This essay was first published in 2013 and is revised if needed and republished annually for as long as its premise remains relevant.
On Labor Day, we rightfully honor the hard-working people who made this country the greatest nation in history, and who strive to keep us at the top. I hope you enjoy the holiday.
Regrettably, this is also the time of year when a cacophony of voices is heard imploring us to raise the minimum wage. It seems that most Americans tune this out. Not that we’re callous toward those in need, but we disdain guilt-trips.
Of course, paying a just wage is a moral imperative. But it’s ironic to me that many of the same people who want to legislate morality by way of a higher minimum wage law are generally dead-set against legislation that addresses other moral issues.
Moreover, for those who believe the minimum wage should be governed by the government, I pose this question: Is it the rightful role of the federal government, or a government at any level, to meddle in commerce this way?
Now, I get that the U.S. Supreme Court in the United States v. Darby case unanimously affirmed the Constitutional legality of the Fair Labor Standards Act of 1938 which has since spawned all sorts of laws and regulations imposed upon our otherwise free markets. However, as I understand the ruling, the court’s opinion was limited to interstate commerce, not all commerce.
Second, I am a strong advocate for the health, safety, and security of employees. It should be treated as a top priority over everything else. Employers who do not get this should get the book thrown at them. However, the “book” should not be the ever-growing Federal Register of laws and regulations. Rather, it should simply be the Preamble to the Constitution of the United States which states, clearly and concisely: “We the People… [ are to ] promote the general welfare…” There were no exceptions, and so this is both the responsibility and benefit of every citizen and business leader.
Nevertheless, unlike some modern interpretations of the general welfare clause, our founders referenced our “unalienable rights” that they knew to be God-given. These natural rights, if you will, include “life, liberty, and the pursuit of happiness.” They did not see fit to even imply that a “nanny state” should come to pass. And, yet, that is the direction some want to take America today without the courage of their convictions in using the amendment provisions of the Constitution to tinker with the social contract. Happily, although the condition could prove terminal, it appears that more and more Americans, including young adults, are willing and able to come to the aid of their country.
Moreover, and as a very practical matter, legislators and regulators who want to continue to play social and economic magicians are unable to mount a legitimate claim in their defense. All of their political, social, and constitutional tinkering has not been of general benefit to Americans. Of course, if you want to use the growing ranks of Americans benefiting from some form of tax-payer funded federal program as “progress” you could. But, I’m not sure that even today the majority of Americans would agree. After all, with an estimated 1,000 or more federal social programs in operation today, and how can anyone deny that we have created a monster. Who among us has a good working knowledge of our federal government and therefore can hope to monitor it and hold our elected officials accountable?
More to my main point, I think history clearly proves that the nanny state concept is, at the very least misguided. How so?
Free enterprise and free markets are clearly losing ground to the big government, big business, and big labor triumvirate (The BGBLT). Smaller to medium-size companies simply do not have the financial resources and people to fully understand and comply with the growing number of laws and regulations. Larger companies can use this to their advantage and thwart competition from their smaller rivals. Big business can actually survive and thrive under oppressive and unduly restrictive laws and regulations. Unless they go underground, smaller businesses can’t; they are likely to simply choose not to endure the hassles and close-up shop.
A classic example of an oppressive law that ordered even more oppressive regulations is Obamacare. It prompted many businesses to rethink their growth strategies. I expect that if it’s not replaced soon by a market-driven alternative, we’ll see many more Americans including debt-laden college students become dependent on two or more part-time jobs in order to make ends meet. And their struggle will be exacerbated as their health care premiums continue to rise because of the shrinking tax-payer base and the Obamacare subsidies for older people.
I’m also convinced that many big businesses will not be able to resist the temptation of passing off their healthcare costs onto the state and federal government. This unintended consequence of the law was not foreseen by many state officials who all too eagerly supported it. Obamacare is simply a poorly written insurance marketing program disguised as healthcare reform. History will show that it solved very little except for that which should have been addressed through market-driven bipartisan reform measures.
Democratic Party through Senate Majority Leader Harry Reid, D-NV, made it clear during an interview that Obamacare was intended from the onset to a single-payer, national healthcare program. Is this Trojan Horse what the doctor ordered? Is thist what America was sold —or wants?
Of the three members of the triumvirate, only big labor’s fortunes seem to be waning. According to the Bureau of Labor Statistics, membership in labor unions has plummeted over the last fifty years except in the public sector where an increasing number of government workers seem to think they need protection from themselves.
The reason for the decline in private sector union representation is simple. Gone are the days when people would accept being treated as human capital. The labor unions played an important role when this was the common attitude among business leaders but it certainly is not any longer. Wages, benefits, health, and safety have all improved over the last century to the point that unions have generally out-lived their usefulness.
Interestingly of late, although it appears most labor leaders are still in favor of Obamacare, they have become very vocal in their warnings and concerns about some of its unintended consequences, including the negative impact on the 40-hour work week which is likely to lead to more part-time jobs and less full-time ones as mentioned above.
Meanwhile, under the Obama administration, big businesses are flourishing. The stock market recovery is a testimony to how much they benefit from cheap interest rates, bloated budgets, and rising levels of tax-payer debts. Don’t believe me? Look at the recent ups and downs in the markets. They generally track with the Federal Reserve policy statements, and any mention of austerity measures by the administration or Congress.
The economic future of “land of the free” seems to be laser-locked into the sites of economic top guns who seem to care little about what small or medium-size businesses want or need, and by extension the tens of millions of Americans employed by them.
I’m not sure how any clear-minded civic leader or economist can believe that it is in the best interest of the country to sustain an environment in which fewer, stronger businesses thrive while their smaller peers struggle just to survive.
Perhaps what’s needed, along with plugging our ears at the end of each summer, is to change the holiday’s name to Labor Independence Day. This could help increase the awareness and promotion of true free-market principles.
Of course, there’s a lot of work to do. Administering the aid needed by our country includes the challenging tasks of finding, nominating, and supporting the right candidates. Each one should demonstrate a strong belief in true free-market principles as the best treatment to help rid us of the nanny-state.
Admittedly, this is more challenging as more Americans become dependent on the government to make ends meet. Challenging, yes, but not impossible. Just remember the odds our founders faced when they decided to take on Great Britain, and that the colonies were greatly divided over the course of action. Sound familiar?
Please celebrate responsibly.
— GCF —
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