Employers Already Provide Birth Control… and Everything Else

Last week’s commendable Hobby Lobby decision by the Supreme Court spurred an array of predictable responses across the political spectrum: Republicans celebrated a limitation on the power of ObamaCare while many on the left revealed either a gross misunderstanding of or a willingness to misrepresent the role of the Supreme Court by treating its decision as a policy dictate rather than a clear-cut recognition of the law’s conflict with the Religious Freedom Restoration Act of 1992. Social media saw outpourings of claims that the Supreme Court’s decision constituted an affront to the rights of women by “denying” them access to birth control.

Ari Armstrong argues effectively at The Objective Standard how the left’s argument is dishonest and misrepresents the nature of rights, and Brian Underwood wrote over a year ago in these pages how the question of religious exemptions avoids the deeper issues behind ObamaCare that affect people of all faiths (or none), so I will not reiterate well articulated cases here. There is another point to add to these, however, which is drawn from the first day’s lesson in any undergraduate economics course.

Employers already provide birth control to those who want it… along with everything else they need. They do this by offering a salary or commission to their employees. With the money that employers pay, employees are free to purchase whatever goods and services they want or require—medical services, housing, clothing, food, luxuries, etc.—according to their own personal values. In return, employees provide employers with labor. If the employee deems the wages to be worth his time and labor, he takes the job and pays for his needs with the wages earned. If not, he markets himself elsewhere until his requirements can be met. Though it may seem crude to frame the issue at such a basic level, sometimes the most heated debates and seemingly complex political issues become so by ignoring the most straightforward economic principles.

Partly the result of today’s collectivist politics in which Americans are perpetually being told by politicians what goods and services they deserve by right and by whom they are owed restitution, partly the result of a convoluted market for medicine engineered by our income tax structure and the third-party-payer system, many Americans now look to their employer as the source of their healthcare and they demand more of it. They vehemently oppose even a limited decision like that on the Hobby Lobby case, insisting that it is not their employers’ business whether they use birth control—except to the extent that the employer should pay for it.

What these outspoken critics fail to realize is that the benefits that they are paid, government mandated or otherwise, are part of their pay structure. They are taken into account with every hiring decision and they weigh on whether staff can be afforded or may be laid off when the company cannot afford to keep them. Thus, in the end, the more an employer is mandated by government to provide them in medical services, the less they are able to offer in salary. The result is that employees wind up with an increasingly inflexible pay structure in which they will be offered a given amount of insurance coverage for medical expenses regardless of whether they use it or not.

The effect of this change is not small or incidental. It means that the more benefits are mandated, the fewer people will be hired in an already dismal job market. It means that employers are less able to negotiate on salaries and that employees lose the element of choice; they become bound to receiving whatever amount of medical coverage or other benefits are offered instead of money income with which they could pay off loans, pay other expenses, invest, start their own business, travel, earn more education, or—yes—pay for medical care when they need it instead of pre-paying for it and gambling on how much they will use (an act that only increases market prices through overconsumption).

The question of employer mandates for providing birth control, medical insurance more generally, or any other benefit is not a question of whether or not employees can acquire such services. It is a question of whether they will be left the independence to make judgments for themselves in deciding how much or how little of such services will be in their best interest. In the end, rational young people who are truly interested in their future and their access to affordable markets in all of the goods and services they require must first and foremost be advocates of independence and the freedom to choose.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: