Agricultural price supports are rarely talked about. Politically justified on the basis of “Saving the Family Farm”, or “Stabilizing Farm Income”.
- They have resulted in extensive price supports for many products from milk to tobacco to wheat.
- Total Canadian government (federal and provincial) support to the agriculture and agri-food sector was an estimated $8.4 billion in 2009-2010.
The most visible example of Price Support, however, is the Minimum Wage.
Labour is just another commodity – it has suppliers or labourors, and it has consumers or businesses that need labour.
And if you raise the price of the commodity, the supply at that price will be greater than the demand at that price. The surplus is unemployment.
Minimum Wage laws, rather than providing a “Living Wage” to labour, results in increased unemployment.
This is documented by numerous studies in countries around the world.
Switzerland, for example, has no minimum wage laws, and has the lowest unemployment rate of the western democracies.