Bureaucrats huddled in some office somewhere failed to foresee the costs of their actions.
The pandemic has undoubtedly hastened the shift to remote work. Many workers and companies have now embraced remote work in previously office-based positions, and this is continuing even as the economy reopens and new jobs are posted. Many new remote positions are being posted advertising that applicants can live anywhere in the US—except Colorado.
“A new Colorado law… requires companies with even a few employees in the state to disclose the expected salary or pay range for each open role they advertise, including remote positions,” the Wall Street Journal reports. “The rule’s aim is to narrow gender wage gaps and provide greater pay transparency for employees.”
“To avoid having to disclose that information… some employers seeking remote workers nationwide are saying that those living in Colorado need not apply,” the Journal notes.
For example, a posting for a Johnson & Johnson job recently read: “Work location is flexible if approved by the Company except that position may not be performed remotely from Colorado.” Multiple job listings at Cardinal Health, Inc. advertise that “This is a remote, work from home position. This role is to be filled outside of the state of Colorado.”
You get the idea. A website, ColoradoExcluded.com, catalogs these postings and reports that at least 39 companies are actively discouraging Colorado residents from applying. Why?
Well, companies say that the Colorado regulations are burdensome and costly to comply with. And publicly posting all salary information not only undercuts employees’ privacy but also could fuel discontent and conflict within the company. Given the fact that they have 49 other options (and more if you count Washington, DC, Puerto Rico, etc.) it’s easier for some companies to just not hire people from the state.
This is certainly not what Colorado state lawmakers intended. They likely had good intentions of promoting transparency and equality, albeit ones based on a statistically dubious premise of the largely fictional sexist “gender pay gap.” But as Nobel-Prize-winning economist Milton Friedman once said, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.” And the result of this regulatory overreach was to take jobs away from Coloradans, not make them more equitable.
Of course, few could have seen this coming when drafting salary transparency regulations. While easy enough to understand in hindsight, it would have taken tremendous foresight to predict that this would specifically lead to remote work positions discriminating against the state. But that’s exactly the problem with the government interfering in the minutiae of economic life. Bureaucrats huddled in some office somewhere can never fully foresee the vast and disparate consequences of their actions—meaning unintended consequences inevitably follow.
“Every human action has both intended and unintended consequences,” economist Antony Davies and political scientist James Harrigan explain. “Human beings react to every rule, regulation, and order governments impose, and their reactions result in outcomes that can be quite different than the outcomes lawmakers intended.”
Colorado lawmakers may not have intended to get applicants in their state discriminated against in remote work opportunities. But we should judge them not on their intentions, but on their results.