Sunday, March 16, 2014

A little light libertarian-ism for a Sunday evening

One of the core tenets of libertarianism is the concept of free and voluntary exchanges.  The government has no business getting involved in dictating the terms of an agreement between two people.  If I have something to sell at price $x and you are willing to pay price $x, we are in agreement and, absent any sort of misrepresentation on my part or failure to abide by the terms of the agreement on your part, we have struck a deal.  No government interference needed.

This typically extends to the labor market as well for most libertarians, myself included.  If I am willing to cut someone's lawn for $5 (and they are willing to pay me the $5), it shouldn't require the government to step in and mandate that this agreement is unacceptable.  This is the basic argument against minimum wage, for example, that an employer needs to receive $x worth of productivity from a worker, or it isn't worthwhile hiring them for $x.  When the government mandates a particular wage, they can't take into consideration the cost to the employer of hiring that employee.

Today's observations, however, don't deal with the minimum wage, but with salaried employees.  A free and voluntary agreement is reached between a worker and an employer.  The employer agrees to pay a particular worker $x per month or year (salary) in exchange for that worker's services.  The worker chooses to accept the bargain, agreeing to provide his labor at that annual rate until such time as either of them decides to terminate the agreement.

The government, however, has decided to step in, arguing, as they often do, that the worker is not able to make these decisions on their own.  Apparently there are employers who try to get more than forty hours per week out of these salaried employees without paying them any extra.  Since this is a free and voluntary agreement, with neither party bound to stay longer than they wish, it would seem reasonable that if the employee is unhappy with the hours they are working, they can either renegotiate the agreement or, failing any resolution, leave the company.  It is, after all, a free country.

Apparently not.  The Obama Administration is proposing rules that would prohibit this kind of agreement between consenting adults.

The Coyote has more here.

WSJ article here (requires subscription)

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