Tuesday, September 14, 2004

I can't resist exposing unintended consequences of well-meaning social programs. Here's a new one (to me) related to the minimum wage: by having a minimum wage, a state blocks entry to the workforce to certain very low-wage and entry-level workers, and this affects the stepping-stone process by which low-wage workers move up the chain to earn higher wages. In other words, a minimum wage hurts a state's rate of moderate wage employment later on. A great explanation at Marginal Revolution.

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