World Governments Test Minimum-Wage Raises

Major economies consider trial and error to see at what threshold costs could outweigh benefits

By Tom Fairless of The WSJ. Excerpts:

"South Korea’s government has already increased the national minimum wage by about 30% since 2017, to $7.20 per hour, or around two-thirds of median pay, according to data from the Organization for Economic Cooperation and Development, a think tank for developed countries."

"The results so far are mixed.

France and Portugal until recently had the highest minimum wages among wealthy economies, at just over 60% of median pay. Both countries have struggled for years with high levels of youth unemployment."

"Hungary increased its minimum wage to 57% of median pay in 2002 from 36% two years earlier, according to OECD data. Following the reform, one in 10 minimum wage workers lost their jobs"

"A study in China also found that manufacturing firms responded to regional minimum-wage adjustments in the decade up to 2008 by automating routine tasks previously carried out by low-wage workers."