The Nonvoluntary Price of Labor

Labor is a scarce factor of production.  It must be economized.  Labor is bought and sold on the market.  The price paid for labor is determined by supply and demand.  It’s ridiculous to talk about the supply of labor without discussing the price.  One may have certain unique skills.  This could command a higher price.  Another may possess very common skills.  This may command a lower price.  You must acquire skills in demand to command a high wage.

The wage people decide to work for is a voluntary wage.  A third party saying the wage is too low doesn’t help them.  Worse, a law could be implemented about the wage.  What the individual chose voluntarily is now illegal.  They’re involuntarily unemployed due to those that think they are helping.  Now, that unemployed individual has to earn money elsewhere.  It will more than likely be less productive than their original choice.

Unemployment is not something that happens on the free market.  Sure, people can lose jobs.  There will be lag time between employment.  However, a job will be available.  The wage rate, field, etc., may not be acceptable to the newly unemployed.  He’ll remain jobless until one that satisfies him is available.  This would have to be considered voluntary unemployment.  A job is available, just not one he is pleased with.

If you believe you deserve more, the answer isn’t to have the state implement a mandatory wage.  Fixing prices always leads to a shortage or surplus.  A shortage in this case.  Demonizing the employer that provides you with the best option is a horrendous strategy.  Low paying jobs are low skill jobs.  That means it’s easier to automate those positions.  Going through the state to increase your wage rate might end up decreasing it to zero.

Finding a new and higher paying job is made more difficult by the state.  The state implements preferential policies for a few.  Otherwise, there would be multiple employers in a field.  That is, the state allows a monopoly or quasi-monopoly to exist.  In the asinine logic of some, a problem created by the state should be solved by the state.  You may be unhappy with your wage rate.  However, the state isn’t your savior, it’s the antagonist.

Reference

Ludwig von Mises; Human Action

One thought on “The Nonvoluntary Price of Labor”

Comments are closed.