“I’m from the federal government and I’m here to help.”
It’s not certain whether that is the joke or a punchline, but either way this adage underscores a generally universal opinion that government solutions create as many problems as they solve.
Last year as the COVID pandemic shut down economic activity across the world, the federal government stepped in with unemployment assistance, business loans and grants, help with rent and even mortgage forbearance. In the face of mass uncertainty, these things offered much needed stability for families and businesses.
These emergency actions were a lifeline that only the federal government could provide. Coupled with businesses allowing and encouraging employees to continue by working remotely, these actions helped us all survive the onslaught and the uncertainty of the pandemic. Most people were grateful for the quick government action even if they themselves did not need the help. And then-President Trump fast-tracked development of the vaccine. Only a government could make that happen.
But fast forward to today and we have a different set of problems to solve. Some employees that became accustomed to working remotely do not want to return to the office. Some service industry employees, whose work evaporated and were kept afloat with sometimes generous unemployment, do not want to return to the old normal.
It is not that they are lazy. The equation changed and many people are charting a new course post pandemic. It’s a challenge for nearly everyone.
This sea change in wages, how people want to work and how that will affect business is not likely something government can productively address by itself with rule-making or government programs. It will require the addition of entrepreneurial “how do we survive and thrive” problem solving to reconcile the demands of work with those of employees.
Take restaurants during the summer tourism season as an example. The federal minimum wage for someone working for tips is $2.13 an hour. That startling low wage is the old normal and reports abound about restaurants in the region that used to be open and fully staffed but are currently closed or have reduced hours because they cannot find employees. This is a problem not just for restaurants but for all of us, because without options to serve hungry tourists, our number two industry will starve too.
But there are some bright spots in the free market. Proponents of market solutions to poverty have advocated a federal $15 minimum wage for years. In the wake of the pandemic, some restaurants and businesses are responding to the problem of finding and keeping employees by offering higher wages, sometimes north of $15 per hour, plus benefits. Today those businesses appear to have the employees needed to compete for market share and success.
This may or may not be the right answer across the board, but the free market has a history of figuring things out, making necessary changes and doing the math to keep their employees and customers happy. And they do it day-in and day-out.
Many of the post-pandemic economic problems we face won’t be solved by governmental regulations. They will be solved by good old-fashioned competition; competition for the best employees, competition for the best job and competition for your business. Free market competition is the secret sauce that has solved problems and driven success in the United States for more than 200 years.
America was built on really hard work. Generations have known the struggle of making a living where they took pride in their work and the company they worked for while they earned the satisfaction of a living wage. There is an element of self interest in every part of this equation. The transaction of creating a product for wages, health care, child care and retirement or other benefits is the business of business. It’s how we trade opportunities. It’s how we provide for more comfortable, safe and healthy lives for our families. That is the free market at work and these are the factors that have traditionally solved our economic problems.
After a year of necessary government support, for which we are grateful, what is needed now is for the free market to take over, do the math, make the deals and smooth the way forward so that we as a state and a nation not only survive but thrive.