Reflections on full employment and Labor Day

In 1946, the federal government enacted a law entitled the Employment Act of 1946, which is codified in 15 U.S. Code Section 1021.

 As we have celebrated the Labor Day holiday, it is important that we remember what our national policy on employment is supposed to be, and that the policies and laws that are either put into place or advocated today are fundamentally inconsistent with the intent of this law.

The law is general, but far-reaching in its statement of intent, in promoting “full employment,” including “self employment.”  It also intends that the federal government create conditions for “useful employment opportunities.”

 However, what do we have today?

Organized labor and minimum wage mandates increase the pay and benefits of those lucky enough or organized enough to keep their jobs, and of retirees.  However, we pay a huge price in the reduction or elimination of millions, perhaps tens of millions, of opportunities for employment.

One great explanation of what is very likely to happen at employers like Walmart is that the firm will focus more on making fewer, higher-paid employees more productive, as cogently explained by Tim Worstall, a Forbes contributor in this piece published today.

What Worstall also notes is that many “progressive” Americans positively cite Costco, which pays its employees far more than Walmart.  However, Costco, according to Worstall, has half as many employees for the same amount of revenue.

The Employment Act of 1946 was designed to elevate the value of employment and paid work, not to promote an increase in unionized employment to enable elected officials to secure major campaign contributions more easily through union dues.  It articulates a clear preference for having more people employed, versus having far fewer people employed at artificially high pay levels.

Right now, the US has relatively low “unemployment” rates, but it has a very high percentage of Americans who have dropped out of the labor force against their will, because they have given up trying to find a job.

Many of the jobs are part time and temporary. At the same time, there are many full-time job opportunities going begging because we do not have Americans with the skills to fill them.

This Labor Day should be a time at which we step back and take an intelligent, thoughtful look at a lot of misguided federal and state government policies, scrap them, and start with a clean sheet of paper to design a system that produces full employment (with a larger total population actually working than we have today) and work experiences that help people grow into jobs that pay living wages.  Government micromanagement of the job market has not produced full employment or a high population of people earning living wages today.

This has to change!