Should We Protect Labor Rights?

Let's kick off the second article with gusto covering a provocative subject matter. This is the first of a two part series concerning labor rights or the lack of those rights. Historically, economics has recognized the four parts of production in a capitalist society. These four parts consist of raw materials, labor, capital, and entrepreneurship.

The basic ingredients in the production of products made for consumption locally and internationally are raw materials such as wood, metal, gases, and chemicals. Labor converts the raw materials into usable products. Other businesses, governments, and private households use these products across the world. Various financial institutions supply the venture capital used to finance the procurement of the cost of production such as the raw material acquisition and labor force. The entrepreneur is the risk taker. The entrepreneur assumes the risk associated with selling the products at a profit. The profit must cover all the raw material cost, labor cost, and cost of borrowing the capital used to produce the products sold.

The entrepreneur can use the profits from the sale of the products to expand the business. The business expansion results in using more raw materials, the hiring of more labor, and the use of more venture capital. The expansion of business creates more wealth for the individuals who supply the raw materials, the labor force prospers, the financial institutions grow, and the successful entrepreneur gains wealth in return for the risk taken. Everyone can enjoy the benefits from the successful utilization of the capitalistic approach.

Government also benefits from this scenario because of the increase revenue received from the increased taxes paid into the system. The taxes paid to government come from the raw material distributors, the labor force, the financial institutions, and the entrepreneurs. The increased revenue government receives can be used to build infrastructure such as roads, bridges, tunnels, water works, and even air ports. Government can erect schools, parks, and hospitals with the increased revenue acquired from the effective use of the capitalistic society. Yes indeed, a successful capitalist society can benefit everyone.

A massive influx of population resulted in an overflow of labor into this nation during the late nineteenth century and early twentieth century. This overflow of labor resulted in an unbalance between the bargaining rights of workers in dealing with the employers or entrepreneurs. The government passed minimum wage laws, and child labor laws to protect workers. Powerful labor unions gave labor extra rights. The labor unions gained too much power and they also became corrupt during the 1950's, 1960's and 1970's. The balance between labor and the entrepreneur was out of whack once again, but this time in the reverse direction. This unbalance between labor and entrepreneurs resulted in lack of profit to the entrepreneurs, higher unemployment, for the workers, greater risk to the financial institutions, reduced raw material use, and fewer tax revenues to government. The unbalance between labor and the entrepreneurs resulted in everyone losing. The 1980's and 1990's brought more of a balance between the opposed forces of labor and entrepreneurs.

The last decade has resulted in an unbalance between labor and entrepreneurs. Entrepreneurs are using a massive influx of inexpensive labor to take advantage of the work force once again. This influx has occurred from both legal and illegal immigration. Visa's and work permits allow legal migration into the economy, while weak border enforcement has allowed a rapid increase of illegal migration into the economy. Entrepreneurs pull the old see no evil, hear no evil, and speak no evil routine. Entrepreneurs claim they don't know they are hiring illegal immigrants even while a free electronic E-Verify program exist that is over 98% effective.

Perhaps, it is time for government to once again intervene between labor and entrepreneurs.

What do you think America? It is something for you to ponder over.

Source: http://ezinearticles.com/6266401

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