- How Government Creates Unemployment

I'm not generally a big fan of Lew Rockwell, but I think in this piece about unemployment he distills the salient points very nicely. He makes the claim that our unemployment rate could be at zero tomorrow if we didn't have so many government mandates standing in the way. Like:

• The high minimum wage that knocks out the first several rungs from the bottom of the ladder;
• The high payroll tax that robs employees and employers of resources;
• The laws that threaten firms with lawsuits should the employee be fired;
• The laws that established myriad conditions for hiring beyond the market-based condition that matters: can he or she get the job done?;
• The unemployment subsidy in the form of phony insurance that pays people not to work;
• The high cost of business start-ups in the form of taxes and mandates;
• The mandated benefits that employers are forced to cough up for every new employee under certain conditions;
• The withholding tax that prevents employers and employees from making their own deals;
• The age restrictions that treat everyone under the age of 16 as useless;
• The social security and income taxes that together devour nearly half of contract income;
• The labor union laws that permit thugs to loot a firm and keep out workers who would love a chance to offer their wares for less.

This is solid common sense, but his best quote is this:





People are saying that it is better that people be unemployed rather than being exploited at low wages. If so, it all comes down to your definition of exploitation. If $10 per hour is exploitation, we should be creating even more unemployment by raising the minimum wage. We could dis-employ all but a few by raising the minimum wage to $1,000 per hour.


The rest is here.