Price Floors Bleg

I had a thought regarding minimum wage and price floors today.  My thought is this:

Minimum wage doesn’t have the same severe consequences that other forms of price control (like gouging legislation or gas price caps).  Part of that is because the increase is phased in, but I also wonder if some of it is due to that, in the US anyway, prices tend to rise over time.  This would mean that any floor would, naturally, be ineffective after a short period (or would become less effective over time).

What I am looking for you, dear readers, is information on other price floors (like milk supports).  I’d like to see how accurate my thought is over multiple items.  I’d also like to see if linking price floors to some inflation measurement is more likely to cause the negative effects to be more noticeable then a floor that is only set at a nominal place.

Many thanks!

6 thoughts on “Price Floors Bleg

  1. While not addressing the specific question you raise, I would observe that one of the reasons consequences of minimum wage are not more severe is the very small proportion of the labor force (less than 5%) that toils at or below this mandated price floor.

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    • Another reason is that probably rarely (though I have no data for this) are they ever set very much above the “natural” lowest wage, and then only for a small section of the economy (that which uses low skill workers, of course).

      On the other hand we’re seeing some pretty significant min wage raises lately that are indeed likely to have noticeable and more immediate consequences; and indeed already are as shown in some anecdotes out of Seattle and LA. Of course these things have little effect on most who support these measures as they are almost entirely immune to actual facts.

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  2. Finally, the people who suffer the most are invisible, and you can’t draw a direct line back to a specific person.

    (yes, I meant the people are invisible, not just the effects, because the permanently disenfranchised don’t make for a winning voting bloc)

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    • And they are willing cheerleaders against their own interests; tragically misinformed. It’s really all so tragic.

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