The news that some employers have started handing out cash rewards to workers who are vaccinated against Covid-19 warms my libertarian heart. Yes, the idea is controversial; yes, there are legal implications. But providing incentives to get people to do what others think they should is almost always superior to punishing them for defying those wishes.
The US is reopening fast, but the vaccination rate continues to lag, even as supplies are so plentiful that many sites serve walk-ins. According to the Bloomberg vaccine tracker, some 44% of the population had been vaccinated as of May 25, 2021. Those rates put the US far ahead of most of the developed world, but estimates of what’s needed to achieve herd immunity run much higher, with a lower bound around 70%.
So we have work to do.
Appeals to civic duty or more negative possibilities (such as shaming the unvaccinated) seem to have taken us as far as they can. If we’re serious about getting more people to take the shots, we’re left with two choices: punishing the uneasy for their uneasiness, or rewarding them for changing their minds.
Punishing people – making their lives worse – should always be our last choice. Rewarding them — making their lives better — should be near the top of the list, right after persuasion. Let's not forget that people have all sorts of reasons for their reluctance, from concern over whether the vaccines have been sufficiently tested to heartfelt religious objections to a keen awareness of the cruel indifference with which medical experimenters have sometimes treated Black subjects. There's no good reason to subject any of these groups to coercion — especially when other tools are available.
Rewards can come in a lot of forms. Several states have started giving lottery tickets to the vaccinated. The economist Alex Tabarrok, who’s been out in front of the crowd on so many vaccination issues, suggested in April that we “clip a Powerball ticket to every vaccination card.” As he’s recently pointed out, the lottery incentive seems to be working.
Employers, too, have good reasons to offer incentives. Fresh Covid-19 outbreaks in the workplace could lead to official sanctions, and even temporary shutdowns — to say nothing of potential liability. Some workers say they won’t show up unless most of their colleagues have had their shots. Small surprise that many employers are mandating vaccination.
Regulators and courts agree that employers have the authority to adopt rules to improve workplace safety. But legal scholars have long worried that forcing employees to get vaccinated or face termination raises complex legal questions. Moreover, given the unusually high levels of resistance to the Covid-19 shots, mandates might lead to significant disgruntlement in the workforce. For a concerned employer, then, paying the unvaccinated to change their minds makes sense.
The trouble is, employer incentives raise legal problems of their own. An effort to reward vaccinated workers might potentially run afoul of a long list of federal statutes, including among others the Americans with Disabilities Act, the Genetic Information Nondiscrimination Act, the Health Insurance Accountability and Portability Act, and the Affordable Care Act. A particular worry is that too large an incentive can become coercive, in the sense that the allure of the cash is too great to ignore. In 2017, a federal court ordered the EEOC to reconsider a rule limiting “wellness” incentives to 30% of the cost of insurance coverage, but no expert disputes that some limit exists.
That’s a problem. To take the position that a company can fire a worker who refuses the shot but can’t reward the worker who accepts it doesn’t make logical sense. Of course the payments should be too large to ignore — that’s how we get people vaccinated. If there are legal issues, we need to find creative ways around them. For instance, we might award some level of compensation to employees who assert bona fide medical or religious reasons, to lessen that sense of “coercion.” What we mustn’t do is make it harder for employers to provide incentives to workers to join the national push to overcome fears that the vaccines are too risky.
The principal criticism of the incentives is that paying the hesitant is unfair to those who’ve already done their duty and been fully vaccinated. But we’ve just about exhausted the list of those moved by altruism or the fear of contracting the disease. That leaves us with tens of millions of the so-called vaccine hesitant. Giving them an additional incentive isn’t unfair. It’s pulling on a new lever when the old one no longer gets the machine moving.
Another name for this is learning from experience. People judge risk differently — and that includes the risk of the vaccine. Most experts think the risk is low compared to the benefit, but lots of folks obviously disagree. Compensating them for the additional risk they believe they’re taking on is entirely rational.
Although the country is reopening, the emergency isn’t over, so this is no time to be stingy. One way or another, if we’re going to reach herd immunity, we have to get shots into more arms. Unless we’re prepared to mete out a lot of punishments, we’d better be willing to hand out a lot of rewards.
Bloomberg
