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Olson believes that the new employment law will in time produce European-style rigidities in the labor market, with permanent high unemployment and a large measure of inefficiency and waste. The net effect is the creation of a zero-sum lottery in which a lucky few (and their even luckier lawyers) sometimes receive fabulous windfalls while the cost of employing everyone else rises.
But the real surprise of Olson's book concerns the ways being found to avoid many of the new law's rigidities. Small employers attempt to keep the number of their workers below the threshold at which the rules apply. Some companies also make across-the-board reductions in their labor force to avoid having to justify the discharge of particular troublesome employees. More employers engage temporary workers. Perhaps most significantly, employers are factoring the higher costs of the new law into wages, thereby shifting the burdens to other employees. Thus does bad law not only fail to achieve its primary purpose, but creates ever widening distortions in our economic and social life.
--This text refers to an out of print or unavailable edition of this title.
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