That top chart is wrong. Many of those countries understate their minimum wage with absurdly high employer payroll tax withholding, large amounts of mandated paid vacation and severance, and other punitive hiring (and firing) expenses that don't exist elsewhere.
Here's Peter Schiff showing how the minimum wage in Spain is really what would be multiples of the federal minimum wage in the US:
It doesn't mean the chart is wrong about the minimum wage. It means that other regulations are in play besides the minimum wage that cause the unemployment. And it is not surprising they would exist in countries with high minimum wages.
We should also compare the minimum wage with the average productivity of unskilled labor in each country. $5.79 in Spain might be a higher barrier than $11.50 in the Netherlands.
That top chart is wrong. Many of those countries understate their minimum wage with absurdly high employer payroll tax withholding, large amounts of mandated paid vacation and severance, and other punitive hiring (and firing) expenses that don't exist elsewhere.
ReplyDeleteHere's Peter Schiff showing how the minimum wage in Spain is really what would be multiples of the federal minimum wage in the US:
https://youtu.be/1EcOUfvmliU?t=1m35s
It doesn't mean the chart is wrong about the minimum wage. It means that other regulations are in play besides the minimum wage that cause the unemployment. And it is not surprising they would exist in countries with high minimum wages.
ReplyDeleteWe should also compare the minimum wage with the average productivity of unskilled labor in each country. $5.79 in Spain might be a higher barrier than $11.50 in the Netherlands.
ReplyDelete