Saturday, October 15, 2016

How does the Free Market ensure Companies won't abuse their Workers?

I received my highest rated answer on Quora yesterday. I wasn't that many upvotes, but taking into consideration the popularity of the question I feel like I fared pretty well. Here's the question:
Libertarians, in a free market how do we ensure that companies don't abuse their workers?
My answer:
How does government ensure that companies don’t abuse their workers? Even where there are laws, it still happens. The non-free market does not ensure that companies don’t abuse their workers, so why is that a standard that libertarians must live up to? 
The question is never how markets are going to make things perfect, it’s how the net impact of markets compare to the net impact of government. Remember that. 
Why don’t so many companies abuse their workers today? You might think it’s because we have laws, but that’s not true.  
I worked in both Arizona and Indiana where my employers gave me breaks. Why? There are no laws at any level of government that say a working adult needs to be given any break at all. A little less than half of states are like this, absolutely no legal obligation for employers to give working adults break (look it up), but it almost always happens anyway. 
Low pay is another form of abuse. Have you considered that less than 4% of the population makes minimum wage. The other 96% of all workers are paid more with absolutely zero legal obligation to do so. There are no laws telling employers to pay their workers $50,000 a year, and yet it’s the median income. That’s just the normal supply and demand market wage, no government necessary. 
Why do we have decent working conditions? General economic growth lifted the wages of almost everybody. After people started earning enough, they started substituting some higher wages for better working conditions. 200 years of economic growth is why I got breaks in Arizona and Indiana. General economic growth is the hero that saved us all from 18th century level working conditions, not the government. The government simply codified it after it already started happening. 
No system is perfect, but those mechanisms that keep employers from abusing workers today would still remain in play in a libertarian society. And if libertarians are right that their society will yield more growth, then even fewer employees will be willing to put up with an employer who abuses them, because there are lots of other places they can go where they don’t have to put up with that nonsense.