The typical politician does not oppose free trade because he took an advanced econ course and learned there that, under just the right combination of real-world circumstances, an optimally imposed tariff can be justified on economic grounds. No. The typical politician opposes free trade because he doesn’t understand the first thing about economics. (...)
The typical politician doesn’t support minimum-wage legislation because she has concluded, after careful study, that employers of low-skilled workers have sufficient amounts of monopsony power in the labor market (as well as monopoly power in their output markets) to nullify the prediction of basic supply-and-demand analysis and, instead, to create real-world conditions that enable a scientifically set minimum wage actually to improve the welfare of most low-skilled workers without reducing the employment prospects of any of them. No. She supports minimum-wage legislation because she believes that raising the minimum wage will result simply in all low-skilled workers getting the stipulated pay raise without any negative consequences befalling these workers.
Monday, October 24, 2016
Publicada por Miguel Madeira em 10:44