New minimum wage study released

A new study about the impact of raising the minimum wage in Canada has just been released by the Canadian Centre for Policy Alternatives. Again, even though the report is about Canada, the arguments seem quite similar to those in the US.

Some highlights from the report (which I'm still reading so could be adding more thoughts later):

Critics typically make three types of arguments against increasing minimum wages: there are so few people working at the minimum wage the problem is trivial; because most minimum wage earners are young people living at home, we shouldn’t be worried about what they are paid, and; negative employment effects from increasesin minimum wages are so substantial that higher minimum wages will actually hurt more than they will help.

This study debunks those myths.

...

Some critics characterize minimum wage policy as strictly an antipoverty measure and dismiss the minimum wage as a “blunt instrument for dealing with poverty.” This study, by contrast, sets minimum wage policy in its appropriate context as labourmarket regulation. It argues that the minimum wage is a reflection of the value our society places on work.

While a decent minimum wage would help alleviate poverty, it cannot be expected to eliminate poverty. Minimum wage policy is but one tool in a toolbox of policy options which, taken as a whole, can go a long way to addressing Canada’s persistent poverty problem.

This study finds many positive effects of a higher minimum wage, including:
• Increasing the minimum wage benefits all low-wage workers. It helps those who earn between the current minimum wage and the new higher minimum wage. And it helps those who are paid close to the level of the new minimum wage.
• Good employers who pay decently (or want to), but who compete with firms that don’t, will find themselves on a more level playing field.

• Employers will also benefit from less turnover and easier recruitment. Workers can easily be lured away from employers that provide low pay. The negative consequences of high turnover include added staffing and training costs, administrative costs, operational disruption, lost productivity, and low morale.
• A higher minimum wage can increase the independence and self-sufficiency of teens and youth — enabling young adults to leave home, and helping to reduce post-secondary education debt loads.
• Finally, increasing the total wage bill for those at the bottom end of the labour market can also lead to positive health outcomes. The broader trend is that poverty increases illness and health costs.