As you well know, in the case of labor, there are two markets: the marketplace of employers choosing their employees, and the marketplace of employees choosing their employers.
It is legal — and perhaps even rational sometimes — for an employer to say “do it my way or I’ll fire you,” as long as the employer’s conditions are legal.
But, on the flip side, in a free market, it’s legal and perhaps rational for employees to say, “do it my/our way or we’ll leave and find another employer, or start our own competing company or co-op.”
As long as such employees aren’t violating laws or non-competes, they are free to do the above.
Employers may retort: “Fine, leave, we’ll find others,” and employers have the right to seek willing replacements, so long as no labor or trade laws are broken.
This is all to say that a free market doesn’t work in one direction, where the employer by default has added leverage. Leverage, in a free market, is earned through legal competition and aided by supply and demand.
Why belabor this point? Because it’s often presumed by employers that they are owed something extra.
It needs to be restated: Employees owe nothing to employers outside of meeting contractual agreements.
Employers must compete for employees, just as employees must compete for employment.
In a free market, both parties come to the negotiation table representing their own interests.
If either party loses this negotiation, there’s no sense in blaming the government.
The market being free simply means competition plays out within the limit of the law.
“Within the limit of the law” may beg the question of whether the laws are tipped in favor of one side or the other and whether that’s fair.
In any case, it wouldn’t change the reality that employees, just like employers, are seeking rational self interest in an established system, playing laws to their advantage, exploiting demand and seeking to maximize their own profit—no different from what many successful capitalists do.
Whether you’d like to see leverage in the hands of employers or employees could be a matter of personal taste; or perhaps comes from seeing data you believe shows evidence that one side having an edge of leverage against the other routinely leads to better outcomes for everyone.
More likely, whether we are employers or employees ourselves adds bias to our attitude. So let’s take attitude out of the equation.
The bottom line: Given our laws, employees can seize more leverage. If and when they do, it’s not suddenly a shift to socialism or communism. It’s more accurately free market capitalism at its finest. After all, free markets are driven by profit motives and self interest. Why would we expect employees to abandon a “shameful and misguided” self-interest while employers get to maintain that same self-interest unapologetically, and even be praised for it? That would be an irrational double standard and inconsistent with free-market ideology.
In the face of employee pushback, an employer is free to voice their opinions, e.g. 1) employers work hard to build and run companies and should thus morally retain absolute power over their creation, and 2) labor/wage laws are antithetical to incentives to innovate and improve society.
Whether there’s any merit to these opinions, they are not free-market based opinions. They are appeals to morality and utility. Not automatically wrong, per se, but irrelevant. Because in a true free market employees have the right to compete against employers for more power/wages.
While labor laws are not entirely consistent with laissez faire, they are — as of now — generally consistent with democracy. Our labor laws haven’t been dictated by authoritarian leadership. Instead, labor laws reflect the will of the people through free and fair elections.
If that argument doesn’t hold sway, consider this one: labor laws reflect the spirit of the constitution regarding general welfare, life, and liberty.
For example, most Americans don’t believe that young children working for peanuts out of desperation is consistent with the constitution. There are many examples where pure laissez faire is unAmerican. Slavery being the most obvious. Corporate lobbies using vast wealth to influence public policies and subvert democracy is laissez faire and yet most consider that unAmerican, too.
Human society is ever-evolving, thus laws around labor must evolve, too, to preserve the spirit of the Constitution. Definitions of general welfare and liberty are not fixed; they must evolve along with our technology and systems.
That’s why I’m pro-union, pro-cooperative, pro democracy, pro UBI pilot programs, and ultimately, pro-Marxism.
- ever tried that?