In Reality, prices for things are set by markets. There are hundreds – if not thousands – of different market factors that combine to determine said prices.
And these factors are constantly fluctuating. What is a good price for X today – may be too much tomorrow, and too little the day after.
So government mandating prices – is exceedingly stupid. Because it ignores these thousands of market factors. And never, ever adjusts to any of them. Instead, government bureaucrats – perhaps the least qualified gaggle of people on the planet – mandate unchanging, inflexible market terms. Often for decades before they revisit the damage they’ve done.
The federal government mandating prices for the nation is exceedingly stupid. For all of the above reasons. Plus, prices vary widely in different parts of the country. The price for a TV in Manhattan, New York City is more than a little different than the price for that TV in Manhattan, Kansas.
But state and local governments mandating prices is just about as stupid. They may allege to know their localities because they are closer to them. But they don’t – or else they wouldn’t be mandating prices.
The wage an employee earns is nothing more than the price of labor an employer pays to acquire the labor. Government mandating a minimum wage – is price-mandating.
How stupid is the federal minimum wage math?:
“Raising the federal minimum wage to $15 an hour by 2025 would…put 1.4 million Americans out of work, according to a study by the Congressional Budget Office released on Monday.
“A phase-in of a $15 minimum wage would also lift some 900,000 out of poverty, according to the nonpartisan CBO.”
So almost twice as many would be plunged into poverty as raised out of it. Excellent policy.
The local minimum wage math ain’t any better. And it isn’t just speculation – it’s reflection.
Seattle, Washington’s local government gave a minimum wage a go. How’d that go?
Seattle Restaurant Worker: I’m a Progressive, but the Minimum Wage Law Killed Jobs, Including Mine
Seattle’s Minimum Wage Increase Backfires:
“It was found in hindsight that this increase did not help things. It was shown that employers hired fewer people, or reduced the number of hours of work to help with the increase from a business perspective.
“The University of Washington’s study supports this argument and concluded that the number of hours worked by affected employees fell by around nine percent. The study also concluded that affected employees’ net earnings fell by $125 a month on average, something critics of the increase warned prior to the bill’s passing.”
Higher government-mandated labor prices? Lower hires, incomes, hours and benefits for the labor.
And it ain’t just labor government can screw up with price mandates. And they can screw things up by mandating artificially low prices just as much as they do mandating artificially high prices.
New York State Mandates $15-Per-Month High-Speed Internet:
“That is New York state’s newly mandated price for a high-speed Internet – otherwise known as broadband – connection for low-income households under a new law signed last week by Gov. Andrew Cuomo , the first of its kind in the United States, he claims.”
Except supplying high-speed Internet costs way more than $15-per-month. Which is why companies are charging more than $15-per-month.
So guess what will happen? Exactly what happened with Seattle’s minimum wage.
Seattle’s government mandated employers lose money hiring people. So Seattle’s employers fired people. And hired less. And worked them less. And gave them less benefits.
New York’s Internet price mandate for poor people – will do exactly the same to the Internet. Less investment. Which means less upgrades, updates and speeds.
And not just for poor people. For EVERYONE.
Internet providers have to make up their government-mandated losses – everywhere. Because math
Which means ALL of us get screwed.
Which seems to be the point of all government-centric policy.
It certainly is its inexorable result.
This first appeared in Red State.