Two Wrongs Don’t Make a Right

An article in the Springfield News-Leader reports on a labor law that has more to do with retaliation than with sound economic principles:

Twenty-two states including Illinois, Iowa and Oklahoma, have laws that restrict Missouri laborers from working on public works projects in those states during high unemployment.

Accordingly, Missouri Law states that during such periods, public works projects may only employ Missourians or workers from nonrestrictive states.

The other states that have restrictions in place are hurting their own taxpayers through protectionism. Missouri shouldn’t imitate them.

The first reason is that Missouri shouldn’t waste its tax money just because other states are doing it. Second, beyond the adverse effects of the policy itself, this kind of retaliation makes it less likely that other states will do away with their protectionist laws. If we ignore another state’s bad law, the citizens of that state might eventually learn from our example and realize that their policy is short-sighted. If we instead copy them, they’ll take it as validation of their unwise law. Even worse, states can get locked into a protectionist arms race in which no state will reform its labor laws unless other states act first.