I’ve admitted before that I am no economist. Fact is, I haven’t even ever taken a class in economics. However, I did major in mathematics and work significantly with statistics at my current job. As I tell my boss, “I’m nifty with numbers”.
So, as I wax poetic on all of these economic issues I do so with a bit of trepidation. See, really, from an “expert’s” point of view, I don’t know what I’m talking about.
Which makes seeing two of my most often repeated mantras in text at one time very exciting. This article from Mises.org just made my morning:
Mandating benefits for employees imposes costs on employment. The would-be worker bears the cost. It makes the worker more expensive to hire. The employer has to pay not only a salary but also a benefit. If you make it more expensive to hire people, fewer people will be hired.
It is no different from eggs at the supermarket. If they are $2 each, you will purchase fewer of them — you will economize. This is nothing but the law of demand: consumers will demand less of a good at a higher price than of a good at a lower price. A salary plus benefits amounts to a price that the employer must pay to purchase the work of a laborer. At a higher price, less work will be purchased by the employer.
You should read the whole article; it’s fantastically simple. And for once, I see in print, what I seem to intuit. And furthermore, it is verbalized with economic expertize that I simply can’t claim:
There is no real reason to prove these assertions empirically since they flow from the logic of economics.
The article is entitled “The Jobs Program” and deals with health care:
Sadly, there is no way that free health care can be granted to all living things with the stroke of a pen. Broadening availability will require that the entire sector be turned over to the private sector, so that it can be controlled through the price system like everything else.
But while Mr. Rockwell is speaking about the current health care bill, his article could easily be speaking about the new minimum wage increase slated this month.