What is labor freedom? Labor freedom is the idea that both the employee and employer should be able to negotiate terms of work without being subjected to government regulations.
Measuring the extent of labor freedom can be difficult, but the Heritage Foundation put together a list of six factors to do so, in their annual Index of Economic Freedom for 2014. Beginning in the early 19th century, there has been an undermining of labor freedom. Labor unions have lobbied for more regulations such as minimum wage legislation, overtime pay, mandatory benefits, and unemployment insurance. The power and influence of labor unions in the political discourse of the West was prominent until the 1980’s when a surge of neoliberalism began to shackle their prominence. Since then membership has continued to decline in Europe and North America.
Despite this, the regulatory regime created during that time remains quite intact in the 21st Century, with many political forces continually asking for stricter standards. Recently the New Democratic Party’s leader, Thomas Mulcair, has proposed a federal $15 minimum wage. Minimum wage legislation like this is a blatant infringement on freedom. It’s completely unacceptable for the government to impose a minimum price on our labor. That is between the employee, and the employer. Beyond the pure immorality of minimum wage, it is economically unsound with a number of unintended consequences. For instance, raising the minimum wage means that one of the factors of production, labor, is now more costly relative to capital. This results in the need to make up for it by either decreasing the costs of some other factor of production or putting the cost on to the consumer through higher prices. Minimum wage legislation also decreases employment opportunities for youth, because employers may not be able or willing to hire those with less experience.
Read the rest via In Defense Of Labor Freedom | Students For Liberty.