Right Hooks

Minimum Wage Hikes Hose Canadians, Too, Eh?

Business Review Board · Mar. 8, 2016

It’s not just American economists who are waving red flags when it comes to raising the minimum wage. The Canadian-based Fraser Institute recently published a study — “Raising the Minimum Wage: Misguided Policy, Unintended Consequences” — that analyzes the negative regulatory effect of minimum wage increases for Canadians. The executive summary states:

There is an enormous body of empirical research examining the effects of the minimum wage. Canadian studies are considered of higher quality than US studies because (among other reasons) there is a wider variability in the provincial Canadian minimum-wage variable. The Canadian literature generally finds that a 10% increase in the minimum wage reduces employment among teens and young adults (ages 15 to 24) by 3% to 6%. By making it harder for low-skilled workers to obtain an entry-level position, the minimum wage may perversely hinder the development of human capital and harm the long-term career prospects of the very people it ostensibly helps. Indeed, Canadian researchers have found that hiking the minimum wage has no statistically significant impact on poverty and in some cases can increase it.

Democrats often say that America needs to more emulate other countries, particularly Canada, Australia and Great Britain, because their Big Government boondoggles work. But no matter which country you analyze, the end result — whether we’re talking about government-run health care, generous benefits and entitlements or gun registration — is always the same: failure. Moreover, Democrats never mention the numerous studies like the Fraser Institute’s that completely refute their Socialist make-believe. It seems the only thing to them worth emulating is the rhetoric — not the evidence.

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