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Perquisites Behaving Badly?

11/11/2019
By Jack Towarnicky

In a recent Colorado Sun article, University of Oregon associate professor of law Elizabeth C. Tippett asserts1:

  1. Companies offer all sorts of benefits and extras to attract the most favored workers, from health care and stock options to free food. But all those perks come at a price: your freedom. 
  2. Labor historians call these perks “welfare capitalism,” a term that originated to describe company towns and their subsidized housing, free classes and recreational activities. All of us live in the company town when we go to work each day. 
  3. Offering any benefits that people come to rely on is also a convenient vehicle to mold their behavior. There is a rich history of employer experimentation with benefits as a behavior-modification device. 
  4. Benefits, particularly those that employees deem necessary or exceptionally valuable, enable employers to exercise surveillance over workers and demand behavioral change in ways they could never do through threats alone. 

On her list are health coverage, health and wellness incentives, as well as company provided cell phones and laptops: “Employer efforts to use workplace benefits to control our personal decisions (are) grating (to me).”

However, professor Tippett ignores how we got here. She ignores the influence Congress has had on workplace benefits and perquisites – in terms of tax preferences, legal protections, requirements, etc. Many employers only offer benefits where workers receive a greater value than what could be generated by an equivalent level of spend on direct wages. Top reasons include: (1) Tax preferences, (2) Individual market unavailability, and (3) group dynamics.

Some of professor Tippett’s article is focused on more than 100 years ago “company town” and “company store” activity (e.g., Pullman, Henry Ford’s profit-sharing plan, etc.) She suggests a current day version might be the wide-ranging perquisites offered by some employers in today’s Silicon Valley. And, yes, there is a little bit of truth in her statements. However, that’s quite a jaundiced view of the rewards provided by most employers.

Some context for each of her comments, above: 

  1. Not “most favored” but “most productive.” People are not “free” at work. However, her article does not identify any current day employer that awards or calculates stock options or profit sharing based on your life or behavior outside of the workplace.2 Nothing stops individuals from seeking out work whose only reward is a wage or revenue. 
  2. Company towns and stores were always limited in scope. Many times, they were part of mineral extraction businesses in remote locations. All declined in use more than 100 years ago. Today, no one “owes their soul” to the company store.
  3. People don’t rely on benefits any more than they rely on their wages. History, yes. Employer experimentation to control personal lives in the future, no. 
  4. Yes, all compensation and benefits are rewards, incentives. They influence behaviors and job performance. However, influence is not “control” unless a worker is unable to “opt out.” Few employers condition employment on participating in health coverage, retirement savings or other benefits or perquisites. 

There is a big difference between the company store (as the sole (or soul) source of housing, food, etc.) and the health coverage, retirement savings plans, profit sharing and other benefits and perquisites offered by some employers in today’s employment marketplace.


1E. Tippett, Opinion: How your employer uses perks to control your life, 9/6/19. This column originated at The Conversation, an independent and not-for-profit global network of newsrooms funded by individuals, foundations and universities, including Colorado State University. Provided by The Colorado Sun, J. Paul. Accessed 9/8/19 at: https://www.montrosepress.com/opinion/opinion-how-your-employer-uses-perks-to-control-your-life/article_602dc674-d05d-11e9-bed3-d7ee4ecdc20c.html
2Exceptions, as mentioned by Professor Tippett, might include “bad boy” clauses in executive employment agreements where “bad behavior” in an executive’s personal life could negatively impact enterprise value.
3M. Travis, Sixteen Tons, 1947, Accessed 9/8/19 at: https://www.youtube.com/watch?v=3I15_KUsOzs

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