Price controls do nothing to improve the economy as a whole [“How a $15 minimum wage could affect services to poor, vulnerable,” Opinion, May 12]. With regard to price floors like the minimum wage, the higher the floor the greater the economic harm. If this were not true, then why not raise the minimum wage to $50 an hour?
Supporters of the minimum wage should also support other forms of price controls, like ceilings on gas and rent. Price ceilings are much easier to understand because the resulting rationing becomes obvious. In the case of minimum-wage price floors, the economic damage is excess supply of workers and unemployment.
The only logical purpose for a price floor is to intentionally create excess supply. Many countries impose government mandated price floors for certain agricultural commodities. The government does this because they want to avoid food shortages. In this case, the economic costs are viewed as necessary to help ensure the food supply. Taxpayers end up paying these costs since the government purchases the excess supply.
Taxpayers should prepare to pay for the extra social costs associated with a higher unemployment rate due to the excess supply of labor. This is simple economics.
Nick Wold, Auburn