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Go on, give it a little fisking, just for me -- please? I was actually reasonably persuaded by it!

If the author thinks that the poorest workers who are productive enough to find a job at current high minimum wage laws ought to be paid more, then perhaps he ought to volunteer to have his taxes raised and use taxpayer money to pay the workers the extra amount to raise their wages to a "reasonable" amount. I'm guessing he missed Phelps' ideas from recent editorials about incentivising employers via government transfers. He may not even have heard of Phelps.

Simply declaring that there aren't workers on the margin who don't produce enough wealth for their employers to receive that pay (along with hidden payroll taxes) is just plain ignorant. The increased unemployment from a 25+% hike in the minimum wage is not likely to get lost in statistical noise either the way increases in it may have been before now.

By the way, I think the term government transfer that I used is bad framing. I prefer "employer tax rebate", thus the government is merely giving the company back its own (tax) money for hiring low skill workers. Thus it is not giving away someone else's tax dollars.

The increased unemployment from a 25+% hike in the minimum wage is not likely to get lost in statistical noise either the way increases in it may have been before now.

Ontario just recently raised its minimum wage by 25%. Were any jobs lost? Well, were there? No. There never are. So why don't you cheap labour capitalists get a new song.

Your indignation is misplaced. I'm opposed to increasing the minimum wage because it will do nothing to reduce poverty, and will likely make it worse. A better policy would be an earned income tax credit, as they have in Quebec.

Robert McClelland,

How about another 25% increase a year or two later? Then another one? Then another one?

What about when the next recession hits? If inflation hasn't gradually lowered the job-destroying effect of minimum wages by the time the next recession hits, guess which workers will be worst hit, an dhave the hardest time finding new work?

The vast majority of economists favor some sort of transfer from the government, not a mandated one from business, to the working poor. Stephen Gordon mentioned the EITC which is the usual method advocated by people who understand economics. He has also previously mentioned a negative income tax of some sort for everyone. Then there is what recent Nobel Prize winning economist Edmund Phelps has advocated, which is in effect tax incentives from the government to hire the poor.

All of which are far superior than trying to pretend that supply and demand doesn't work in this instance (or any other instance for that matter). Under (higher) minimum wages, some workers will become unemployed via price floors on labor's wages, some will simply not get hired where they otherwise would have, some will lose out on on-the-job perks like breaks, while still others will see their hours reduced instead of getting laid off.

The effects will become more pronounced over time with each recession that occurs. There are good reasons why Canada has had a higher unemployment rate than the US over the past few decades. This is one of them.

Artificially reducing the marginal return of hiring low skill workers isn't intelligent economic policy, and is a *poor* way of helping the poor. Better policy is to do the opposite and find ways to increase the marginal return on hiring the poor.

There is also the old canard of improving education so as to improve people's productivity, thus reducing the number of people making low wages, but the devil is in the details and I won't go there.

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