Econ labor market policy evaluation

ECON 370 - Minimum Wages and

Employment

Maggie Jones

Minimum Wages Across Canada

$13.85

$13.00

$13.46

$12.71

$15.00 $12.50

$11.65

$14.00

$11.32

$11.50

$11.40

$11.55

$12.25

YUKON NUNAVUT

NORTHWEST TERRITORIES

NEWFOUNDLAND AND LABRADOR

PRINCE EDWARD ISLAND

NOVA SCOTIA

NEW BRUNSWICK

QUEBEC

ONTARIO

MANITOBA

SASKATCHEWAN

ALBERTA BRITISH COLUMBIA

MINIMUM HOURLY WAGE RATES AS OF OCTOBER 1ST, 2019 RETAIL COUNCIL OF CANADA RetailCouncil.org

Minimum Wages and Employment

I In Canada: I Set by provinces and territories

I Highest: Alberta $15.00/hr I Lowest: Nova Scotia $11.55/hr

I Interprovincial/international industries are under federal jurisdiction

I In the United States I Set by local, state, and federal governments I Employers generally have to pay the highest out of the three

minimum wages

Minimum Wages and Employment

I One of the largest debates in labour economics revolves around the employment e↵ects of raising the minimum wage

I According to the theory of the firm, we expect wage increases to be accompanied by a decline in employment

I Empirical evidence does not always suggest this is the case

Card and Krueger

I In April, 1992, New Jersey increased the minimum wage from $4.25/hr to $5.05/hr

I Card and Krueger compare changes in employment in the fast food industry in New Jersey to that in Pennsylvania over the

same time period

I No evidence of reduced employment