Minimum wage: International comparisons
Via a Timothy Taylor blog post, the following couple of graphs:
And an important priviso:
Moreover, minimum wages across countries should also evaluated in the context of other government spending programs or tax provisions that benefit low-wage families.
None of this is to say what minimum wage is right or wrong, or what set of social and economic policies are right and wrong. It is instead to note that, relative to mean and median income, NZ’s minimum wage is very high by international standards. Make of that whatever you will – and do so in the comments if you like.
My views on the minimum wage will appear at another time – far in the future. For now all I want to share are graphs.
My view is that what other countries do is irrelevant to the question of what would be the optimal policy for us, and so would never use a graph like this to justify lowering the minimum wage. But I wonder what Russ Norman’s view is, given how he uses a similar league table graph to justify increasing the top marginal tax rate.
Agree 100%, cross-country comparisons are always fraught. But consistency in using them is at least something we could hope for 😉
Just because we have to make a decision at a nation state-level doesn’t mean we can’t look to overseas experience, though. Benchmarking performance against others is a useful exercise. Okay, so there are differences between nations that make direct comparisons difficult, but it’s not exactly straightforward to just calculate an optimal minimum wage, either!
This is a useful post, but I have to say it is extraordinary how frequently this blog delivers reminds readers that some things are just value judgments. Yep, got it, thanks. You’d lose nothing by focusing your efforts on the bit where economists can add value, which is through the application of positive frameworks to particular issues, and bringing evidence to bear.