The government isn't an interloper inserting itself. The government is US. We are negotiating with employers in a fashion where we actually possess enough influence to make a difference.
- Everyone believes that if they and everyone else had a 32 hour work week, they'd be happier
- Everyone stays at 40 hours per week when given the choice of independently moving to a 32 hour work week due to social / economic pressures
In this case a government law helps everyone coordinate to get out of a local maximum.
What I have never understood so far, is that all the advocates of markets simply declare them free, as if reducing government involvement is going to solve inherent imbalances in power. The end result is branded "free market" when it is anything but.