Minimum wage promoted by the Financial Times: “It works”

According to the British newspaper, it “reduces inequality without penalizing employment”

“The minimum wage works because it reduces wage inequality without penalizing employment, even if productivity is not increased.” This is what we read in an analysis in the “Financial Times”, which however does not take into account the political debate underway in Italy.

When Germany introduced the minimum wage in 2015, it reduced wage inequality without hurting people’s employment prospects. The same happened in the UK: when the Conservative government raised the minimum wage for the over-25s in 2016, it didn’t boost productivity much, but it did reduce low wages and at the same time it raised employment levels. Other countries and regions have taken the same approach, from South Korea to several US states.

Even in the face of inflationary pressures, underlines the FT, the measure seems to have held. According to research by OECD economists, in fact, “most of the countries that are part of the Organization have kept their nerve and raised minimum wages to try to keep up with inflation”. Nor does the inflation-wage spiral seem to have started.