The Economics of Snow Days, and Discrimination Against Women

In the months before and after the NFL draft, each NFL team will hire lots of players.  Notable about the frenzied hiring is that a good number of those signed will be fired by September.  Such is life in the NFL.  It’s a very competitive business, players and their agents know it’s competitive, and players are much more focused on staying in shape and learning the game of football when they also know that a missed tackle, block or fumble could result in being let go.

Well away from sports, it’s almost a trite observation to note that rates of unemployment among the able-bodied are historically higher in France than they are in the United States.  One reason for the rate disparity is that it’s very expensive to fire workers there.  There’s talk of reform under the Macron regime, plus it’s no doubt true that much hiring in France is done under the table, but for now the possible expense of paying for someone not producing makes it costly to take a risk on hiring that person to begin with.

And while this next passage may be taken the wrong way by some readers, it’s worth mentioning a conversation with a very successful investor from several years ago.  He’s of Mexican descent.  The latter rates mention given his comment that he avoids hiring minorities.  His avoidance has nothing to do with talent, and everything to do with the liabilities and bad press attached to firing a minority worker.  It can be expensive from a legal or PR standpoint, hence this wildly intelligent investor feels it’s in the best interests of his business to not hire minority workers.  The cost of hiring the wrong person has the potential to be too great. 

Which brings us to last Wednesday morning in Washington, D.C.  There were snow showers developing.  There was sleet. By 8 am the fairly heavy snow was a fact. The streets were ugly.  The news on the local channels was all about the weather, and the scrolls at the bottom of the television indicated that many schools and school systems would be closing.  This is the norm in colder parts of the U.S.  When it’s snowing or sleeting, hazardous road conditions make it wise for kids to stay home.   

So, in a perfect world, is it wise for parents to stay home when the weather is bad.  The difference is that they have work.  Their work comes with a paycheck.  That’s why snow days present major problems for parents.  If their children aren’t old enough to look after themselves, a snow day for the kids forces one or both of the parents to potentially stay home too.  All of this is a reminder that more than most want to admit, school is more about daycare than it is about learning.  But that’s another opinion piece.

For now, it’s about the economic impact of snowy weather.  What closes schools once again puts parents in a difficult spot.  This is particularly true as more and more families are defined by working fathers and mothers.  If the schools are closed, what are parents to do?

Thanks to the profit motive, the previous question is increasingly easy for parents to answer.  Lots of people grew rich by virtue of making computers, smartphones, WiFi and e-mail ubiquitous, and that they did is a reminder of why people attain great wealth: they do so because they remove unease from our lives. 

For parents of children for whom school has been cancelled, technology of the computer and smartphone variety means that a snow day does not necessarily mean a lost workday for parents.  While many corporate cultures are enhanced by the office environment, technology makes it possible for parents to work from home when weather forces the kids to stay home. 

Just the same, the very technology that enables telecommuting also speeds productivity among workers who don’t have kids, and who aren’t affected by snow days.  Precisely because technology boosts the productivity of everyone, the loss of a few workers due to snow days logically doesn’t have the problematic impact that it once did. 

Important here is that what works on snow days also logically works when it comes to parental leave.  Telecommuting and increased individual productivity wrought by technology plainly makes it possible for companies to offer very generous maternity (and increasingly paternity) leave without a crippling loss of overall company productivity. 

At this point, it’s worth stopping to think about what all of the above means.  For insurmountable reasons related to biology, the birthing of children falls on women.  Because it does, the cost of hiring a female was at one time very expensive; assuming plans for child rearing.  Less robust technology meant that the loss of a talented worker for weeks or months would have a costly impact.  Technology gives us many more “hands” than we presently have, and just the same, a lack of technology surely reversed the previous scenario.

Thinking about all this from a women on maternity leave perspective, imagine what it meant for businesses in the more primitive past.  With each existing worker hamstrung by a lack of technology, it’s a safe bet that pregnancy among employees before the age of the internet presented a much more expensive challenge.  Fast forward to the present and existing employees can not only fill in for those out, but the same technology that stretches workers across various tasks also enables the employee on maternity leave to stay connected to the job while at the same time bonding with the new arrival.

Contemplating all of this with lawmakers very much in mind, it’s a reminder yet again that benefits cannot be legislated.  Businesses work for profit-motivated shareholders, and if legislators foist on businesses expensive rules, they’ll figure out ways to discriminate against costly hires.  This includes staying small. 

Importantly, none of this is to say that women aren’t talented.  Market signals across all sorts of industries regularly disprove the latter.  But it is to say that when technology was less robust, and by extension the gap between rich and poor was smaller, the cost of hiring women was quite a bit greater. 

It’s maybe a small thing, but here’s yet another reason to cheer on the wealth-enhancing profit motive.  When wealth is surging thanks to innovations that remove unease from our lives, the value of workers rises too. And when the value of workers rises, so does the cost of discriminating against potential employees for reasons other than talent.