2021 Nobel Prize for Economics Blows Minimum Wage Debate out of the WATER!!
Recently there have been a lot of debates about raising the minimum wage in the USA and Canada. Conservative/Republican politicians say that the raise will affect hiring and business profits. And so the raise did not come thru. (USA) Or only in some places, despite it being a federal law now. (Canada)
….. con premiers in power
- Saskatchewan is $11.45 per hour and this rate is indexed to the Consumer Price Index (CPI). It is expected to increase to $11.81 Oct 2021
- Manitoba is one of the lowest in Canada at $11.95 per hour.
- Quebec is $13.50 per hour. It increased by $0.40 on May 1, 2021.
- Alberta’s was raised when the NDP were in power.
…… Nobel Prize
Guelph, Ont.-born David Card, with the University of California at Berkeley,
won the Nobel prize for economics Monday for pioneering research that showed an increase in minimum wage does not lead to less hiring and immigrants do not lower pay for native-born workers, challenging commonly held ideas. source
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2021
David Card “for his empirical contributions to labour economics”
Joshua D. Angrist and Guido W. Imbens “for their methodological contributions to the analysis of causal relationships” nobel prize
Many of the big questions in the social sciences deal with cause and effect. How does immigration affect pay and employment levels? How does a longer education affect someone’s future income? These questions are difficult to answer because we have nothing to use as a comparison. We do not know what would have happened if there had been less immigration or if that person had not continued studying.
Using natural experiments, David Card has analysed the labour market effects of minimum wages, immigration and education. His studies from the early 1990s challenged conventional wisdom, leading to new analyses and additional insights. The results showed, among other things, that increasing the minimum wage does not necessarily lead to fewer jobs. We now know that the incomes of people who were born in a country can benefit from new immigration, while people who immigrated at an earlier time risk being negatively affected. We have also realised that resources in schools are far more important for students’ future labour market success than was previously thought. nobel prize
This work will also take some legs out from under the racist claim that immigrants cost citizens $$ off their pay packets which (because of these economists’ work) is also disputable now.