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Minimum Wage's Unintended Consequences

Assunta Ng reports for Northwest Asian Weekly that the $15 minimum wage adopted by the town of Sea-Tac (the neighborhood of Seattle-Tacoma International Airport) is having results--and causing resentments--that the proponents of the new law probably did nor foresee.

Among them, fewer collateral benefits like free parking, free food during working hours and lower tips.

Seattle now has similar legislation for a much bigger constituency and other cities seem poised to follow.

It will be an interesting economic study-in-real-time. Perhaps a thriving. low-unemployment town like Seattle is right now will make the adjustment easily. After all, most day laborers, for example, already make $15 or more an hour.

On the other hand, the new minimum may come, as in Sea-Tac, with unintended reductions in other benefits that presently are provided by employers. And, of course, there will be lots of red tape due to the various exceptions and implementation timetables that have been adopted.

Some people are likely to do better, while others will find work harder to get. And you may see more growth in the already large underground economy--the one the taxman misses.

The price of labor would seem to defy government regulation, just like the price of other public goods. Ironically, one government policy that does exert effective pressure on the real price of labor is tolerance of illegal immigration. The Left doesn't want to talk about it because the pressure on labor prices is downward, of course.


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