This article was originally published by Ryan McMaken at the Mises Institute. 

Advocates for vaccine mandates—led by the Biden Administration—are apparently unconcerned that the mandates are likely to drive down total employment and reduce access to government services. In many cases, these are the same services that mandate-pushing politicians have always insisted are utterly “critical” and must be expanded. Instead, the party is taking the position that the drive for vaccination must be placed before all other values in society, including public safety and employment for working-class Americans.

The whole affair helps illustrate, yet again, the problem of allowing the state to have a monopoly on services like fire protection. These are services that can be (and have been) canceled or reduced for political purposes. Mandates also show the danger of governments that maintain lucrative contracts and financial ties with countless ostensibly private firms and local government employers. This has made many private sector firms reliant on federal dollars. All combined, these factors have made it easier for governments to demand compliance with vaccine mandates. Even if the regulatory power of the federal government can be curtailed when it comes to vaccine mandates, the enormous federal financial footprint in the private sector will continue to provide a means for federal regulators to get what they want by threatening to cut off the gravy train.

Workers Refusing to Report Vaccination Status

The financial bribery made possible by government contracts is convenient indeed. It appears that governments will be needing all the tools they can muster, and proponents of coerced vaccines have increasingly looked for both carrots and sticks that can help drive greater mandate compliance among workers. The administration has threatened sanctions for all employers with more than 100 employees if mandates are not imposed and has also threatened to cut off federal money from contractors. Yet, many workers continue to resist even in spite of ongoing threats to throw working people out on the street for refusing the jab.

It’s difficult to guess the full extent to which workers are refusing to prove vaccination status in exchange for being allowed to work. But the effect clearly isn’t negligible. As Reuters reported this week,

In Wichita, Kansas, nearly half of the roughly 10,000 employees at aircraft companies Textron Inc and Spirit AeroSystems remain unvaccinated against COVID-19, risking their jobs in defiance of a federal mandate, according to a union official.

“We’re going to lose a lot of employees over this,” said [the] head of the local Machinists union district.

Meanwhile, at Boeing, more than 7,000 workers have applied for religious exemptions and around 1,000 are seeking medical exemptions. While this represents only 6% of the total Boeing workforce, this makes a non-trivial difference at the margins, especially when we’re talking about skilled labor.

Other anecdotes are numerous, as NPR reports:

Washington state reports that so far, nearly 1,900 state workers, including the head football coach at Washington State University, have quit or been fired for refusing the vaccine. In Michigan, 400 workers at the Henry Ford Health System in Detroit walked away from their jobs. North Carolina-based Novant Health fired about 175 employees. And the list goes on.

Countless local governments have imposed their own mandates for employees as well. The government of New York City is a notable example, and local mandates there mean “Roughly 9,000 municipal workers were put on unpaid leave Monday for failing to meet the deadline and comply with the COVID-19 mandate.”

Moreover, Fire Department employees appear to be calling in sick to avoid the mandate with “Roughly 2,300 members of the New York City Fire Department claimed they were sick and didn’t show up to work on Monday.” The FDNY employs about 11,000 uniformed workers. The New York Post even reports the FDNY “shuttered 26 fire companies citywide on Saturday due to staff shortages caused by the COVID-19 vaccination mandate.”

How Government Power Is Enhanced by Federal Contracting

The administration has attempted to force compliance on these workers by directly using regulatory sanctions on firms the employ unvaccinated workers.  It remains unclear how practical this is.

Fortunately for the administration, however, it is far easier to financially punish firms that depend on revenue through contracts with the federal government. The administration need only cancel its contracts with non-compliant firms.

The firms depending on these federal dollars are plentiful, and these government contractors include many more firms than just weapons contractors like Raytheon or General Dynamics. The list includes a wide swath of the American employer landscape including companies like Honeywell and Microsoft—and, of course, Pfizer. Many of these contracts total hundreds of millions of dollars. Sometimes much more.

The practice of federal contracting thus turns a great many major American employers into de facto adjuncts of the state. And now we’re seeing the predictable results in terms of using these firms to indirectly enact federal policy.

Those Boeing employees protesting mandates are learning the downside of working for what is essentially a government agency. After all, Boeing—which has long been dependent on federal taxpayer dollars—is no more a truly private firm than is the “military contractor” firm Academi (formerly known as Blackwater).

The expansion of federal dollars into every corner of American commerce—be it higher education, computing, or healthcare—provides the federal government with a direct means of expecting compliance with the latest federal whims at any time.

The problem of federal contracting applies to state and local governments as well. Federal grants to state and municipal governments are widespread, meaning greater direct federal control over local governments in practice.

Comply or Die: Cutting Back Emergency Services to Force Vaccine Compliance

A second lesson here is that government monopolization of certain services allows the regime to withhold those services for political purposes.

For example, the fact that governments maintain a monopoly over fire departments and police departments mean government policymakers have a lot of leeway in choosing to cut back services with impunity. So, when a city—such as New York—decides it would rather close down entire fire companies rather than allow workers to defy the vaccine mandate, it is saying to the public “we don’t care about your emergency services, we have other priorities.” Moreover, the public has no recourse when this happens. What if many taxpayers preferred unvaccinated firemen to no firemen at all? Well, the government’s position is clearly “tough luck.” Although the taxpayers are forced to now pay for services they’re not receiving at all in some cases, the taxpayers have no other options. Ironically, these services that politicians insisted were far too important to allow the private sector to handle have now decided those services aren’t actually all that important after all.

Effects on Prices and Production

Ultimately, by driving down employment, these policies that lead to mandate-forced layoffs will also drive down the production of goods and services. This will further fuel price inflation in an economy where production already isn’t keeping with the growth in new money. Fewer services. Higher prices. More families facing unemployment. Perhaps its no wonder that one labor union leader told Reuters

A life-long Democrat, [union official Cornell] Beard said he would no longer vote for the [Democratic] party. “They’ll never get another vote from me and I’m telling the workers here the same thing.”

Advocates of vaccine mandates are apparently doubling down on this. and their job has been made much easier thanks to federal contracts.