Effective Minimum Wage Endorsed by Financial Times

The minimum wage works because it reduces wage inequality without penalizing employment, even if productivity does not increase.” This is what we read in an analysis of the “Financial Times”, which however does not take into account the current political debate in Italy.

When Germany introduced the minimum wage in 2015, it reduced wage inequality without harming citizens’ job prospects. The same thing happened in the UK: when the Conservative government raised the minimum wage for the over-25s in 2016, it didn’t improve productivity much, but it cut low wages while increasing employment levels. Other countries and regions have taken the same approach, from South Korea to several US states.

Even in the face of inflationary pressures, the FT points out, the measure seems to have held. According to a study by OECD economists, in fact, “most countries that are part of the Organization have kept their cool and raised the minimum wage in an attempt to keep pace with inflation”. The inflation-wage spiral does not seem to have started either.

This article is originally published on nouvelles-du-monde.com

Beth Malcolm

Beth Malcolm is Scottish based Journalist at Heriot-Watt University studying French and British Sign Language. She is originally from the north west of England but is living in Edinburgh to complete her studies.