My brilliant colleague Bryan Caplan reports the findings of a survey of empirical research into the elasticity of demand for labor. No surprise: empirical studies generally find that employers respond to higher wages by employing fewer hours of labor. (Although these empirical findings square perfectly with foundational economic theory, these findings are nearly impossible to square with the often-heard insistence that the market for low-skilled labor is so exceptional that minimum-wage legislation will often not worsen any low-skilled-workers’ job prospects.)
Government can hardly ever do just one thing. Its action has repercussions, and these repercussions have repercussions, and so forth. Even when the government’s initial action may seem compassionate or productive, it is highly unlike that the repercussions will prove likewise.
Perhaps a giant sticker should be plastered on the headquarters of the F.D.A. reading “These regulators may be hazardous to your health.” Sally Satel explains.