Fare Wage

by Don Boudreaux on October 7, 2014

in Seen and Unseen, Work

On one of DC’s news radio stations this morning (either WTOP or WNEW, I don’t recall which) I heard a report of “community activists” protesting a proposed increase in fares to be charged by a government-operated bus line in Washington.  The activists (according to the reporter) insisted that “any fare hike will reduce ridership.”

Indeed so.  That’s the universal effect of higher costs: if the costs that an individual incurs as a result of his or her choice to engage in activity X rise, that individual will choose to engage in less X per period of time than he or she would have chosen to engage in had the costs to that individual of engaging in X not risen.  (Note that this effect of higher costs does not imply that higher costs are unjustified.  If X is a scarce good or service, or if people must use scarce goods or services to engage in X, then it is often beneficial for people to engage in less X.)

But my question: How many of the community activists who correctly understand the dampening effect that higher bus fares will have on the quantity of bus-service demanded also believe that government should raise the minimum wage?  I’d not be surprised if a great majority of the very same people who argue against raising bus fares (because higher bus fares reduce ridership) deny that raising the minimum age reduces the job prospects of low-skilled workers – or at least never stop to make this connection.

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