Workers Don’t Need Government’s Help to Earn Higher Wages

By Veronique de Rugy at

June 2, 2016

One of the assets of the American economic model is a relatively flexible labor market, especially when compared with labor markets in many European countries. It explains some of the consistently lower U.S. unemployment rates and higher economic growth. Unfortunately, this flexibility is increasingly threatened by government policies that would increase the cost of employing workers. These policies include the Department of Labor’s recent overtime rules, the call for employer-paid family leave, and a minimum wage increase.

Some of these calls are driven by pure politics and self-interest. The typical union business model, for instance, is built on the notions that workers are treated unfairly by employers, that abuse is systemic to the labor market and that things get worse over time. The argument is that hamstringing employers into paying workers more for the same amount of work would be beneficial to workers, in spite of evidence to the contrary.



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