Prices too high? Wages too low? What if politicians just … changed them?

To fight inflation in the 1970s, President Nixon froze all wages and prices in the country. The results? Shortages on essential items … and *increased* inflation.

While almost no one pushes for national price controls anymore, we keep trying them on a smaller scale … and keep seeing similar results.

For instance, some local governments limit how much landlords can charge for rent. When economists studied this in San Francisco, they found that the city’s program *reduced* the number of apartments … which *increased* prices.

Similarly, New York City discovered that the stricter an apartment’s rent control, the more likely the unit was to have potentially dangerous maintenance issues.

We see similar problems when the government dictates how much people are paid. After Seattle raised its minimum wage, low-skill workers saw their hours cut so much … that they earned *less* than before.

But here’s the good news: The problem isn’t what we’re doing; it’s how we’re doing it. From bringing down rents to increasing take-home pay, economists tell us that there are alternative approaches with fewer unintended consequences.

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