The Simple Economics of Minimum Wages

Research output: Other contribution



The paper surveys minimum wages setting and finds adverse employment effects broadly in line with conventional economic models. Admittedly, UK studies generally report small effects, but the UK is poorly suited for measurement given confounding changes in welfare benefits and lack of regional variation. Clarity is found in better empirical settings such as Canada, which has sharp minimum wage variations and provincial differences, and also in the OECD country panels. Case studies are also reviewed including South Africa (the minimum wage as a white supremacy weapon), Portugal (where extension of collective agreements are analogous to minimum wages, and reduce employment), and Greece (where the minimum encourages temporary work). Alternative ways of helping the poor via encouragement of stable families, more competitive school systems, and subsidies for low paid work are advanced.

Bibliographic note

Chapter 4 in Chris Coyne and Rachel Coyne (eds) Flaw and Ceilings: Price Controls and the Damage They Cause


Original languageEnglish
Media of outputbook
PublisherInstitute of Economic Affairs
Number of pages26
Place of PublicationLondon
ISBN (Print)978-0-255-36701-1
Publication statusPublished - 2015


  • minimum wages