Friday, February 6, 2015
Minimum wages and what being modern means
uan Carlos Moreno-Brid and Stefanie Garry build on this graph to show the problems of having such a low minimum wage. This policy has all kinds of problems, including its negative effect on aggregate demand and productivity. Yet they point out something which is almost as important. Having a sufficiently high minimum wage that is also consistent with legal commitments should be considered part of being modern and developed--a member of the OECD. Too many times, neoliberal economists have dominated the debate on modernization, equating it to free markets and limited rights. It is time that we actually start arguing that meeting the requirements of the ILO and building social institutions is actually a central part of being a modern society in a global context.