Different Sorts of Price Controls

Diction, people, diction. Steve Chapman ignores an import different between setting a minimum wage and setting a price for gasoline. The former introduces a floor; the latter a ceiling. The economic effects of those may be very different. As to whether one works and the other doesn’t or neither works, it depends on your operative definition of “work”.

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  • PD Shaw Link

    He seems to get the basic concepts right, but goes about it wrong. A minimum wage doesn’t create a “shortage of jobs,” like a shortage of gasoline caused by price ceilings. A price floor creates a surplus of low-skilled labor. Not all of their labor is in demand at a higher rate. The important distinction is that the employer can or should be selective in terms of who is hired and retained, focussing on those whose productivity comes closest to the wage set.

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