Tuesday, June 1, 2010

CARPE DIEM (Minimum Wage Laws)

You know, as an informed population we would feel insulted if the government of this country attempted to pass a law that violated the law of gravity. Think of the benefits of such a law. We could save millions of gallons of aviation fuel if airplanes did not need to fight against gravity. We would look at these arguments as complete nonsense. Even if such a law was passed, the universe does not care. Gravity would still function and the law would be useless. However, as a population we do not seem to care when our government passes similar laws that violate similar immutable laws, such as the law of supply and demand. Minimum wage laws as such laws. If you raise the price of labor, assuming all else constant, the quantity of labor demanded declines. This is a fact and no law can change this. That is why I find such laws so ridiculous. Mark Perry talks about this in his post on his blog. I would recommend that everyone reads his post on the minimum wage and teenage unemployment.


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