Well, there is a new policy think tank in Canada and they have just released a commentary on the minimum wage.
The commentary's author is Morley Gunderson and the long and short of the piece is that minimum wage legislation makes for good politics but poor economics. Gunderson recommends that: i) the discourse around minimum wages needs to place more emphasis on the adverse employment effects; ii) increases should be flexible and dependent on the state of the economy; iii) adjustments should be continuous small increases rather than large and infrequent; and iv) minimum wage increases should not be used as a poverty reduction tool.
You can check out the report and visit the NPI web site.
I wish to announce that I'm a think tank :-)
Posted by: Ralph Musgrave | July 29, 2014 at 12:11 PM
If I may borrow from Richard Nixon, we are all think tanks now!:-)
Posted by: Livio Di Matteo | July 29, 2014 at 01:00 PM
People are corporations, my friend. ;)
Posted by: Min | July 29, 2014 at 02:44 PM
To quote a friend:- "Pay people less ! We all get rich !" Yes.
Posted by: Bill Long | July 29, 2014 at 03:56 PM
The author gives a good summary of the negative economics effects of minimum wages. After listing some of the possible mitigating effects, he writes "Clearly there are a variety of potentially offsetting factors that could at least mitigate some of the otherwise potential adverse consequences of minimum wages. In many cases, however, they carry other adverse consequences for workers. In other cases, they are ones that employers would have an incentive to apply even without the prompting from government induced minimum wage increases." Given this, I was surprised at the conclusion that "This is not meant to imply that minimum wage laws should be repealed or even that they be frozen at current levels." It seems to be precisely what the analysis does imply. Perhaps the author realizes that the appeal to politicians and interest groups (summarized on page 9) is just too strong.
Posted by: Steve Ambler | July 29, 2014 at 04:42 PM
@ Livio,
an off-topic comment. Remember the discussion about OECD life expectancy depend on being easter european, and presumably, the fraction of uninsured, like in the US and Mexico?
The first effect was clear, there were plent of points.
And for the second, I stumbled now about the counter argument. Ireland has also large numbers of uninsured, but life expectancy at 80.x years.
There is something other specific about the US to cut 2 years of the average life.
Posted by: genauer | August 02, 2014 at 08:36 AM