Saturday, August 31, 2013

Boudreaux on the Minimum Wage

Article Link

Source: Don Boudreaux, The Wages of Economic Ignorance, cafehayek.com, August 30, 2013

Analogy from the posting:
Do this mental experiment: Suppose government formally prohibits employers as well as all law-enforcement officials from prosecuting or otherwise in any way retaliating against or punishing employees who pilfer small amounts (say, cash or merchandise worth $50 or less each week) from their employers.  Would there be a serious debate about whether or not this enforced policy would prompt employers to protect themselves from the likely increase in pilfering by employees?  And suppose that after such a policy had been in place for a number of years some studies find that, as predicted by textbook neoclassical microeconomic theory, the employment prospects of workers and wannabe workers are reduced while other studies find no such negative effect.  Would it be regarded as an instance of responsible journalism to look only at the latter studies and then insist, based upon these studies, that increased employee pilfering – enforced by government! – has no effect on workers’ employment prospects?

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