The Punchline of Labor Market Regulation
By Bryan Caplan
Last night, while rewatching the classic Simpsons “Saddlesore Galatica,” I came across a great pedagogical moment that even Homer Economicus: The Simpsons and Economics misses. In the episode, an abusive horse trainer flees from the state fair, leaving his mistreated equine behind. Hilarity ensues:
Officer Wiggum: I’m afraid this horse is going
to the dog food factory.
Homer: Good luck getting a horse
to eat dog food.
Bart: You can’t do that to Duncan. It’s not his fault that his owner was a sleaze.
Officer Wiggum: Look. I just want the horse to have
a good home or be food. If you want to take him, fine with me.
Though the Simpsons writers almost surely didn’t intend this as a critique of labor market regulation, the shoe fits. Imagine Officer Wiggum on…
The minimum wage: “Look. I just want the worker to make $15 an hour or be unemployed.”
Health insurance mandates: “Look. I just want the worker to have free medical care or be unemployed.”
Firing restrictions: “Look. I just want the worker to have complete job security or be unemployed.”
Could legally imposing these stark ultimatums be good strategy for pro-worker policy-makers? Anything’s possible. The point is that stark ultimatums are a double-edged sword, not a no-brainer. A devoted horse-lover really could sensibly favor an option in between “good home” and “food.” A friend of the workers really could sensibly oppose the minimum wage. It all depends on something almost no human being even understands, much less measures: elasticities.