Free Markets, Regulation, And The Role of Staffing in Today’s Economy

In a truly free society, people with ideas have the freedom to create and run businesses with very little, if any, regulation or red tape. Those businesses would then succeed or fail based on the merits of the idea and the industriousness with which the business was run. In place of those that fail, other businesses would emerge from the ashes, learning from the mistakes made and building upon the successes, aptly illustrating, in its simplest form, economist Joseph Schumpeter’s principle of capitalism’s ‘creative destruction.’

Free Markets, Regulation, And The Role of Staffing in Todays Economy

From the very first English colony on these shores, Jamestown – whose residents continually starved until governor Thomas Dale introduced the concept of private property – to the present day, capitalism has been the driving force behind American innovation, industriousness, and overall success. Without the ability to enjoy the fruits of their own labors, history has continually shown that people will ‘labor’ as little as possible.

Enter government, a force which, well-intended or not, always seeks to grow itself, always seeks to exert its influence upon the free economic (and other) enterprises of man. From subsidizing or propping up businesses that would otherwise fail to over-regulating and destroying those that would otherwise succeed, government’s influence, like it or not, is a force to be reckoned with. By limiting economic freedom, government constrains capitalism’s potential to maximize the standard of living for all who participate.

Most politicians won’t tell you that, of course. They would say that certain laws are necessary to keep people from getting hurt, to save us from ourselves.

We need anti-discrimination laws to keep businesses from turning away a skilled welder who happens to be Black in favor of a White ex-con whose idea of welding experience is his arson conviction.

We need wage and hour laws to keep businesses from paying their workers in Skittles and toilet paper rolls.

We need family and medical leave so businesses won’t fire people for having kids or taking care of Granny.

However well-intended these laws are, there are always unintended consequences.

We need a minimum wage to keep businesses from luring in the hordes of people begging to work for a nickel an hour.

We need OSHA and workers compensation to keep work sites from becoming Dickens-era death traps.

We need unemployment insurance to keep unemployed folks from becoming panhandlers or, worse, squeegee operators.

We need government-run healthcare to keep little children from dying from God-knows what dread disease.

And on and on it goes…

Now granted, those are all worthy goals, many of them areas that companies have abused in the past. While the libertarian side of me would argue that, absent government coercion (remember, the government itself was guilty of coercing discrimination for many years!) all these things would have eventually been (and could still be) properly rectified by a truly free market of both ideas and commodities, I realize that the very existence of a powerful central government means that we no longer live in a truly free society. Thus, we are forced to deal with what IS instead of what (at least in my opinion) should be.

So, what’s a business to do? After all, their goal IS to make money, right? Self-interest, free-enterprise and all that…

However well-intended these laws are, there are always unintended consequences. There’s endless litigation and government bureaucracy, mountains of paperwork for all involved, and gigantic HR departments dedicated to ensuring companies follow the letter of the law, no more, no less. (After all, who is to say what will be asked for next, right?)

It’s one thing to expect companies to take risk on a product or service, but nowadays the risks they take are amplified tenfold. For in creating a supposedly ‘risk-free’ environment for employees, an environment where the slightest corporate misstep could result in massive paydays for the increasingly litigious, increasingly aggrieved worker, government has massively increased the cost of doing business, and thus the cost of creating jobs, giving raises and benefits, and even expanding in America and hiring Americans.

If you’ve read this far and wonder what this has to do with the staffing world, perhaps you’re starting to get it. You see, companies use staffing for a variety of things, but one of the most important reasons, and one which I never fail to mention to potential clients, is risk management. What if we could unload some of that risk you are taking onto ourselves? What if we could deal with the workers comp parasite, the guy who’s looking for the next place to get fired from so he can draw a few more weeks of unemployment, the poor performer who happens to be part of a protected class? What if we took on the risk that it takes to screen and hire these people, at least for the first few months, instead of you? Could you then use some of that money to expand, to hire more people, to keep your product prices reasonable?

Please don’t get me wrong. I’m all for companies that, despite all odds and economic and governmental incentives to do otherwise, choose to go above and beyond the call of duty to take extra care of their employees. There are many such companies out there, many of which employ staffing for at least a portion of their labor needs. But if the choice is between staffing jobs, many of which, without staffing, wouldn’t otherwise exist, and no jobs at all, doesn’t the choice become easy?

We in the staffing industry (most of us anyway!) do everything we can to follow the letter of every law and take care of our employees to the extent our margins allow. That may not mean a lot of frills, at least for the first part of a person’s employment (although we do provide a few, such as vacation and holiday pay for our long-termers), but it does mean gainful, productive employment here in the United States despite governmental policies that sometimes seem to incentivize everything but.

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