November 4, 2014

Government intervention in work place laws

Workplace discrimination is an issue that has plagued the United States for many years. The government realizing its mistakes decides the best course of action is to enact laws protecting those who face discrimination. Numerous laws have been enacted such as equal pay for equal work and so forth. I argue however, that while these laws sound good they fail to fix the problems they were created for.

Discrimination can occur in a variety of different ways and in very different ways. For this essay I will be talking about workplace discrimination via unemployment and differing wages. One of the largest problems talked about these days is the gender pay gap where women make less then men. One such law was enacted in 1963 was the Equal Pay Act. I hope that the majority of people would agree that people regardless of the physical characteristics should make the same for equal work, and at the time it is easy to understand how this law was created. However, I argue that this law and those that followed failed to fix the issue of equal pay and may have made things worse.

In a free market system the market itself will punish any employer with discriminatory practices. An example could be an ice cream shop where a particular owner is looking to hire an additional worker to serve ice cream. Two people apply for the job one with blue eyes who will add 10 dollars a day in profits and one with brown eyes who will add 20 dollars a day in profit. The simple answer would be to hire the one who will add the most profit. The owner of this shop however, has a prejudice against people with brown eyes and because of that prejudice hires the person with blue eyes and loses out on the additional 10 dollars in profit a day.This same ice cream shop example can be looked at in another way. For this example lets say that both employees productivity is the same but the owner still has his prejudice against brown eyes and for that reason he pays the person with brown eyes less even though there productivity is the same. to Fix the situation the government imposes a new law saying that all employees must be paid the same. to the owner, because of his prejudice, will fire the employee with brown eyes because he believes that persons productivity is below what he is required to pay them because of the law.

In this situation had the law not been enacted the individual would leave the ice cream shop and be hired by someone without that prejudice at a rate their productivity deserves. Its understandable for people to think that a law is the solution to an unequal pay issue and while the above analysis is short I hope it shows that laws always have unintended consequences. "The most shocking abuses of minorities and women in history occurred under the regimes of tyrannical governments" not from any amount of individuals collective prejudices. The problem I see is that as more laws continue to be added we move further and further from a free market. 


Murphy, Robert P. "The Economics of Discrimination." 2 August 2010. Library of Economics and Liberty.

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