Consider the following scenario: Mr. X, a laborer and father of three, seeks 40 hours of yard work at a minimum of $500. Mrs. Y, a retired widow, needs her overgrown garden cleared and is willing to pay up to $1,500. They agree on $1,000. Mr. X completes the work, and Mrs. Y pays him $ 1,000 in cash. Mr. X is better off by $500, and Mrs. Y is better off by $500. The story illustrates what we value about free enterprise: voluntary exchange, mutual benefit, and value creation. Yet under current law, it can be a crime.
If X is not in the country legally, he can be arrested and deported, effectively blocking him from making the exchange. If the jurisdiction in which Mr. X and Mrs. Y live has a minimum wage law that mandates a rate of more than $25 an hour for labor services, then Y may be penalized. If X and Y do not report the transaction to state and federal tax authorities and do not render appropriate tax payments, they both may be penalized.
What started as a straightforward transaction becomes far murkier. Should a government prevent or punish two people for helping each other? Should a man be denied the right to work because of where he was born? The law says hiring undocumented workers is illegal. But even President Trump expressed support for undocumented workers in agriculture, hospitality, and construction, where undocumented workers are especially important. Approximately one-third of workers in certain construction specialties, such as drywall hanging, are undocumented immigrants.
Some may argue that Mr. X’s and Mrs. Y’s freedom to enter into this exchange is part of their inalienable right to “life, liberty, and the pursuit of happiness.” However, most people agree that respect for the law is essential for maintaining social order, fostering institutional respect, and upholding moral conscience. No reasonable person advocates for lawlessness. But laws that criminalize compassion and punish productivity deserve scrutiny. This story is about more than immigration, labor, and tax policy; it is about regulatory efficiency and economic freedom. Laws criminalizing mutually beneficial transactions create perverse incentives, such as increased economic activity outside official regulatory and taxation systems, reduced worker protections, decreased tax revenue, and ultimately, reduced economic growth.
The second verse of the patriotic hymn “America the Beautiful” perhaps gives us some guidance or at least inspiration: “America! America! God mend thine every flaw, Confirm thy soul in self-control, Thy liberty in law!”