Category Archives: Price and Wage Controls

Minimum Wage Maximizes Teen Jobless Rate

The Washington Post has a story today about the difficulty young people are having finding summer jobs. Their unemployment rate is over 18%, compared with only 5.5% for the general population.

Nowhere in the article’s 825 words is the most likely culprit mentioned — the recent minimum wage increase, which affects young people more than any other age group.

When something costs more, people buy less of it. Raising the minimum wage makes it more expensive to hire workers. Ergo, fewer of them are hired.

EU Farmers Cry Over Spilled Milk

Dairy farmers in the EU are upset that milk prices are lower than they prefer. Production quotas were raised by two percent in April. The farmers have several options for raising their prices:

A) Produce less milk; scarcer supplies mean higher prices.

B) Move into a different, more lucrative line of work.

C) Mail 10,000 liters of milk to Brussels in protest, where bursting cartons and no refrigeration have raised quite the stink.

Needless to say, farmers decided on option C. Note that milk prices are actually 32% to 74% higher than they were a year ago.

If this is how farmers react to a two percent quota increase, imagine what they would do if the EU were to reform its Common Agricultural Policy…