Bryan Caplan  

Why Not Protect Workers from Customers?

You Can Always Depend on the S... Who Treats You Worse?...
Most countries have a long list of "worker protection" laws.  Laws protect workers against low pay, lack of benefits, discrimination, sexual harassment, overtime at normal pay, and much much more.  Basic labor economics teaches us to view these laws with skepticism: When you force employers to increase one kind of compensation, they can usually just cut another.  And if perchance the law genuinely increases overall compensation, it would be amazing if employment didn't fall.

Suppose, however, that worker protection laws function as intended: Shielding workers from unfair treatment with zero negative side effects.  A strange anomaly remains: Why does the law try so hard to protect workers from unfair treatment by employers, without making even token efforts to protect workers from unfair treatment by customers?  If a restaurant manager makes unwanted advances on a waitress, the law gives her the right to sue.  But if a dozen customers a day make unwanted advances on the same waitress, the law is basically silent.

This lack of symmetry is even more puzzling when you consider the economics of repeated games.  A manager interacts with each employee day after day.  A mistreated employee can therefore informally retaliate against an unfair manager in countless ways.  Indeed, fear of such retaliation is the chief explanation for ubiquitous nominal wage rigidity

Many customers, in contrast, never interact with the same employee twice - or at least interact with the same employee so rarely that amnesia sets in.  As a result, customers can mistreat employees with impunity, scoffing at the karmic adage, "What comes around, goes around."

This isn't just abstract theory; you can hear it with your own ears. Everywhere I go, I overhear employers treating workers with respect - and customers treating workers like dirt.  Most customers, to be fair, are vaguely civil.  But if 5% of your customers are rude, emotionally abusive, or worse, you probably have a bad day.  And to repeat, the law does essentially nothing to help you. 

Yes, if the same diner sexually harasses the same waitress every day, she could complain to her boss.  Under the logic of "hostile work environment" doctrine, she could threaten to sue the restaurant unless it bans the harassing customer.  But this does nothing to help the waitress against the endless stream of one-off pick-up artists who harass her daily.

You could say that the law can't protect workers from customers.  But that's not true.  The law could treat every worker-on-customer complaint like a traffic accident: You must share your identity on request to allow the legal process to move forward.  If a customer accused of sexual harassment flees the scene, the law could treat his dine-and-dash like a hit-and-run.  A less Orwellian option is to require firms to accept only credit card payments, then identify customers using their card numbers.

Now you could object that the market has already solved the problem.  When workers have to interact with unpleasant customers, employers pay extra to attract and retain workers' services.  Economists call this a compensating differential: All else equal, unpleasant jobs pay more.  That's a major reason why garbagemen are low-skilled yet well-paid.

Whatever your view, though, it's hard to grasp the logic of the status quo.  The economics of repeated games and first-hand observation both tell us that customers are more poorly-behaved than employers.  If you don't take compensating differentials seriously, the government is misdirecting its resources - attacking petty employer offenses while ignoring serious customer offenses.  And if you do take compensating differentials seriously, the government is absurdly trusting the market to handle the serious problem of customer-on-worker unfairness, while loudly "doing something" about the petty problem of employer-on-worker unfairness.

What gives?  The real explanation, once again, is probably the popular double standard in favor of indirect coercion.  When customers treat workers badly, legal remedies would be direct coercion.  Most people would recoil: "Noxious customers ought to mend their ways, but it would be brutal, unfair, and wrong for the law to impose good manners."  When firms treat workers badly, legal remedies are mere indirect coercion.  Most people effuse: "Unfair businesses ought to mend their ways, and government has the right - nay, the duty - to make them do so."  Since the law coerces businesses, which in turn discipline managers and other employees, no normal person bats an eye. 

You could object that "Businesses are people."  When the business is a sole proprietorship, the claim is undeniable.  But you won't get far with these truisms, because dehumanization of businesspeople is a key tenet of our secular religion.

COMMENTS (22 to date)
Les Cargill writes:

1) My employer *does* apply exactly the same standards to customers as it does to anyone within the company. This is true for HSE or harassment policy. No exceptions. When you contract with us, you are notified of this in writing. There may even be required training.

2) My daughter worked for a coffee chain. the store manager would take up for any of the kids getting excessive abuse from any customer. He'd remember who you are, and you were no longer welcome in that store. If it wasn't corporate policy, it didn't matter. It was his policy. "No soup for you!"

3) There is no compelling reason to think that the lump of labor fallacy is any more valid now than it's ever been, especially when it comes to low-end jobs. This assuming protection from abuse even qualifies as "compensation".

Lawrence D'Anna writes:

I'll answer your rhetorical question for you.

Costs imposed on consumers are what is seen. Costs imposed on employers are what is not seen.

RohanV writes:

Aren't you the same person who was arguing that being fired or laid off is so traumatic that workers should accept wage cuts?

Why then do you completely ignore this part of the story?

The boss can fire the worker. The customer cannot. That power relationship is why we put legal guards around one relationship and not the other.

Hana writes:

Post seems a little misguided.

5% of customers are obnoxious seems a bit on the high side.

First, the average customer when he has an issue with a company is obligated to navigate through myriad levels of bureaucracy to have his concerns addressed. While it is an efficient way to organize, many problems require higher levels of approval to be addressed. Consumer frustration increases as they move through the bureaucracy.

Second, organizations under-train in customer service. The ability to handle to difficult customers is as much a matter of training as it is personality. Empathizing with a customer, and then helping to resolve issues generally helps maintain the civility of both customer and employee.

Third, the notion that suing, or having government involved in handling difficult customers is scarcely the libertarian response to situations. I guess inside that libertarian shell is an authoritarian just waiting to get out.

Glen writes:

Hana, I don't think Bryan was supporting such a law. He was just pointing out an inconsistency.

Bryan, I think there's a reasonable defense of the inconsistency on grounds of administrative efficiency and the least-cost avoider principle. Administratively, it's a lot easier to deal with one employer making repeated sexual advances than a hundred customers making one sexual advance each.

Furthermore, the employer is probably better positioned than either the employee or the government to assure good behavior on the part of customers. The employer can institute a rudeness policy to ban jerk customers, for instance. So the government can focus on giving the employer an incentive to create a non-hostile work environment. (And I wouldn't be surprised to learn that current law is interpreted to hold employers responsible for a pattern of bad customer behavior that can be construed as creating unsafe or hostile working conditions.)

Jameson writes:

I think Rohan basically gets this right. I don't think there's really an "inconsistency" here, just a different estimation of power differentials.

loveactuary writes:

I am with RohanV in that it seems more important to protect against the person signing your paycheck harassing you. Though indirectly it is the Customer signing your paycheck, usually any individual customer cannot be pointed to as having some kind of coercive power over you.

The labor market does work in both directions, though, so if your skills have value presumably you can walk ...

Bostonian writes:

"But if a dozen customers a day make unwanted advances on the same waitress, the law is basically silent."

Presumably "wanted" advances are OK. Should the definition of sexual harassment depend on how attractive the man is (or on the difference in attractiveness between the man and the waitress, assuming more attractive women have higher standards)?

geoih writes:

The first three rules of preventing sexual harrassment: Be good looking; Be attractive; Don't be unattractive.

LD Bottorff writes:

"dehumanization of businesspeople is a key tenet of our secular religion"
Businesspeople in general, and the most successful businesspeople (the top 1%) are being dehumanized in the same way that the the Jews of Europe, the Armenians of the Ottoman Empire, the East Indians of Uganda were. History is full of examples of religious and ethnic minorities being blamed and punished for their success. Nowadays, we are more sophisticated. We ignore the ethnicity or religion and focus on the economic success.
However, the answer to Bryan's titular question is less sinister. There are lots of customers. There are fewer employers. Which way do you expect the political power to bend?

Glen S. McGhee writes:

You are making this too complicated.

"Why Not Protect Workers from Customers?" We already do -- it's called government bureaucracy.

Eric Falkenstein writes:

I like your indirect coercion model, that it grates less against our common sense moral intuition. But you are neglecting an alternative hypothesis that generates observationally equivalent outcomes. Producers are fewer, generally those with higher wealth and status. The median voter strictly prefers to tax, expropriate, micromanage, and harass capital owners. 'Indirect coercion' is potentially more about envy than managing cognitive dissonance.

Dano755 writes:

The boss can fire the worker. The customer cannot. That power relationship is why we put legal guards around one relationship and not the other.

As a customer I fire workers all the time. I take my business elsewhere.

Peter H writes:

Any individual customer is only liable for the actions he or she engaged in. Even if 20 customers a day make inappropriate advances, each customer would only be liable for one advance, and except in very severe cases sexual harassment suits require that there be multiple instances of harassment for there to be grounds to take non-severe instances and make them in aggregate constitute sexual harassment.

The main thing that makes a single incident severe is either force or violence, or threat of adverse job action (being fired, not being hired, getting/not getting a promotion) based on engaging in sexual activity. Since a customer can't give you a promotion or fire you, the single actions they could engage in that would be enough for a harassment suit are almost all some sort of sexual assault or rape, which are already very illegal.

Emil writes:

1) because workers and customers bring more votes than employers

2) because employers are evil capitalists whereas customers and workers are innocent and unprotected

MingoV writes:

I will use the sexual harassment example:

What's the libertarian solution to (physical) sexual harassment by customers? Sexual harassment violates the "don't harm anyone" rule. A libertarian society will not have police on every corner, so most interventions (if any) would come from bystanders. But what happens then? Do the bystanders arrest the perpetrator? Do they detain him and call a law enforcement officer? A better choice would be for the society to create a victim compensation system with the perpetrator transferring to the victim an amount based on the severity of the harassment. I think this choice fits best with a libertarian society and is likely the be the most effective at reducing sexual harassment.

nl7 writes:

It doesn't make sense that bosses are allowed to be mean to their workers, impugning their intelligence, creativity, dignity, and work ethic, but are usually prohibited (by policy and caselaw) from even mentioning things like religion, gender, or ethnicity.

Jim Rose writes:

the list of jobs that involve working with difficult customers is long. some businesses specialise in such services.

google this to find countless tip sheets and training

AuDragon writes:

"[B]ecause dehumanization of businesspeople is a key tenet of our secular religion."

In this case I would say the exact opposite is true. The regulations are recognizing that as soon as humans get power over other humans, eventually they are going to abuse it.

Jesse writes:

I agree with this post, granted I am biased for being one of the harassed employees and do not understand all of the economics, but some protection should be available from this harassment. I have worked as a clerk at a pharmacy for several years now, not to mention several small jobs before that, and I encounter a lot more harassment than you might think. I am constantly being yelled at and told outright that I am wrong by customers. That in itself is nothing I or my boss can't handle but when I am accused of giving anyone the wrong drug then this is a serious accusation. True I am simply giving them the bag or bottle that the pharmacist has already prepared, but I could still easily be pulled into a lawsuit. These accusations could be very dangerous to me and my future and I can certainly support some kind of protection from this.

vikingvista writes:

"as soon as humans get power over other humans, eventually they are going to abuse it."

Including the power to create or enforce regulations?

Ricardo V writes:

This article ignores the most relevant element between employers and employees, and that element is simply not present in the customer-employee relationship: employers have *power* over employees, and can threat them with firing; customers do not hold such power. The article is based on a false "fact": laws DO exist which protect workers from customers. It is also based on a much debatable assumption: workers are more frequently abused by customers than by employers. Here Caplan is actually victim of AVAILABILITY BIAS: of course he has seen more abuse from customers than from employers, because the latter have a greater opportunity to do it away from the public's eyes, whereas customers can abuse only in the open. Finally, this article makes a huge confusion between three different topics: protection of workers from economic difficulties (a company closing down, poor working conditions, etc.); protection of workers from abuse (sexual, verbal, etc.); and protection of workers from lack of civility.

"But if a dozen customers a day make unwanted advances on the same waitress, the law is basically silent."

This is factually false. If customers make unwanted advances on the same waitress, she can accuse them of verbal and/or physical assault/insult/harrassment in a criminal court, and seek compensation.

Even if there may be no specific laws about, say, verbal insult in the specific case of customer and worker, the general law still applies.

But the reason, which I believe should be absolutely obvious, so obvious this whole article seems to me a complete absurd - the reason that there do exist specific laws to protect workers from bosses, but no specific laws to protect them from customers - is that bosses have *de facto power* over workers, which customers do not have.

One does not need to be Marxist to know the obvious reality of life: the de facto power of employers over employees. There are two dimensions to it (at least).

One, a boss has more oportunity to make unwanted advances on workers, or any other kind of abuse, that will go unseen and unwitnessed, than do customers. Advances from customers are more likely to be made in an open and public space: the worker is not so vulnerable in such circumstances. Advances from a boss happen away from other people's eyes. Just think a waiter working at the counter, versus the case when he or she has to go to the kitchen or to the private office of the boss.

Second: the 'de facto power' of the boss over the worker obviously does not end there: with every unwanted approach from the boss, there might be a tacit threat that the boss FIRES the worker if the latter is not receptive. A customer can, at most, make the "threat" of never returning to the place where the employee works, if that can actuall be called a "threat". And if the customer actually fulfils his threat, and never returns to the café/shop/whatever place: well, that is just fine with the worker!

This whole article is rather strange in another way: Caplan confuses protection against unwanted advances and similar abuse, with protection against economic difficulties (for which there are many specific laws); and there is also confusion between, say, sexual abuse or verbal abuse cases, and simple incivility or rudeness.

These are all evidently different things, which require different legal and non-legal policies, and quite probably elicit different "market" and "non-market" approaches.

"Many customers, in contrast, never interact with the same employee twice - or at least interact with the same employee so rarely that amnesia sets in. As a result, customers can mistreat employees with impunity"

If you think the worker is a taxi-driver in NY City, then *maybe* (even taxi-drivers can be subject to customer evaluation, more on that below). But there are countless examples in which customers interact many times with the same workers: shops, cafeterias, etc., etc.. Just think about schools and universities, in which the students, who are the customers, have the opportunity to interact with workers, the teachers, for hours every day or every week.

Is there any data telling Caplan one-shot customer-worker interactions are more numerous than repeated-interactions? (Is data really necessary??!)

But, again "customers can mistreat employees with impunity": no they cannot: in the world we live in there are police services, and courts of justice, and laws.

Then, another source of confusion: "customers treating workers like dirt. Most customers, to be fair, are vaguely civil. But if 5% of your customers are rude, emotionally abusive, or worse, you probably have a bad day."

Is this about harrassment or being subject to rude customers? Employees who are treated in a rude manner can just ignore a customer, make them wait, etc.. Or can insult back!

"You must share your identity on request to allow the legal process to move forward. If a customer accused of sexual harassment flees the scene, the law could treat his dine-and-dash like a hit-and-run. "

But this already happens!! A person victim of insult, worker or not, calls a policeman, the policeman requests the identity of the *supposed* aggressor, the identities of willing witnesses are recorded, and the process will move forward. At least, this happens in those countries with a State, a government, security services, and so on

((it probably would not happen in an anarcho-capitalist "utopia": in that "utopia", the worker might shoot in the face the customer who used the word 'honey', and other customers might retaliate in a Western like shooting spree in a Saloon, and aren't we getting so much more "liberty" no that government has finall left us alone? and etc., etc.)).

"When workers have to interact with unpleasant customers, employers pay extra to attract and retain workers' services."

No: the workers react by figthing back unpleasant attitudes with unpleasant attitudes, and the misbehaving customer learns. This happens from worker to customer, among workers, among every people every where. It is learnt in the school, when people have to learn how to defend themselves. When they grow up, they learn that for more serious offences, there exists the police, the courts, etc.. But again lack of civility and serious abuse are different things, which require different ways of prevention and security.

"The economics of repeated games and first-hand observation both tell us that customers are more poorly-behaved than employers."

The economics of repated games does NOT tell anyone that one time only interactions between customers and workers are more or less common than repeated interactions. I believe repeated interactions are, in fact, the norm. But AVAILABILTY BIAS will suggest the more visible abuse is more common than the less visible. Customers abuse in the open, employers do not: these leads to the bias. Also, the most serious form of abuse takes place in the most concealed manner (unless seriously abusive people are also seriously stupid). Customers seem to be more abusive than employers because the worst forms of abuse, carried out by employers, are concealed. Again, availability bias.

As for one-shot interactions, there are services and many ways for customers to evaluate workers: the guy that came to install cable tv, I will not see him ever again, but I can complain or praise him directly to his boss: I of course know the company he works for, and the email of the company, and the customer-complaint email. By the way, the same applies in the case of taxi-drivers who work for a company. This is an example in which "the market" fixed the problem with one-shot interactions. (Hooray for the market!)...

I any case, I see everyday the same people working in the café, in the library, even the same workers at many different shops in two or three shopping centers. It is easy to make the case that repeated interactions are more numerous than one-shot interactions. And the less urban a place, the more so. And the smaller a city, the more so, etc..

As for first hand observations, what should be observed more carefully is the de facto power bosses have over employees, a power customers of course do not have: the power to fire.

There is, hence, no case of double standards: employer abuse is a more serious concern than customer abuse because it is less visible, less witnessed, and because employers can fire employees who repeal abuse.

From the perspective of law making, and by the way from the perspective of "market mechanisms" too, one can say that serious abuse from a boss is in many relevant ways just different from serious abuse from a customer. Workers are much more vulnerable in the case of abuse from the employer.

Different topics, which suggest different solutions, but unfortunately were bundled together in one single and very-far-away-from-reality article.

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