Seattle’s Minimum Wage

As many economists expected, the minimun wage in Seattle of $15.00 resulted in less hours worked per week and fewer jobs in addition to some people earning more money per week. In others words, it only helped some people at the expense of others, neutralizing or negating the expected benefits. This is what I like to call the “Contraindications” of social policies, just like pharmaceutical drugs all have negative side effects, so do all social polices. That’s right, “all” social policies have contraindications.

Adam Smith argued this in the 1750s, Frederic Bastiat in the 1850s and many more since then. Low and behold, we keep getting more a more evidence of this same conclusion. Jacob Vigor in this talk with Russ Roberts, summarizes the results of a study he and his group are conducting, arguing that while some workers earned higher wages, some or all of the gains were offset by reductions in hours worked and a reduction in the rate of job creation especially for low-skilled workers; obviously not what was entended.

http://www.econtalk.org/jacob-vigdor-on-the-seattle-minimum-wage/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+econtalk%2FxmOW+%28Econ+Talk%29

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