Thinking about minimum wages, and thinking about them like an economist

There is a movement afoot, and there is an election in the offing. Always a great dance to watch, no matter what the issue.

The latest show is taking place in Ontario, where “$15 & Fairness” is the rallying call for raising the minimum wage, and has found a willing partner in the province’s Premier who will go to the polls in the spring, but in the meantime has legislated significant increases in the minimum price for an hour of work. The same dance plays out in the United States, and in many cities and states a minimum wage of $15 per hour is becoming a reality.

The big question in Ontario is exactly that raised by The New York Times during the 2015 primaries when Bernie Sanders was battling Hillary Clinton for the Democratic nomination: “As the campaign for a $15 minimum wage has gained strength this year, even supporters of large minimum-wage increases have wondered how high the wage floor can rise before it reduces employment and hurts the economy.”

Something to think about, but how would you think about it if you were an economist? Here are four rules of the road that might come in handy regardless of which dance you might be watching next time.

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