ABSTRACT
According to "distributive" theories, laborers are paid enough when they receive a certain proportion of the mutual gains that are created by the combination of their labor and the firm's capital. Certain jobs—oil rigging, crab fishing, and mining, for example—are hazardous because of the activities they require and the risks to which they expose laborers. According to standard economic theory, rational laborers select a compensation bundle—a mix of these goods—that provides them with a combination of benefits, working conditions, and wages that maximizes their overall utility. This chapter addresses questions related to what we might broadly call the exploitation of labor: "How are laborers wronged?" and "What do firms owe their employees?" It is common to say that firms can wrong their employees by exploiting them. In addition to respecting voluntary contracts, firms must also ensure the distribution of benefits in the contracts they make with their employees do not reflect prior injustices.
