Labor Day, Minimum Wage, and Freedom of Labor – Do They Work Together?

It’s September again, and for the most part, Americans had Monday off from work. Our annual passage from summer to fall, the three-day Labor Day weekend, just passed us by. Unfortunately, it didn’t go by quietly. There were more calls from progressive socialists for their age-old cry for an increase in the minimum wage.

Never mind that the minimum wage hurts the very people it is supposed to help. Never mind that the concept of a minimum wage has been studied by economists for decades and found to be harmful to the economy and to the creation of new jobs. Progressives, socialists, and progressive socialists tug at the heart strings of constituent groups that have never really thought through the real and definite, negative impacts of an increase in the minimum wage. So, let me summarize reality very briefly.

When a government interferes with a Free Market, there are effects. In this instance, the case of a minimum wage, the Freedom of Labor is impacted adversely. Workers can’t as easily “sell” their skills to employers. Why? Because the cost of labor goes up.  The minimum wage is forced by government to increase, and therefore, the cost to an employer for hiring an additional worker goes up.

When costs go up, the number of new employees hired must go down to keep overall costs in line with other budget items that a business must contend with. It is not always possible for a business to lower its other non-labor costs to attempt to compensate for the increased labor costs associated with a mandated minimum wage increase.

The bottom line is simple. If government interferes with the Free Market in labor, it stifles the Freedom of Labor.  A potential employee can’t offer to work for any wage he chooses.  He must take the minimum wage (if any jobs provide it) or often face no jobs at all.  Overall, with higher costs, less new jobs are created in the economy. If you increase the minimum wage, you decrease how many people have jobs.

According to an article this week in The Wall Street Journal, a Congressional Budget Office report states the if the minimum wage is raised to $10.10 per hour, 500,000 jobs would be lost.  With over 90 million American not working this year, shouldn’t we do everything possible to encourage employment and more new jobs?

If you want to read more about the vital importance of Freedom and Economic Freedom (including the Freedom of Labor), please read my new book: Renewing America and Its Heritage of Freedom: What Freedom-Loving Americans Can Do to Help. It’s available now on Amazon and through other retailers.

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