Thinking about Minimum Wage Increases in Alberta

This Commentary initially began as a write-up of the talk, “Thinking about Minimum Wages: Theoretically, Empirically, and Regionally,” which was given to the Economic Society of Northern Alberta on September 30th, 2015, the day before the first of the four increases to Alberta’s minimum wage was to take effect. [...] The revisionist reviews of Card and Krueger (1995), size of this gap between the supply of work by Doucouliagos and Stanley (2009), and Krueger individuals and the demand for work by employers (2015a), should be read.6 depends on the relative responsiveness of employers This empirical literature on the effects and workers, as shown by the relative slopes of the of minimum wages on employment can b [...] The often-quoted US elasticity estimates there is monopsony power in a labour market, the imply that a 10 percent increase in the minimum monopsony wage and employment level are set wage reduces the affected employment, typically of below the competitive equilibrium, which results teenagers and young adults in this literature, by 1 to in a wage rate below the value of marginal product 3 percent (B [...] And third, the magnitude and statistical the elasticity estimates of the minimum wage significance of the negative estimates are greater effects on the employment rate are larger and than that of the positive estimates overall, but most have bounds that are wider than that of the of the statistically significant estimates are at, or just consensus US estimates. [...] The real challenge at that With regard to poverty, the effect of a minimum time will be to disentangle and isolate how much wage is theoretically ambiguous, as lower-wage of the changes in outcomes are attributable to workers could only gain in earnings with a higher the minimum wage policy and how much are wage rate if they remained employed and working attributable to the workings of the provinc