A Labor Day Program for Freeing Labor

Nothing is more central to human flourishing than work.  Other animals expend energy to survive. But man evolved to make conscious toil for food and shelter. This aspect of our heritage is reflected in a psyche that for most still requires work for contentment.  Sigmund Freud was not right about everything, but he was certainly correct that love and work are the necessary conditions of a satisfied life.

While modern America has cleared out obstacles to love, however unconventional, it has put up more and more impediments to work.  Begin with the tax code. It raises most income from labor, not consumption. As a result, the government discourages work more than is required to run its operations. Nor can the decision to tax labor heavily be justified by concern about inequality.  For those who want their taxes progressive, a consumption tax can be made as progressive as an income tax.

Second, minimum wage laws prevent the least talented and able among us from participating in work. The fifteen dollar minimum wage favored by the  2016 Democratic platform would prevent many from earning an honest living.  The effects will be even greater in the long than the short run, because employers will over time then substitute more machines for unskilled workers. We would be outraged if laws prevented some people from marrying. We should be similarly enraged by these laws. If it is thought that some jobs pay less than needed for a dignified life, governments can top up wages through an income tax credit.

Third, as my high school friend Nicholas Eberstadt showed recently in the Wall Street Journal, generous disability laws lead some citizens not to work. A far greater percentage of people are today judged disabled than in the 1950s, although the health of Americans has substantially improved since then.  The result is that the able “disabled” live in isolation with no civic engagement, spending their time watching TV or playing video games.

Fourth, even the Obama administration has complained (link no longer available) that too many states have licensing laws that prevent unnecessarily prevent people from working in their chosen trade.  It is not necessary to study for two years braid hair or to take courses in aesthetics to design apartment interiors.

Labor Day is the traditional kick off of the campaign season.   And we are sure to hear many speeches about the dignity of work and no doubt some about exploitation of workers by employers. If only a candidate would put forward a systematic program to dismantle the government forged manacles that make hands idle.  Move from an income toward a consumption tax, oppose raising the minimum wage, reform disability laws, and streamline occupational licensing!  Such a program would increase personal as well as economic growth.