Pittsburgh’s Paid Sick Leave Expansion: Another Blow to Voluntary Labor Contracts and Pittsburgh's Sagging Business Climate

On June 4th, the Pittsburgh City Council voted to expand the city’s paid sick leave mandate to cover businesses with as few as one employee. This move might sound modest, even well-meaning. In practice, it’s another case of the state inserting itself into voluntary arrangements, making it illegal for employers and employees to negotiate the terms of labor on their own terms.

By mandating paid sick leave, the city has removed the ability of workers to offer their labor under different terms—say, for slightly higher wages in exchange for less time off. This flexibility is now off the table. The law flattens the labor market, outlawing diversity of contract in the name of uniformity.

In a truly free labor market, some workers may prefer to work for a slightly higher wage and forego paid time off, while others may prioritize more benefits with lower pay. Likewise, some small businesses may choose to offer generous time-off policies as a competitive edge, while others—especially those in low-margin industries—may operate with different structures to stay viable. These decentralized decisions allow for mutual coordination and experimentation—not in isolation, but in constant response to what consumers ultimately demand -- including what they can afford.

That part is too often forgotten. The employer is not an autonomous sovereign sitting across from the employee in a vacuum of power. The employer is a middleman—a coordinator of capital, labor, and know-how—serving at the pleasure of the consumer. If they fail to assemble these inputs into products and services that satisfy the customer, they cease to exist. Labor contracts, compensation structures, and benefit offerings are shaped by that underlying reality. They evolve not arbitrarily, but in constant feedback with what the market—the people—actually want, largely guided by affordability.

Mandates eliminate that coordination.

What’s lost here isn’t just employer “freedom” in some abstract sense. It’s the real-world ability of individuals to discover and agree upon the most mutually beneficial terms of employment. When a city government dictates the terms of all labor contracts, it overrides the price system’s role in transmitting information, and instead replaces it with a economically tone-deaf one-size-fits-all decree.

This also creates perverse consequences for smaller businesses. Large firms with HR departments and deeper pockets can absorb these compliance costs. The corner bakery with two employees may not. The law, in effect, raises the fixed cost of hiring, which means some jobs will never be created and some employers will find it safer to automate or scale back.

It also greatly satisfies union labor, whose added costs (also forced onto consumers by political mandate) seem less lavish after non-union labor costs are forced upward. Although we should also not forget that union wages are often tied to base-level wages. Hence, when minimum wages and benefits rise, so too follow union wages.

Supporters often frame such laws as helping low-wage workers. But the people most harmed are often those with the fewest options -- young workers, part-timers, the uncredentialed -- who would otherwise benefit from informal or flexible work arrangements that these laws now prohibit. When minimum benefit standards are imposed by law, subminimum jobs simply vanish. They're not upgraded. They're outlawed.

None of this is new. This is the well-worn pattern of interventionism: regulation begets distortion, which begets more regulation. As any informed libertarian will point out, the problem with interventions is not just that they violate liberty, but that they prevent the essential discovery process through which economic actors coordinate with one another. Price controls, wage mandates, and benefit requirements all have the same flaw: they assume that bureaucrats can improve upon the voluntary arrangements of free people when they instead muddy the waters, diminishing economic efficiency and consumer purchasing power.

In Pittsburgh, the law now assumes that all workers value sick leave in the same way and that no employer should be allowed to offer labor contracts outside this mold. It may win political points, but it comes at the cost of employment opportunities, innovation in compensation, and the simple liberty to work on one’s own terms.

It also worsens an already fragile business climate. Pittsburgh has been losing business activity for years—not due to lack of talent or infrastructure, but because of a political environment that’s increasingly seen as tone-deaf, hostile, and unreceptive to enterprise. Mandates like this send a clear message: innovation and independence are subordinate to socialistic busybodies who demand compliance with their politically-drive, self-serving ignorance. While this ordinance may not be the sole reason a business leaves, it will contribute as another among many reasons not to stay.

If we truly value the dignity of labor and value economic growth, we ought to let workers and employers craft terms that suit their circumstances. And if we value the consumer -- the real sovereign of the economy -- we must allow the freedom and flexibility that make innovation and coordination possible.

— Libertarian Party of Allegheny County

    “Free the Market. Free the People.”

Allegheny County has over 2000 registered libertarian voters.  Contact us to learn more about how you can help us make a difference.