You Is What You Is
Let’s be clear upfront; the strongest voices against labor are among those who ostensibly advocate on behalf of…labor. It is an odd dichotomy to be sure and one that at first blush seems counter intuitive. Yet, a cursory examination, along with some basic economic knowledge will show that today’s labor “advocates” are indeed those who do the most damage to the cause of labor. They are demonstrably anti-labor both in terms of the public policy they advocate, and they are anti-labor as part and parcel of their cultural worldview. This week I will look at the anti-labor policy that is pushed in the name of labor. Next week I will examine the anti-work culture that permeates much of modern society.
Anti-Labor by Policy
The first most glaringly anti-labor policy that is universally supported by labor “advocates” is an increase in the minimum wage. Everyone assumes that an increase in the minimum wage is a good thing for labor. It is a good thing for those in labor unions or those that are productive enough to warrant a higher wage. It is an unmitigated disaster for those at the lower end of the wage/productivity scale. This would include inordinate numbers of young workers as well as people of color, and other marginalized communities.
The reason for this is explained by basic economics. If you raise the price for anything, even labor, you will have less of it purchased (other things being equal). This is not just theoretical, as businesses measure this monetarily. A business will know, with a high degree of accuracy how much additional revenue each additional worker will produce. This is called the marginal revenue product. If the marginal revenue product is $10/hour, then that is typically where the wage will settle for all workers in this group.
It does not take a business genius to figure out that if you force the wage level to $15/hour in an environment where the marginal revenue product is $10/hour unemployment will ensue. Those workers who can produce $15/hour will keep their jobs while those that cannot lose theirs or will never be hired in the first place. This newly legislated environment will almost surely hasten the transition to greater automation, as we see in the foodservice industry. So, while a few are helped, a much greater number of laborers are harmed by this policy.
The real means to increase employment and sustainable increases in real wages is to increase the amount of capital invested per capita. Capital is just a fancy term for tools. More and better tools allow laborers to produce more. If they produce more, they can consume more, as what they produce is their purchasing power. Outright elimination of the minimum wage would be the best practical way to assist labor. Few are trying to live on a minimum wage anyway and there is other assistance available, during the transition to a more productive economy.
Ending the minimum wage would also have the practical benefit of creating jobs for those just starting out; the young and marginalized. This will give them the skills and increases to their personal productivity that will allow them to move into better paying jobs. Allowing a freely functioning market to produce real wage growth is how you help labor, not reactionary legislation.
A second important way that “pro-labor” advocates screw laborers is in pushing for high tariffs. Almost to a one progressive advocates, democratic socialists, etc demand protectionism. We will set aside in this post the way that this screws foreign laborers by denying them productive work, and focus only on the domestic consequences.
Those consequences are overall a deadweight loss for the economy. Certainly some businesses, and the laborers of those businesses gain, but only at the expense of the rest of the workforce. There are many more businesses that face higher input costs because of protectionist policies. For instance, steel companies and their workers may benefit from steel tariffs, but everyone who uses steel (like automakers) now must pay a higher price. This costs jobs and lowers wages. A good example of this phenomenon can be found here. This also ignores the fact that all laborers are also consumers of products and pushing prices higher reduces their standard of living.
Every extra dollar spent on the same amount of goods (even if it is only a small increase) is a dollar that cannot be spent on additional goods and services, and the jobs that go along with those goods and services. Making the economy more rigid and imposing higher prices for the same amount of goods helps only those protected industries with political connections and screws over everyone else. Once again this is statism in the service of an anti-labor policy.
The third area of anti-labor policy is the overall push for a high tax, high regulation economic environment. This broad area covers everything from occupational licensing to regulations that make it dramatically more expensive to bring products to market (like the FDA), to damaging levels of taxation that retard the formation of capital (remember this is just tools) which makes it difficult for labor to become more productive (and wealthier). We should include in this the nefarious entity known as the Federal Reserve.
All these regulations benefit those existing companies and their workers at the expense of newly formed startups and those companies that can now no longer afford to enter a marketplace. It is nearly impossible to measure how many jobs are not created and how much less wages have failed to rise. But we have seen a stagnation in real wages (even before price inflation took root), and real median family income.
Time to Unmask the Vipers
It is long past time when we should be clear about what these “pro-labor” advocates are doing. They are a brood of vipers that serve only to enhance the well-being of their politically connected selves at the expense of the rest of the economy. They funnel unrighteous wealth to their companies and their labor unions and cronies while beggaring everyone else.
All of this has created a situation whereby the economy is more rigid (see this for an example), less dynamic and responsive and less efficient at allocating scarce resources. This damages wealth creation. This damaging effect is centered at the bottom of the economic pyramid, among the young and otherwise marginalized communities. It is on the whole anti-labor in the extreme. It has seen a devil’s bargain between large companies, large unions and large government. This bargain lines the pockets of these groups by emptying the pockets of the rest of the workforce. It is not simply anti-labor, it is inhumane.
It is not difficult to understand why these groups want to do this. They are willing to, in totally immoral fashion, use the coercive power of government to generate unrighteous profits for themselves. What is less understandable is why anyone would let them do all this while at the same time letting them unctuously parade around as being pro-labor. This is the height of hypocrisy and if we do nothing else, we should expose their hypocrisy.
Matthew 10:16 sees Jesus tell His followers that He is sending them out as sheep among wolves, so they should be as shrewd as snakes and as innocent as doves. The wolves are those politically connected entities and “pro-labor” advocates. It is high time we as shrewdly as a serpent call them out for the rapaciously hypocritical anti-worker parasites they are. That’s the best way I can think of to act as a dove this Labor Day.
Praise Be to God