The Punchline of Labor Market Regulation

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.

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