Up until the Civil War, the southern United States was a region characterized in our minds by the large cotton plantations and the black slaves that worked these. After the emancipation of the black population previously in servitude, the land-owners were faced with a distinct problem. For generations, they had relied on the work of their slaves to work the land and harvest the crop. Now they were faced with a free-market system, where competition drives wages and the labor force is not fixed. Slave labor could not quit, and turn-over was non-existent. The North’s effort to rebuild and democratize the states of the ex-Confederacy resulted in a previously foreign market scheme to the region. However, in the largely unregulated and predominantly racist South, the land-owners found a way to keep their labor force at minimal cost to themselves. Having control of the legislative bodies at a regional level, anti-enticement laws were passed by almost all southern states.
As far as anti-semantic laws go, these are unique in the fact that they were followed to the letter of the law, most likely because they were prosecuted by and against white landlords for the most part, rather than enforced in a sporadic way at the whim of the law-enforcement. Therefore, the effects of formal changes of the law are likely to alterably change labor market behavior, and thus observable.
The mobility of sharecroppers fell under the wing of the anti-enticement laws, who where often under seasonal contracts. The effect was that the land-owners could pay lower wages without losing all of their workers to competing employers. Anti-enticement laws generated upward-sloping labor-supply curves to individual planters, even though the labor market was saturated both in workers and employers. These laws were both a way of oppressing a population considered “unfavorable” and a way for the employers (land-owners) to keep their steady labor-force at minimal cost. Naidu sums the situation up quite nicely in his essay discussing the labor legislation of the ex-Confederacy in the years following the war: “Anti-enticement laws are an example of labor legislation, pervasive in the postbellum South, that benefited white employers at the expense of black workers.”
Naidu’s studies lead him to the following conclusions: the laws lowered labor market mobility, wages, and the returns to experience for black agricultural workers. Reviewing these results of this, however, can shed light on the effects that labor legislation can have on labor markets in rural settings that mirror the southern US during this time-period. He draws the following conclusions:
(1) Institutions that restrict competition among employers, particularly found in post slavery labor markets, seem to have a real effect on reducing workers’ outside options. (2) These institutions can be readily interpreted within the framework of standard job search models. (3) The results are consistent with research that suggests that employer competition and job-to-job transitions are important determinants of labor market outcomes.
These findings are particularly interesting as they can be applied to markets-in-transition evolving out of repressive régimes. If the effects of such labor market restrictions are known, it is possible to combat the negative and stabilize the market forces in an equal and fair way to all involved; in particular, the worker.
Recruitment Restrictions and Labor Markets: Evidence from the Postbellum U.S. South
By Suresh Naidu
Journal of Labor Economics, Vol. 28, No. 2, Modern Models of Monopsony in Labor, pp. 413-445