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Mark Perry, my friend and former research assistant at GMU Econ (from way back in the late 1980s) – and now, among other distinctions, prominent blogger at the AEI-hosted Carpe Diem – discusses alleged justifications for minimum-wage legislation as being examples of the Fallacy of the Special Case [2]. Here’s a slice:
The real danger of the Fallacy of the Special Case is that those allegedly special exceptions to economic fundamentals almost always result in legislation that is based primarily on political, and not economic, considerations – minimum wage laws, price gouging laws, ticket scalping laws and rent control laws. Ignoring economics and/or attempting to circumvent market pricing by allowing for some markets or goods to be “special” might make sense politically, but the legislation that follows makes us much worse off economically, makes us all poorer, and lowers our standard of living. Politicians and the general public can be excused for falling for the Fallacy of the Special Case and supporting price controls like the minimum wage that make us worse off, but shouldn’t the economics profession really know better?