The Free Market on Jobs and Productivity

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A Free Market Capitalistic model thrives on the idea that the business will provide a valuable service and will grow and expand through success. Therefore, issues such as minimum wage, health care assurances, and union practices are particularly detrimental to the business as it is forced to play by one-size-fits-all regulations.

Minimum Wage

Minimum wage is a construct that forces businesses to hire as many people as they can for a wage that may be unnecessary for the job in which the employee is working. As a result of this, the business is unable to afford to hire as many employees as it may deem necessary because the government requires that all employees are paid at a determined minimum wage.

Therefore, the business may not be able to stay afloat due to staffing needs and workers who would be willing to work for less money and gain valuable on-the-job experience are denied the opportunity to work. By creating a minimum wage the government is telling the employer that regardless of productivity the employee must be paid a set salary.

While there is potential for termination, there is no room for lowering ones pay depending on where they begin (this makes reprimand less likely and only guarantees a base level of productivity for certain positions).

Read our full article on how damaging minimum wage is to the poor.

Health Care Assurances

Under the Affordable Care Act (ACA) passed by President Obama any employee who works 30 hours a week or 130 hours a month is considered a full time employee (along with a few other technicalities) and must be offered health care coverage from their employer. While this sounds fair, the harsh reality is that businesses are cutting peoples hours or not hiring full time employees so that offering health care can be avoided.

So while around twenty million Americans have gained coverage following the passing of the ACA this has been at the expense of typically low wage hourly employees who are losing hours of work due to employers looking to avoid offering coverage.

In fact, it has been suggested that a portion of the decrease in unemployment is due to the fact that employers are hiring two (in certain cases) part time employees instead of one full time employee. So, without this particular government regulation there would potentially be less jobs but there would be far more real jobs.

Union Assurances

Unfortunately many Americans are faced with the issue of having to decide between having a job at a particular business and whether or not they want to be part of the union that is associated with that business.

Unions, under American Labor Laws, are not necessarily forcing employees to work for the union in “Right to Work States” meaning that union dues are not necessary to be paid to receive the benefits of the union. This is more of a moral dilemma than economic.

However, in cases where unions are considered “forced association” the entity of a union will strangle the market for several reasons. For starters, unions tend to be rather large entities and are capable of being selective for workers meaning that non-union jobs can be very hard to come through in certain industries.

Unions can be popular because of the benefits that are offered by the union, particularly the overtime benefits. In many, union type professions the margin for overtime profit is tremendous and work may be incited by union employees to be performed at a slower rate so that more money is accrued per paycheck.

In Short

The result of these examples is rather clear that when more regulations are placed on a business, it gives the business less opportunity to grow. While having jobs is important for an economy, there is a clear distinction between a large workforce and productive work force. That being said quality over quantity is true in this scenario and the only way to assure that is less government intrusion.


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Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants - but debt is the money of slaves.

- Norm Franz