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Quotation of the Day…

… is from page 608 of volume 2 of The Collected Works of Armen A. Alchian (2006); specifically, it’s from Alchian‘s 1977 essay “Economic Laws and Political Legislation”:

Minimum wage laws ostensibly devised to raise wages of the lowest wage earners do not.  The number of employees an employer can profitably hire is reduced.  Some lose jobs and must work at lower paying jobs exempt from the law, or if none is exempt, work as self-employed, for which there is no minimum wage law, or simply leave the workforce, or substitute poorer working conditions for the higher wages.  Even those who retain jobs are not better off in the long run.  Some who would be displaced will offer to work (at the higher wages) with less nonmonetary pay – stricter discipline on the job, poorer circumstances such as less time off, fewer coffee breaks, vacations, or fringe benefits.  Employees will offer to forsake some of those things for the higher required wage rate to retain existing jobs, rather than take the inferior alternative of working in jobs not covered by the law, or becoming self-employed or departing from the labor force into “leisure.”  Economic law is not suppressed by legislated law.