{"id":184,"date":"2026-05-04T10:34:51","date_gmt":"2026-05-04T14:34:51","guid":{"rendered":"https:\/\/people.bsu.edu\/econbriefs\/?p=184"},"modified":"2026-05-04T10:34:51","modified_gmt":"2026-05-04T14:34:51","slug":"when-laws-restrict-win-win-exchange-by-dr-cecil-bohanon-and-dr-john-horowitz","status":"publish","type":"post","link":"https:\/\/people.bsu.edu\/econbriefs\/2026\/05\/04\/when-laws-restrict-win-win-exchange-by-dr-cecil-bohanon-and-dr-john-horowitz\/","title":{"rendered":"When Laws Restrict Win-Win Exchange\u2013 by Dr. Cecil Bohanon and Dr. John Horowitz"},"content":{"rendered":"<p><span data-contrast=\"auto\">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\u00a0in cash. Mr.\u00a0X is better off by $500, and Mrs. Y is better off by $500.\u00a0The\u00a0story illustrates what we value about free enterprise: voluntary exchange, mutual benefit, and value creation. Yet under current law,\u00a0it\u00a0can\u00a0be a crime.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:720,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">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.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:720,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">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.\u00a0<\/span><a href=\"https:\/\/www.axios.com\/2024\/11\/19\/undocumented-workers-immigration-deportation-trump\"><span data-contrast=\"none\">Approximately one-third of workers in certain construction specialties, such as drywall hanging, are undocumented immigrants<\/span><\/a><span data-contrast=\"auto\">.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:720,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">Some may argue that Mr. X\u2019s\u00a0and\u00a0Mrs.\u00a0Y\u2019s freedom to enter\u00a0into this exchange is part of their\u00a0inalienable right to\u00a0\u201clife, liberty,\u00a0and\u00a0the pursuit of\u00a0happiness.\u201d\u00a0However, most\u00a0people agree that respect for the law is essential for maintaining social order, fostering institutional respect, and upholding\u00a0moral conscience.\u00a0No\u00a0reasonable person advocates\u00a0for lawlessness. But laws that criminalize compassion and punish productivity deserve scrutiny.\u00a0This story is about more than immigration, labor, and tax policy; it is about regulatory efficiency and economic freedom.\u00a0Laws criminalizing\u00a0mutually beneficial transactions\u00a0create perverse incentives, such as\u00a0increased economic activity outside official regulatory and taxation systems, reduced worker protections, decreased tax revenue, and ultimately, reduced\u00a0economic growth.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559731&quot;:720,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"auto\">The second verse of the patriotic hymn \u201cAmerica the Beautiful\u201d\u00a0perhaps gives us some guidance\u00a0or at least inspiration:\u00a0\u201cAmerica! America! God mend thine every flaw,\u00a0Confirm thy soul in self-control, Thy liberty in law!\u201d<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559740&quot;:240}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>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 [&hellip;]<\/p>\n","protected":false},"author":112,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[462],"tags":[1654,1487,1658,1544,1656,594,127,1657,1655,749],"class_list":["post-184","post","type-post","status-publish","format-standard","hentry","category-microeconomics","tag-economic-freedom","tag-immigration-policy","tag-informal-economy","tag-labor-markets","tag-minimum-wage","tag-public-policy","tag-regulation","tag-taxation","tag-undocumented-workers","tag-voluntary-exchange"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>When Laws Restrict Win-Win Exchange\u2013 by Dr. Cecil Bohanon and Dr. John Horowitz - Econ Briefs<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/people.bsu.edu\/econbriefs\/2026\/05\/04\/when-laws-restrict-win-win-exchange-by-dr-cecil-bohanon-and-dr-john-horowitz\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"When Laws Restrict Win-Win Exchange\u2013 by Dr. Cecil Bohanon and Dr. John Horowitz - Econ Briefs\" \/>\n<meta property=\"og:description\" content=\"Consider the following scenario: Mr. X, a laborer and father of three, seeks 40 hours of yard work at a minimum of $500. 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