Featherbedding - Economics

Economics

Featherbedding is commonly seen by economists as a solution to "who should bear the burden of technological change."

Economists often argue that featherbedding is the most economically optimal position from both an employer's and employee's perspective. Featherbedding only emerges under certain circumstances. Chief among these is that the employer has an exploitable surplus (e.g., profit) to support the practice. Featherbedding also arises where market forces fail and organizations are permitted to be noncompetitive. Under this analysis, corporations (for example) are already inefficient and featherbedding does not make them more or less so. Featherbedding can, in some circumstances, take excess resources (profits) away from the employer and give them to workers in the form of more income per worker or higher numbers of employees at the same income level. Featherbedding is considered economically efficient because it occurs in the give-and-take of collective bargaining. If employers were relatively strong vis-a-vis unions, unions would be unable to impose featherbedding on them. As the politico-socio-economic strength of each party changes over time, collective bargaining outcomes will as well, enlarging or reducing the number and impact of featherbedding rules on the employer.

More recent political analyses of featherbedding have concluded that featherbedding is not necessarily economically optimal, but is better than other forms of bargaining. Under this analysis, the best form of collective bargaining would be one in which the union and employer bargain not only over wages but the level of employment. Most unions in the United States, for example, bargain solely over wages. Bargaining over work rules (featherbedding) as well as wages achieves outcomes close to those reached by bargaining solely over wages, but is better than bargaining over wages alone.