ABSTRACT
This chapter covers the nature of unions, nature of minimum wage laws, nature of unemployment and poverty, the full employment act, employment strategies: absorbing labor surplus with capital formation and flexible wages, labor markets in Sharia and dismal unemployment rates. Sound money and market-determined interest rates cannot exist when the government deploys unorthodox money policy to influence the labor market. Minimum wage laws, by definition, force wages above the marginal productivity of workers and above the market-clearing wages. The state has to remove every single obstacle against full employment, be it unions, labor laws, unemployment compensation, or theft and larceny. Unemployment is a serious economic disequilibrium. It means a large loss in output and deterioration in poverty. In 1978, the Full Employment and Balanced Growth Act, known as the Humphrey-Hawkins Act, amended the 1946 Employment Act and became law. The Act set up four goals for the federal government: full employment, economic growth, balanced budget, and elimination of inflation.
