The Shell Game

Donald Boudreaux elaborates on a reader’s letter regarding minimum wage:

Although the economic outcome of minimum wages would be unchanged if the enforcement were imposed directly on workers rather than on employers, the true nature of minimum wages would be made clearer if enforcement were imposed directly on workers. The reason is that the minimum wage is targeted chiefly against workers, not employers. Save when employers have monopsony power in the labor market – a situation that no sensible person believes is remotely the reality in modern-day America – minimum-wage legislation raises the pay of some workers only by casting other workers out of jobs (or, more generally, only by reducing the employment prospects of other workers).

The best bureaucrat isn’t one who just “crafts policy,” but one who is creative enough to obfuscate the real effects of policy. It’s difficult to be upset with what you don’t see—i.e., job opportunities that never materialize—than what is readily perceived.

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