A general flat minimum-wage law for all industry is…
“A general flat minimum-wage law for all industry is permissible, but I do not think that it is a particularly wise method of achieving the end. I know much better methods of providing a minimum for everybody. But once you turn from laying down a general minimum for all industry to decreeing particular and different minimum for different industries, then, of course, you make the price mechanism inoperative, because it is no longer the price mechanism which will guide people between industries and trades.”
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
A general minimum-wage law across all industries is allowed but not the best solution; sector-specific minima disrupt price signals that allocate resources efficiently.
In simple terms: A universal wage floor is permissible but less effective than tailored approaches.
Key Takeaway
Consider targeted policies that preserve market mechanisms.
Themes
economics
policy
efficiency
labor
Mood
analytical
critical
Type
theoretical
policy‑oriented
When to use this quote
- setting sector wages
- designing social safety nets
- balancing equity and efficiency
- evaluating labor market impacts
Key Concepts
price mechanism
allocation
minimum wage
industry regulation
Questions to Reflect On
- How can we balance fairness with market flexibility?
- What alternatives preserve price signals while protecting workers?
A Different Perspective
Uniform wages may ignore regional cost-of-living differences, leading to unintended hardship.