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Sick Economics

Here’s a letter to the New York Times:

New Yorkers must be a very odd bunch indeed.  Mandated higher costs of acquiring some things in Gotham – such as sugary drinks and cigarettes – will cause that city’s residents to cut back on their use of these things.  That’s why the city’s government wants to ban the sales of sugary drinks in large containers and to keep cigarettes hidden from view in retail stores.

But mandated higher costs of acquiring other things in Gotham – such as hired labor – will have no such effect.  This assumed reality is why City Hall will force many firms operating in New York City to give their employees paid sick leave (“Deal Reached to Force Paid Sick Leave in New York City,” March 29).  Most members of the City Council reject the idea that employers respond in the same way to higher costs of employing workers as consumers respond to higher costs of getting Big Gulps.

But New Yorkers apparently are all alike in one way: all are too stupid to make their own economic choices.  As consumers, New Yorkers are too stupid not to consume what their leaders know New Yorkers don’t want to consume.  As employees, New Yorkers are too stupid to seek employment terms that their leaders know New Yorkers want to work under.  And as employers, New Yorkers are too stupid to compete for workers by offering employment terms that their leaders know New Yorkers want to work under.

All of which raises this question: how were New Yorkers wise enough to elect the geniuses who rule them?

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030

In fairness to Mayor Michael Bloomberg, even he – Hizznudger himself – objects to the mandated-paid-sick-leave legislation.

UPDATE: Of course, unlike with restrictions on the sales of many retail items, the ways for employers and employees to mutually adjust to mandated paid sick leaves are numerous.  Most obviously, workers’ pay can fall below levels that this pay would otherwise attain.  Such adjustments – such as lower worker pay – make both employers and employees better off than they would be, in the face of this mandate, if these adjustments were not possible, but not as well off as both would be in the absence of the mandate.


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