Living Wage Bad in So Many Ways

You’ve probably noticed tha little yellow box on the home page of this website. It’s a quote from Henry Hazlitt that cites his “economics in one lesson” principle: The art of econmics is to look past the primary effect of some action to all of the good and bad effects that follow. This certainly applies to the “living wage” proposal that would set the miniumum wage in Albuquerque to $7.50 an hour, to be adjusted upward with the cosumer price index.
Here’s the chain of effects past the first one of raising the legal minimum: Those workers not worth $7.50 get fired. Cost of doing business in Albuquerque rises. Firms either raise prices or move out of town. Tax base declines. Taxe rates increase. Higher tax rates capitalized into the price of commercial and residential real estate, both of which decline.
So much more than (supposedly) just raising someone’s wages.