Thats not the trick. The trick was and is underplaying the market power these guys have in specific labor segments because market power in labor can be a lot more localized than one would expect in certain situations and stuff like minimum wages give a tacit signal for what all the big employers in, for example, fast food should pay coordinating them like how a cartel would but without the illegal coordination meetings.

Social welfare programs distort in the sense that it turns people who could be contributing to the economy into drags on the economy by becoming unemployed welfare recipients.

This matters because it leads to a generally lower quality of life.

Importation of cheap foreign labor distorts in the sense of reducing the wages of low-skilled native residents.

Whatever doesn't suit our cartels agenda is considered as a distortion.