The Department of Labor’s budget is dominated by the costly unemployment insurance system. It also runs numerous employment and job training programs, which are generally ineffective and duplicative of services available in the private sector. And the department oversees an array of labor union laws and workplace regulations that restrict freedom and are costly to workers and businesses.
The department will spend $39 billion in fiscal 2016, or $310 for every U.S. household. After adjusting for inflation, spending has declined 3 percent since 2000. The department employs 17,000 workers.
- Failures of Unemployment Insurance. The UI system is costly to taxpayers and creates numerous economic distortions. Federal involvement should be ended and the states left free to design their own systems.
- Employment and Training Programs. Federal programs for unemployed workers have never worked very well, are relatively little used, and are little needed because private markets provide many alternatives.
- Reforming Labor Union Laws. Federal union laws that mandate exclusive representation, union security, and prevailing wages are costly to the economy and restrict individual freedom. They should be repealed.
- Trade Adjustment Assistance. This program provides benefits for certain workers put out of their jobs by foreign trade, but it has no sound basis in economics.
- Minimum Wage Laws. These laws are supposed to help workers, but the evidence suggests that they damage the economy and are particularly harmful to less-skilled workers.
Ludwig von Mises, Human Action, 1949.