French economic journalist and satirist Frédéric Bastiat, widely known for his sarcastic opposition to protectionism, observed in the mid-1840s, “In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.”
“Bad economists,” Bastiat mused, are those who pay attention only to the “immediate seen effects” and never foresee—because they never look for—the subsequent “not seen” effects. “Good economists” pay attention to both, the seen and the unseen.
California’s state legislators and governor have shown once again how bad they are as economists, using Bastiat’s gold standard. In September, Governor Gavin Newsom signed a new minimum-wage law (on top of the state’s current minimum hourly wage that will rise to $15.50 on January 1), dubbed “Fast Food Accountability and Standards Recovery Act,” or the Fast Act, that will go into effect this January, unless delayed (as likely) by a proposed ballot proposition that will force voter approval.
The Act’s supporters tout the law’s “seen effects” that they consider a public service: The law will create a ten-person, labor dominated Fast Food Sector Council that will proscribe “fast-food” (and “counter-order”) restaurant workers’ on-the-job treatment, fringe benefits, and minimum...
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