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Price controls do not negatively impact the labor market. Employment is an inelastic good, everybody needs it, even if the price sucks, and employers hold all

Price controls do not negatively impact the labor market. Employment is an inelastic good, everybody needs it, even if the price sucks, and employers hold all of the bargaining power. Wages naturally sink to zero in an unregulated environment. The United States has the cheapest labor in the developed world, despite being the most productive in the developed world, because it has the lowest minimum wage in the developed world, and it's not pegged to inflation, like in the rest of the developed world, so it's actually a constantly decreasing minimum wage. In the 12 years since the last minimum wage increase, inflation has decreased its value by 21.5%, the equivalent of $5.75 in 2007 dollars, which is, by the way, the longest period of stagnation it's ever seen. Prior to the Reagan administration, Congress raised the minimum wage by 5-10% annually. If that pattern had kept up, the minimum wage would be over $20 today, and if it had been kept close to inflation since 1978 it would be $16 today.

missedthecue 6y ago
Price controls absolutely affect the labor market. Whether or not a market has perfect demand and supply curves does not render them immune to price controls. It's why many white dominated communities passed minimum wages long ago, to keep blacks out of the workforce and from competing with white labor. They knew the implications of minimum wages, and wanted that result. In fact, prior to the federal minimum wage passing in the 1930s, blacks had a higher employment rate than whites. After the law passed, the employment level among african americans was destroyed. It still hasn't recovered. Minimum wage laws in the US are literally a very clear example of codified systemic racism and it's shocking how many people relentlessly support them. If we want low skill workers to take home more pay, subsidize their wages.

missedthecue 6y ago

Price controls absolutely affect the labor market. Whether or not a market has perfect demand and supply curves does not render them immune to price controls. It's why many white dominated communities passed minimum wages long ago, to keep blacks out of the workforce and from competing with white labor. They knew the implications of minimum wages, and wanted that result. In fact, prior to the federal minimum wage passing in the 1930s, blacks had a higher employment rate than whites. After the law passed, the employment level among african americans was destroyed. It still hasn't recovered. Minimum wage laws in the US are literally a very clear example of codified systemic racism and it's shocking how many people relentlessly support them. If we want low skill workers to take home more pay, subsidize their wages.