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July 13, 1993
Published in The Mesa Tribune.
Webster's Dictionary defines socialism as "a system of condition of society in which the means of production are owned and controlled by the state." Although radio talk show hosts are about the only people who apply the socialist label to our economy, government control of American business has reached a level which is positively frightening.
It is fair to say that government at all levels acts as if it does own the huge majority of businesses. Such is the audacity with which it tells them how to operate.
This control is the chief reason for the explosive growth in the number of temporary and part-time workers. In his unrelenting quest to make everything nice for everybody, Big Brother has made it increasingly precarious to hire full-time and permanent workers. Labor unions, minimum wage laws, FICA and other payroll taxes, OSHA regulations, affirmative action and racial quotas, the new family-leave law, the Americans with Disabilities Act and federal mandates for employer-provided health benefits have all added enormously to payroll costs. One false move can land an employer in court.
Policies create incentives. This regulatory assault on labor markets has prompted companies of every type to bypass regulations covering regular employees by hiring temporary workers. Clintonomics, which has just barely begun to take effect, will only make matters worse.
"Empowerment" is perhaps the most misused word in politics today. Too often, politicians talk about empowerment in the same way that pornographers talk about love. Many advertise Clintonomics as abetting worker empowerment. However, as Rick Henderson recently wrote in Reason magazine, many policies backed by Clinton and Labor Secretary Robert Reich do nothing but "empower institutions over individuals."
The following plans have the blessing of Messrs. Clinton and Reich:
Lovers of big government routinely chastise America for "lagging behind other industrialized nations" in terms of social services. Llewellyn Rockwell, president of the Ludwig von Mises Institute at Auburn University, points out that England and Germany, whose economies are even more socialized than ours, have larger, and more heavily regulated temp markets than we do. "In Greece, Italy, Spain and Sweden," Rockwell writes, "the temp market became so huge that government abolished it, or attempted to, for all of these countries have huge underground economies."
There is a well-known anecdote about George McGovern, the 1972 Democratic presidential nominee. After leaving politics, McGovern bought a hotel which later went bankrupt. In the wake of this debacle, he said he wished he had had such an experience before entering politics -- it would have made him much more aware of the concerns of everyday people.
Having to meet a payroll can be a sobering experience. We can mandate that employers provide every benefit imaginable, but these mandates carry a price: fewer jobs. Contrary to leftist mythology, employers do not have infinitely deep pockets. And it verges on politically incorrect for the media to report on the toll regulation takes on small- and medium-sized businesses.
Again, Clintonomics has barely begun to take effect. It is safe to predict, however, that those who clamor for even stricter regulation of the temp market will have the ear of the administration. You can expect increased pressure to unionize temp workers and to require that they receive the same pay and benefits as permanent workers. You can also expect an increasing portion of the American economy to go underground, just as it has in many of the pink paradises of Western Europe.
When you get right down to it, "job security" is, like "congressional ethics" or "Balkan unity," an oxymoron. Lest anyone assume I am writing from an ivory tower, I lost my job at the end of May. If we were in a truly free market, which America does not even resemble, regulation and taxation would be minimal. It would thus be far easier for me to save for my own retirement and buy my own health insurance. It would be far easier for me to find a new job. It would also be far easier for me to save money to prepare for such eventualities as the loss of a job.
The ultimate expression of the state as guarantor of economic security could be found in the Soviet Union. The hellish character of Soviet life ought to demonstrate for all time that nothing in life is free.
Freely Speaking: Essays by Doug Newman
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