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Unwired Working Conditions

Economics teaches us that working conditions are "baked into" wages, that is, ceteris paribus, a job with less pleasant working conditions will pay higher wages to attract employees, and vice versa. For example, the average hourly wage of a refuse collector in California in 2001 was $16.04. This relatively high wage compensates for the undesirable working conditions.

Some improvements in working conditions increase the output of workers by more than the cost of the improvement, and are naturally implemented by businesses. To use a deliberately silly example, consider the provision of adequate light within a large office building. A proper level of light eases eyestrain, enables people to read faster, and prevents injuries from bumping into things in the dark — clearly both an improvement in working conditions and an increase in output a for very modest cost. It's a win-win situation and it is unsurprising that improvements of this sort are undertaken with enthusiasm.

Other kinds of improvements in working conditions have a cost higher than the benefit to the employer. While desirable to the employee, the employer has no incentive to implement them. To use another deliberately silly example, employees may desire spacious private offices. While such offices would make the employees happier, and might even increase their output, it would not cover the expense of providing the offices. The employer would not be eager to pursue this option.

However, this is negotiable. If the cost of providing a spacious private office is (say) $5000/yr, the employee could have that office in exchange for a $5000/yr salary reduction. They could, in effect, purchase the improvement in working conditions themselves. The reverse is also possible: an employee may be willing to work in a tiny cubicle if their salary is correspondingly greater. This is essentially the observation we started with — less desirable jobs (subsuming working conditions) command greater wages.

For a much longer discussion of related issues, primarily job safety, I highly recommend this article by Dr. Reisman.


This brings me to my primary topic, wireless network access.

Intel is a champion of, and profits from, the wireless revolution. Intel® Centrino™ Mobile Technology (sorry, Legal will hurt me if I don't call it that) is built into all, or virtually all, new laptops distributed to employees. Wireless access points are sprinkled throughout the buildings. The infrastructure for wireless network access is in place.

Yet many people with wireless-capable laptops do not have wireless access. The infrastructure was expensive to create and has ongoing costs such as maintenance of the VPN gateways, so Business IT is charging for access. The cost is modest, $10/month, paid for by the employee's department. But not every department is willing to pay.

Wireless access is definitely an improvement in working conditions, particularly in group settings such as conference rooms or auditoria. The fee structure for wireless access has the appearance of being a third option besides the win-win and employee-pays options described above. But this is an illusion. It is merely the win-win type at a finer granularity, because the employer is still the exclusive funder of the improved conditions. A department will pay for wireless access for its employees only when it believes the increase in their productivity at least offsets the cost of the wireless access. Many departments allow management discretion to fund wireless access for individual employees as well, but even this still fits the same pattern.

The system as implemented today creates a "market price" for wireless access and departments (or managers) decide whether it's worth buying. As a procapitalist radical, I find this market-like approach charming. Market prices summarize information about costs that is otherwise hidden and could lead to inefficiencies. For example, it may be wasteful to provide blanket wireless access for all employees in all locations of the company — but if it is offered "for free", no one would decline coverage. They would see only the benefit but not the cost.

My disagreement with the current system isn't that it's unseemly or ridiculous to have a market within the company, or that we should set a corporate example by practicing what we preach ("don't we believe our own marketing?"). My disagreement with this market is that it doesn't go far enough: It doesn't create a real market, one that would allow me as an individual employee to pay for wireless access out of my own pocket, if I were inclined to do so. The current system restricts this decision, and the cost involved, to department policy or the discretion of management. This means I only get wireless access if it is recognized as a "win-win" type of improvement in working conditions. It does not allow me to negotiate my working conditions as an individual and to pay for the improvement personally through a tiny effective reduction in salary.

Imagine the large-scale analogue of this. What if cellular telephone service were provided by the government on a state-by-state basis? Some people would be issued cell phones they would scarcely use, while others who would highly value them would be unable to get them. The counterpart of management discretion is politicians granting special favors to the well-connected (no pun intended). Aren't you glad we have a market in cell phones that is based on individual choice and willingness to pay?

In the end, I believe wireless access is a win-win improvement in working conditions — primarily due to poor maintenance of the wired infrastructure in conference rooms — and am embarrassed that my department does not recognize it. But embarrassment for my department turns to frustration with it when policy leaves me powerless to correct its mistakes. But it is the nature of politically-created outcomes to be less satisfying than economically-created outcomes.

Tiny Island