Few victims of hardship earn as much sympathy as the “worker.”
The great leftist Karl Marx devoted much of his Communist Manifesto and Das Kapital to an analysis of the struggles of the gentle laborer, abused by an unforgiving system. Today, the left wing of British government calls itself “Labour” in honor of those poor workers who it represents, and in America the labor unions form an institutional lynchpin of the Democratic Party.
With jobs being so important an aspect in political discourse, a question is begged: what role ought the government play in the protection of the worker? How does one best defend the employee from the abuses of the market?
There is an idea that is rather popular amongst those who are “progressive.” Minimum wage laws, they claim, will ensure that workers are justly compensated. The logic behind minimum wage laws is simple: employees are sometimes taken advantage of, and underpaid. Therefore, to protect them, we ought to mandate that employers pay their employees well.
But the simplicity of the argument disguises several flaws. Let us first consider the assertion that employees are “underpaid.” To say that someone is paid less than he or she is worth is to assume that there is a “real worth” to each person’s labor. This position is philosophically untenable. What defines the “real worth” of any good or service? The answer is, of course, the consumer.
It is the consumer who ultimately has the choice to purchase a product. If they choose not to buy a specific commodity, it is because that commodity is not worth as much to them as the person selling it thinks it should be. I personally don’t enjoy seafood very much. When I go to a restaurant, I often find that the fish is more expensive than a hamburger. If the fish were much less expensive than a burger, I might purchase it. But since the restaurant has set a presumptive price, I will instead happily settle for a burger.
The economic value of anything is subjective. Others will order fish every time; I will not. Neither the seafood lover nor the seafood hater is right or wrong. They each have a moral right to decide what they want to eat.
The question of the consumers’ rights to choose how to spend their resources is fundamentally a question of liberty. Economist and social theorist F. A. Hayek explained the point well when he wrote in The Road to Serfdom, “Economic control is not merely of a sector of human life that can be separated from all the rest. It is the control of the means for all our ends.” Sometimes, it might not seem so important that we have the right to choose how we spend our money. But Hayek elaborates: “So long as we can freely dispose over our incomes and all our possessions, economic loss will only deprive us of what we regard as the least important of those desires we were able to satisfy… Economic matters seem to us less important precisely because in economic matters we are free to decide what is more and less important.”
Now, I ask of any proponents of minimum wage: what is any employer but a consumer? And what is any employee but a producer? The employee produces a valuable commodity: labor. The employer seeks to amass as much of that commodity at as little cost as possible, just as, when we shop for groceries, we like to find good bargains that allow us to purchase more for less. Thus it is that the employer has the right to pay whatever price he sees fit. Just as I may choose to purchase fish only if it is offered at a certain price, an employer may justly choose to purchase labor at a price affordable to him.
But just as an employer can pay whatever he likes, so too can an employee charge whatever he likes. If I go to work for a company that offers me less compensation than I think I am worth, I am not forced to sell my labor to that company. The restaurant manager will sell expensive fish to someone other than myself, but will likely not make exception to give me cheaper seafood. I can sell my expensive labor elsewhere – and I will, unless the company meets my own demands.
Marx, however, spoke of the concept of “wage slavery.” Essentially, he argues that workers do not truly have a choice – the necessities of life that press upon laborers cause them to be forced into positions in which they are legitimately abused, and from which they have no escape.
There are several problems with this idea as well. Firstly, for wage slavery to be deemed a legitimate place for governmental intervention, it must be proven to be widespread. If ninety-nine of every hundred employees have accessible alternative work, then it would be wrong to violate everyone’s liberty by imposing a blanket minimum wage to protect a single person.
Secondly, minimum wage itself is but another form of wage slavery. It might sound ridiculous at first to suggest that someone wants to work for lower wages than they would receive under minimum wage laws, but practically it is often quite true. For example, an employer may not be able to afford to hire inexperienced, part-time employees if he has to pay them a high minimum compensation.
Now, we’ve established, in accordance with Marxian theory, that people must have jobs. Laborers are “wage-slaves” because they must seek employment for the simple sake of subsistence. Unfortunately, thanks to our hypothetical minimum wage, the employer can no longer hire a part-time and inexperienced worker. Thus we are left, under minimum wage, with a person who must have a job, and yet cannot get it – unless, of course, he meets two specific criteria: experience and the ability to work full time.
If this laborer was enslaved to his job before, how much more so is he now! He must give more of his life, sacrifice more of his freedom, for the sake of his job. There are plenty of people who gladly pursue lifestyles of part-time employment and pursue hobby experience instead of professional experience. There is nothing wrong with this whatsoever! If someone wishes to work part-time at a McDonald’s to support a life of skiing and mountain biking, then they should be free to do so.
But with a minimum wage, the employer has no choice but to raise his standards – and thus the mountain-loving free spirit is forced to gain more professional experience, to sacrifice more of his time to his job – in short, to lose even more freedom in order to meet subsistence.
Minimum wage laws are not only wrong because the violate the basic liberty of the consumer. They are wrong because they violate the liberty of the employee as well. If wage slavery is a problem, then it is only exacerbated under minimum wages. If we value freedom at all, then we must reject the minimum wage.