Suppose the government criminalizes hiring someone who produces less than an arbitrary threshold. Or it forces the closure of all businesses deemed to be non “essential”. Or it makes all employers obtain government permission for a long and growing list of things, and then denies permission arbitrarily and capriciously to some, while constantly raising the compliance burden—and hence cost—to the dwindling survivors.
Whatever the high-minded intentions, the end result is that these policies render some people unemployed and unemployable. Change happens at the margin. The marginal worker loses his job. And each bad policy increment raises the margin further.
The Perverse Outcomes of Bad Policy
If this was the full extent of it, then the politicians who imposed these policies would be voted out of office. And their bad policies would be repealed. A direct connection between cause and effect would make it obvious what happened. People could see that the law, though it had high-sounding reasons, actually achieved a perverse outcome.
No doubt workers want a raise. But when the government enacts a minimum wage law, some workers do not get a raise. They get fired. Those fired workers would be leading the angry pitchfork- and torch-wielding crowd calling to vote the bums out of office.
But for one thing…
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