compensation. But the issue of differential subversion, namely, the idea that the courts
have been more susceptible to capture than the legislature and that the switch to the latter
at the beginning of the last century in the United States was an efficient response (Glaeser
and Shleifer, 2003), is left to others. Nor for that matter do we elaborate on the role of the
courts as a vehicle for restraining overarching legislation at state (and federal) level.1
At this stage it seems premature to seek a unified framework for evaluating labor
regulation in the United States (but for a general approach, see Amable and Gatti, 2004).
Rather, we elect to provide information on several types of labor regulation at federal
state and local level, each of which offers a different spin on regulatory behavior. We
first examine the political economy of OSHA, to show the scope that exists for raising the
costs of rivals by engaging the polity. We then turn to the case of unjust dismissals to
show how regulation might be a corrective to the actions of interventionist judiciaries.
Next, we tackle right-to-work legislation as an example of a partial political escape route
affixed to national legislation. Only then do we consider safety regulation and workers’
compensation which arena offers the richest literature on the political economy of
regulation and formal evidence on the use of regulation to raise rivals costs. Finally, we
take a look at living wage ordinances and prevailing wages to update the minimum wage
argument and identify the union ‘interest.’ In a concluding section, we roughly draw
together the threads of the preceding arguments.
II. Themes in Labor Regulation
(i) The Scope for Raising Rivals Costs: The Case of OSHA
Perhaps the best estimates of the net benefits to (some) firms and workers2 of labor
regulation are provided by Bartel and Thomas (1985, 1987) in the context of
Occupational Safety and Health Administration (OSHA) regulations. The authors use the
term “predation” to describe the actions of these interest groups. We focus here on the
authors’ analysis of the direct and indirect effects of Occupational Safety and Health
Administration (OSHA) regulations, even if the data on OSHA compliance costs in the
study - as contrasted with Environmental Protection Agency (EPA) regulations3 - are