2 thoughts on “Increasing the minimum wage ignores economic realities”

  1. Posted 16/04/2013 at 19:01 | Permalink

    Over and above all this is the fact that the difference between the minimum wage and the true economic wage is yet another government stealth tax. Almost all taxes ultimately fall on the productive sector as does the burden of the minimum wage. As such they are both state imposed additional costs of production.

    Far better for us all that the government does not seek to impose a minimum wage on employers but instead “tops up” the wages of the “underpaid” by increasing taxes and in this way allows us all to see the real cost of this folly.

  2. Posted 17/04/2013 at 12:50 | Permalink

    Sounds plausable, but where’s the numbers? Brad DeLong did a back of the envelope calculation and found a 30p increase would destroy about 17,500 jobs. Small beer, I’m inclined to suggest, particularly with in-work poverty being so high. It’s worth remembering that at least in theory we recoup some of the minimum wage rise through a reduction in payments of in-work benefits. I’d also ask how you would “make work pay” if employers could get away with paying £2.50/hour. Maybe you could charge people for being unemployed?

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