Multi-Player Games

Reihan Salam in NRO has a nice discussion of the CBO report that Obamacare creates incentives that will decrease work.  There has been point and counterpoint about how bad these incentives are.  MWG will try to simplify the explanation for you.  The critical issue is: is this a multi-player game.  Workers are a player because they are changing their behavior.  Will businesses react to the new environment by changing their behavior or are they just price takers?

The CBO says the reduced incentives will cause less work.  Then workers will need a higher pay to work.  If so the argument becomes just like minimum wage.  If you think that businesses will accept the new wage then it is a mixed blessing with workers winning while some combination of consumers and investors are losing.  If you think as I do that businesses will consider their full array of options including automation and off-shoring then everybody loses under minimum wage.  It doesn’t matter if the government or the worker sets the minimum wage because the outcome is the same.  MWG is with Rich Galen:

A government program that makes it better for people to work less or not work at all is a government program that is terribly flawed.

Welcome to ordering off the computer.

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