What is one if the restrictions on producers that keeps the labor market from being a completely free market?

Answer 1

The fact that workers don't always have the education required to perform certain jobs is one restriction on producers that keeps the labor market from being a completely free market. Another is that there will always be some level of government restrictions/laws regarding production.

Answer 2

Generally speaking, it is to the advantage of producers, whether private or public ones, to keep a tight rein on its workers. With that said, time and the results of free labor markets are in fact to the advantage of everyone in a free market society. Increased production has helped workers and the owners of production, to advance in terms of standards of living and the opportunities of the producers to gain in wealth.

In free market economies, however, the above advantages are curtailed by two major factors. Worker unions, which by bargaining contracts and with the cooperation of governments set up barriers that restrict a free labor market. Where the government has passed laws, such as the "right to work act", workers must join the union, which has the contract of wages and benefits agreed upon by both parties, namely the union and the producer. In this manner, the worker is not free and must accept becoming a member of a union and accept the agreements that have been negotiated with the producer.

Some labor contracts regarding promotions to higher levels of pay, may be based on seniority rather then on merit. Union dues must be paid by the workers to support the top people controlling the union who are not employed by the producer but are employed by the union. The higher the dues, the more funds available to the union leaders.

In some markets, where the government has no laws regarding discrimination in hiring, the producer may decide to not hire minority workers. Here again the labor market is restricted. This type of arrangement can normally only exist with a three way "unwritten agreement" between workers, producers and the government.

In some situations the producer faces ( fair or not fair ) minimum wage laws that can limit the numbers of employees the producer can economically hire. Thus, workers who wish to be hired cannot be hired because the government has placed a "cost" in the set wages made by the government.