Monday, November 18, 2013

Some "Free Country": Why is it Illegal to Trade with an Employer?

One of the most basic components of liberty is freedom of trade. Yet in this "free country", it's illegal for me to make numerous trades with an employer. Back in the days when I was young and unskilled with no work history, I looked for months before I could find someone willing to hire me. There was plenty of work to be done at hundreds of businesses around me, but I wasn't allowed to do it and build the skills and reputation needed to start climbing the ladder. All because I wasn't productive enough, or at least could not prove that with a work history.

Why wasn't I productive "enough"? I was productive- just about anyone can do hundreds of basic jobs with no significant training costs. But I wasn't productive enough because there was a barrier that neither I nor my potential employers had any control over. I had to be worth a specific amount of money per hour- something north of $8 once all employer costs are counted. Sounds bizarre, arbitrary, and unjust, right? It is, and it is called the minimum wage. And it's still outlawing jobs today, and many people that want to raise this barrier even higher. Worse, they actually think they are being helpful and caring.

But the minimum wage doesn't increase anyone's productivity. It only outlaws the employment of anyone who doesn't have the ability to produce whatever arbitrary value is set by the state. As a result, those people, which I was one of, earn a wage of $0.00. They miss out on an income, the chance to build their skills, and establish a work record; and our economy loses out on their production and is that much poorer as a result.

Though I eventually made it past that barrier, I continue to face others just as arbitrary and unjust. Where I'm currently employed there is no shortage of work to be done, and by supervisors are very happy with my productivity. Meanwhile, my budget is tight and I'd be happy to trade additional hours of labor to increase my income. It's another trade that benefits both of us, but it's illegal.

The same federal legislation that started the minimum wage barrier is also outlawing other trades. I can't work more than 40 hours a week without my employer being forced to pay an "overtime" rate of 150%. They can't afford to do this right now, so I do not have the opportunity to easily increase my income and they do not have the opportunity to benefit from the extra labor of an experienced employee.

As a result, I and many others in my shoes are forced to look for a secondary job elsewhere to get the same number of hours per week (say, 60) without overtime pay rates. Overtime pay law does not actually give us extra pay, it only instead limits choices for workers like me. Choices I would certainly make- just consider the extra costs I face by working for two employers instead of one. Upfront, I'll have to hunt for the job, interview, deal with training; and then daily face an extra commute and uniform changes, all while balancing the schedules between the two. The math quickly becomes clear: I'd be much better off doing over 40 hours with just my current employer - but once again people that think they are helping workers are just making life a whole lot harder for them.

If you're the average reader, you're supportive of the web of regulations in place today, including minimum wage and overtime pay. Do you realize the harm you are causing with these policies you support, which limit choices for employees, reduces our productivity (and thus the whole economy's), and violates our most basic liberties such as freedom to trade? How can you possibly justify this? Let us make our own choices, and you make your own. Everyday issues like these is why I am a libertarian, the only ethically, economically, logically sound political philosophy I can find.


  1. We've made our own choices, Matthew. We chose to enact labor laws mandating minimum wages, overtime pay, restrictions on child labor, etc. If you don't like it, you can "dirty your hands" by engaging in the democratic process (anathema to an anarchist, no doubt) in an effort to change the laws back like they were in the good old days when Americans were "free" to work 60 and 80 hour work weeks for pennies an hour (less than $3 an hour in today's dollars). Or you can "vote with your feet" and sell your labor in the competitive global labor market -- there are plenty of countries (Sierra Leone, Bangladesh, and Kyrgyzstan come to mind) where you can sell your labor for much less than $7-8 an hour if you want to without some nasty government insisting that your employer pay you more than pennies an hour.

    I'm sorry you're not valuable enough to your employer to work more hours and get paid overtime wages, but that's not true for everybody. Overtime pay law DOES give many workers extra pay. And here you are wanting to get rid of those laws and put those people in a position to join you in a race to the bottom. Nice.

    Of course you're right that minimum wage laws limit peoples' abilities to work for very small amounts of money, and if the government is going to do that, it ought to make up for those lost wages by paying unemployed people the equivalent of the minimum wage. But I'm sure you don't like that idea either, because, you know, government.

    1. As usual, you can be counted on to promote the most anti-libertarian position possible.

      1. No, you haven't just made your own choice. You're making mine, too, by force. Who the heck do you think you are to do that?

      2. I don't need to sell my labor for less than $7-8 anymore. As noted, I've crossed that barrier. But a minority of people have not, and I still want to help them (and the rest of us).

      3. Overtime pay will occur in a market economy. Workers value and require their scarce time. The more hours you ask them to work in a day or week, the higher premium they will demand. Overtime pay law just sets price-fixing, arbitrary rules preventing a lot of people from getting extra pay and likely benefiting a few who do get more pay than they could have demanded on the market. So yeah, I grant that some people are gaining from the state's intervention, just like there are winners and losers in all government intervention, the problem is there is more loss than gain (see the economic calculation problem).

      4. "make up for those lost wages by paying unemployed people the equivalent of the minimum wage." Holy mackerel! You actually believe that? Have you considered the consequences of such policy? Right, I don't like it, because it's ethically, economically, and logically absurd.

      I notice you don't seem to address the main question, how can you possibly justify interfering with trade between me and someone else (my employer)?

    2. That's right, Matthew. It's called democracy, and I'm sure that as an anarchist, you hate it and you'll whine about it incessantly. Good luck with that. I'm sure that "minority of people" in America who can't manage to sell their labor for less than minimum wage will stand with you in your fight to get them jobs for $1 or $2 an hour.

      Yes of course the more hours an employer asks them to work, the more pay they'll demand. That ALWAYS works, and nobody would ever be able to find any example anywhere now or at any time in history when workers worked more than 8 hours a day and didn't get paid extra for doing so. Oh wait, as usual, anarcho-capitalist economic theory doesn't bear any resemblance to how things actually work now or in the past.

      Worship a fish all you want, but it doesn't make the nonsense you're spouting seem any less ridiculous. It's really quite simple. If we're going to use the power of government to stop people from selling their labor below a certain level, then we (the government) should, essentially, reimburse the person for the "lost wages". It's the same with things like housing standards. If we pass laws creating minimum housing standards that end up making housing unaffordable for a minority of people, then we (the government) should provide them with adequate housing. There's nothing ethically or logically absurd about it, and while it might not fit in with your notions of "free market" utopian anarchy, I think it makes plenty of economic sense here in the world as it is.

      I addressed the main question, Matthew. Removing minimum wages creates a race to the bottom. We've seen it happen in the US in the past, and we can see it still happening in many developing countries. You want the opportunity to "build the skills and reputation needed to start climbing the ladder"? Head over to Bangladesh and get yourself a job sewing in a garment factory for $37 a month. Although I suppose it might still upset you that even Bangladesh has draconian labor laws that set the minimum wage at $36 a month. I mean, damn, don't they care about all those lovers-of-liberty who want to work for $35 a month?

      See, setting standards and restricting trade isn't that hard to justify, Matthew. We restrict child labor, too. I'm sure that you, like Newt Gingrich, consider that a great affront to liberty, but it's really quite sensible. Of course, again, it works best when we (the government) find ways to reimburse people for the lost potential income they lose by not sending 8 year old to work in mines, factories, brothels, etc. But I'm sure that you find that notion ethically, economically and logically absurd.

      And yet you seem to have no problem with the notion of interfering with trade between a woman and the medical professional terminating her pregnancy.

    3. So you justify interfering with the trade of two people by invoking might makes right, a.k.a. democracy. That doesn't sound very enlightened.

      "Yes of course the more hours an employer asks them to work, the more pay they'll demand. That ALWAYS works..."

      As I just noted in a previous comment, you have a real problem with strawmen, and you only look silly hanging out with them. Nowhere did I argue that in the market, when a worker exceeds your arbitrary 8 hour mark, they will be paid an overtime rate. Good grief I just said in my post I wanted to work more than 40 hours a week at my regular pay rate.

      Of course there is something wildly askew with the ethics of pointing guns at people so you can run society your way, i.e. outlawing some jobs (or housing) and making the rest of us pay those who can't get jobs. And just as much so economically... the incentives to be productive and work in your world are much lower than mine. A marginal increase in income- moving from the minimum wage you would pay everyone to just slightly above that- would come at a tremendous cost: getting a job and keeping it for long enough and working hard enough to increase your productivity enough to get higher than minimum wage pay. Do you know what some people in this situation would do in your system- mostly kids by the way- when faced with such a high cost to slightly increasing their income? They will choose not to work, or work "under the table". As for the rest of your potential workforce, they will certainly delay getting work when they have access to free money. It's a recipe for mass poverty.

      "Removing minimum wages creates a race to the bottom."

      And yet that doesn't bear any resemblance to how things actually work. More than 95% of just hourly wage earners make more than the minimum wage. Because wages are driven by productivity, not dictated by cruel, greedy employers.

      And yet you seem to have no problem with the notion of interfering with trade between a woman and the medical professional terminating her pregnancy.

      Just like I have no problem interfering with a hitman and his employer. I'm consistent; you're not. You pick a few liberties to defend, like getting an abortion or free speech, but trash the rest.

      Bottom line, you advocate organizing society with your plans and pointing a gun at those who disagree. It's a very brutish, destructive, evil, and indefensible concept.

    4. Your desire for some bizarre sort of neo-feudalism doesn't seem too damned enlightened, either. But it's funny to see you whine and cry about all the nasty statists who won't let you sell your labor for pennies.

      As for your "recipe for mass poverty", you might try taking a look at the real world. The mass poverty is most often found in countries with low or no minimum wages and no safety net. Countries with higher minimum wages and stronger safety nets have less poverty.

      Yeah, of course wages are driven by productivity. Which is why, since the minimum wage has kept up with increases in productivity, it's now over $20 an hour. Oh wait, it's not, is it? I suspect that has something to do with cruel, greedy employers.

      You're not consistent either, Matthew. And your pathetic attempt to equate abortion with assassination makes that clear. Do you get a kick out of thinking about how you'd like to "interfere" with women who have abortions, if only those brutish, destructive, evil, nasty "statists" would let you defend your right to force women to remain pregnant against their will?

    5. Ok, so its funny that thugs won't let me work for my regular pay rate at the same job, forcing me to consider taking up a second job which will pay the same but come at great inconvenience. What a sick, twisted sense of humor.

      As for you plan that will cause "mass poverty", it's interesting that you decided to just ignore my rebuttal and drop a whole new argument for your plan. You've taken two variables, "minimum wage/safety net" and "rich(er) country" and implied one causes the other, when there is no reason to believe so at all. In reality a richer society can better afford the negative impacts of your interventions; the poorer can't so much, so they sometimes have less vicious economic policies.

      Yeah, of course wages are driven by productivity. Which is why, since the minimum wage has kept up with increases in productivity, it's now over $20 an hour.

      Gee, I never said the government's decreed minimum wage was driven by productivity, did I? Nope, that's just Mr. Strawman embarrassing you again. You've got to get away from that guy...

      "You're not consistent either, Matthew. And your pathetic attempt to equate abortion with assassination makes that clear."

      How so? Is not assassination murder? Do not "pro-lifers" believe abortion is murder?

    6. Yes, it's funny that despite the comfortable, privileged life you've led, you constantly whine about all the "thugs" that won't let you do whatever you want.

      Your constant and usually inappropriate mentioning of "Mr. Strawman" ought to be embarrassing you, but I'm sure it doesn't. But hey, I guess there's little else you can do when you can't point to all those examples (in the real world, not in anarchist fantasyland) where high minimum wages have led to mass poverty.

      If wages increased with productivity, the minimum wage would be over $29 an hour, with no need for a government decree. That hasn't happened.

      Some "pro-lifers" probably believe abortion is murder the same way some vegans probably believe killing animals is murder. But if those "pro-lifers" also claim to believe in self-ownership and bodily autonomy, then they're being pathetically inconsistent when insisting on "interfering" with trade between a woman and the medical professional she's asked to terminate her pregnancy.

      It takes a seriously self-absorbed, privileged whiner to complain about "thugs" interfering in his decision to work for $1 an hour while insisting that he's a lover of liberty and not a "thug" himself when he claims a right to force women to remain pregnant against their will.

    7. The arrogant incoherence of your comments here are hardly worth responding to anymore.

      1. You don't know a thing about the "life I've led". But you laugh at the negative impacts of your favored policies on those who can least afford them.

      2. "Mass poverty" referred strictly to your plan to pay the unemployed minimum wage. I haven't described the minimum wage as it exists today in the U.S. as something that causes "mass poverty"; that would be an exaggeration. Needless to say, that was another strawman of yours, and I'm not embarrassed to point out your errors.

      3. The minimum wage is not a market wage, but rather a price floor set by the state. Thus, it is profoundly ignorant to write "If wages increased with productivity, the minimum wage would be over $29 an hour, with no need for a government decree."

      4. "But if those "pro-lifers" also claim to believe in self-ownership and bodily autonomy, then they're being pathetically inconsistent"... only if they do not defend the right to life of the child- because they hold the child has "self-ownership and bodily autonomy" as much as the parents, who voluntarily created the child.

    8. 1, You keep whining, I'll keep laughing.

      2. Many countries provide a strong safety net, certainly higher (relatively speaking) than the minimum wage paid in the US, yet they aren't suffering mass poverty. That's reality, regardless of what you prefer to imagine in your anarchist fantasyland.

      3. Neither the average wage, nor the minimum wage, has kept up with the average increase in productivity over the last 50 years. Thus, it is profoundly ignorant to insist that (in the real world, not anarchist fantastyland) wages increase with productivity.

      4. Or if they're twisted, misogynist degenerates who treat women as incubators rather than as equals, all the while claiming to be lovers of liberty. Because however it's meant to work in anarchist fantasyland, here in the real world, not every fertilized egg is created voluntarily. And as much as it might gall some of those "pro-lifers", choosing to have sex isn't the same as volunteering to get pregnant any more than choosing to cross the street is the same as volunteering to get hit by a bus. And even if a woman has chosen to get pregnant, she can't have true self-ownership and bodily autonomy if she can't withdraw consent to having the "child" growing inside, and deriving nourishment from, her body.

      That you whine about the "negative impacts" of being paid minimum wage, overtime etc. while insisting that forcing women to remain pregnant against their will is somehow "pro-life" tells me plenty about the life you've led.