes will be completely destitute as a result of these regulations. Some will be able to find jobs in factories. Yet, they too will lose an important freedom—the freedom to work in their homes. They show by their decision to work at home that they regard homework as their best alternative. These regulations deny them that alternative. No longer will they be free to work at their own pace, taking breaks as long as they want and when they want. Instead they will be regimented into nine-to-five jobs with standardized lunch and coffee breaks. No longer will they be able to look after their children. Instead, they will have to turn their children over to others.
Recently, I saw the movie, “Nine to Five,” and I and millions of others responded strongly to its message: that secretaries and workers in general are human beings with dignity and should be treated as such, and that they should be given as much freedom as possible consistent with getting the work done. As I left the movie theater, a woman handed me a pamphlet which stated that the AFL-CIO was fighting, and would fight, to protect the rights and dignity of workers. These ladies in Vermont have figured out their own best solution—to work in their homes. Yet the AFL-CIO representatives testified at the hearings in Vermont last month in favor of restricting homework and in favor of forcing these women out of their homes and into nine-to-five factory jobs. How ironic! And how hypocritical!
The representative from the International Ladies’ Garment Workers Union (ILGWU) argues that restrictions on homework are needed to protect union workers from competition. This is the same argument that Mr. John O’Malley of the AFL-CIO used at the hearings in Vermont last month. But nowhere in Section 211(d) of the Fair Labor Standards Act does it say that protection from competition is a goal of the Act, or a justification for homework restrictions. Why should they be exempt from competition? Why should some workers have a privileged position over others? If protection from competition justifies forcibly preventing women from knitting sweaters in their home, they why shouldn’t the government go further and prevent people from mending their own sweaters? That would protect ILGWU workers from competition also, since consumers would be more inclined to buy new sweaters. Nobody would argue for prohibiting sweater mending, but the principle is the same. In both cases, the government helps a privileged group by using its coercive power to prevent people from engaging in peaceful pursuits.
If the ILGWU persuades you to keep these restrictions, they will have succeeded in protecting their members from competition. They will also “protect” their own members from having the opportunity to try working in their homes. It is possible that some rank-and-file members of the ILGWU would like to work at home also. After all, garment workers are human and a number of them might like to make their jobs more interesting and look after their children in their homes. We cannot just take the word of the union’s leaders that workers don’t have this desire. The ILGWU leaders have a captive membership, because they enjoy the legal status of “exclusive bargaining agent” in those shops where they have been certified. If 51 percent of the workers at a plant vote to be represented by the ILGWU, then the other 49 percent are forced to submit to that “representation.” In what sense can it be said that the ILGWU represents them?
For many years, we have heard about alienation of workers due to their being little cogs in a big machine. Most of us, I think, have had that feeling at one time or another, and many of us, including union members, would like to be independent. The opportunity to work in their homes gives people this chance. Alvin Toffler argues in his book, Future Shock, that the next great industrial revolution will involve large numbers of people working in their homes. He points out that this will strengthen family ties that have become weak in our modern world. If the Secretary of Labor does not choose to liberalize the homeworker regulations, he will be turning the clock back to the working conditions of a previous decade.
The Secretary will be hurting many people like the women here today, and other men and women who do not even know that these hearings are taking place. He will make it more difficult for many women to rear and influence their children. He will be telling them, in effect, that this government does not value hard work and independence, and that the only way they can improve their lot is to come like a beggar—or a Chrysler executive[1]—asking for alms. He will also hurt many union members, even members of the ILGWU, who would like to have an alternative to what they see as a daily grind and who might like to have a bigger role in rearing their children. Yet, if the Secretary allows people the freedom to choose their workplace, he will affirm the value of hard work, independence and family ties, and the importance of each individual’s right to choose.
Thank you. I would be pleased to answer any questions.
