Economics Book Minimum Wage Blog Image SmallMichal Rozworski’s article ‘Five Myths to Bust about Minimum Wage Hikes’ shares with the reader 5 myths regarding the minimum wage hikes, and starts off with a preliminary background on the issue of raising the minimum wage.  Rozworski expands into the effect it has had in the United States, summarizing the introduction with a synopsis of the minimum wage issue in British Columbia.

Rozworski describes the 5 myths which are:

  • Raising the minimum wage kills lots of jobs. In fact, further research indicates that raising the minimum wage doesn’t create a negative effect at all. Factors such as wage compression etc. Rozworski reminds the reader, that a 20 % wage increase that reduces a worker’s hours by 5 % still leads to a significant benefit to the worker.
  • Raising the minimum wage doesn’t help the very working poor it targets. Studies in the US have indicated that a 10% increase leads to a 2.4 to 3.6 % decrease in poverty.
  • Minimum wage earners are rich teenagers. The Wellesley Institute in Ontario calculated that 40% of workers making minimum wages are over the age of 25.
  • There are better ways to reduce poverty. The author agrees that increasing minimum wage should not be the only tool used to reduce poverty however, a wage increase is a significant tool when used with other tools to decrease poverty.
  • Economists are united in their opposition to minimum wage increases. The author informs the reader that a letter signed by over 600 economists (including seven past Nobel Prize winners) states that increasing minimum wage is a factor in boosting the economy, and in fact there is no hard evidence that shows any negative effect at all.

The author goes into detail regarding each of the myths, dispelling each of them with facts and statistical evidence to support his opinion. Rozworski actually provides the sources for dispelling the 5 myths, something that hasn’t occurred with all articles regarding this subject. He provides the reader with compelling reasons why raising the minimum wage actually benefits everyone involved.

Rozworski ends the article with a specific quotation regarding the view of economists, whose general consensus is that raising the minimum wage does not have a negative effect on the economy.

What do you think is the most significant myth to dispel about raising the minimum wage in Alberta?