Home > Income Distribution, Microeconomics, Tax Policy > The Effects of Government Price Controls, Part 3

The Effects of Government Price Controls, Part 3

I’m not quite sure why those in favor of a minimum wage increase don’t see it as a form of government price controls.

I don’t doubt that they have their heart in the right place. And there’s some evidence that, at least in the short-term, increases in the minimum wage don’t have the same effect as other government price controls. Demand for unskilled labor is almost certainly less elastic than demand for, say, television sets.

But it is a form of price control, and the expected effects shouldn’t be surprising:

Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects…

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