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Swimming in Dangerous Policy Waters

To advocate, or even to tolerate, minimum wages set locally rather than nationally is to misunderstand not only the economic argument against minimum wages, but, more generally, the economic argument counseling humility by government officials whose instincts are to intrude into the private economic affairs of ordinary people.

Such advocacy of local minimum-wage regulation is much like pointing out, correctly, that an inexperienced swimmer is less likely to drown if he dives into 20 feet of rough water 100 yards from shore than if he dives into 50 feet of rough water a mile from shore.  Just as the reduced chance of drowning in the first case compared to the second case does not mean that the inexperienced swimmer’s chances of drowning in the first case are therefore so acceptably low as to recommend such diving, the reduced chances that minimum wages set locally compared to minimum wages set nationally will cause harm to low-skilled workers does not recommend such legislation.

To be continued in a later post.