04/13/05

Whenever government forcibly raises employment costs it causes marginal labor, that is, labor that barely covers its costs, to become submarginal. It does not matter whether government orders wage rates to rise or benefits to be improved, the workday to be shortened, overtime pay to be raised, funds to be set aside for sickness and old age, or any other benefit to be granted. A small boost renders few workers submarginal, a large boost affects many. In matters of employment they now are 'unproductive' and cannot be used economically...

http://www.mises.org/story/1782

from Ludwig von Mises Institute, by Hans F. Sennholz


Informant: Thomas L. Knapp