Minimum Wage in the UK - Reality V Theory

[[Phill]]

Ok. Ill try and make this brief, because this is as much a question as anything.

In the UK the minimum wage bill was introduced in 1997 - and came into law in 1998.

At the time there was te usual arguments about how the min wage introduction will create more unemployment.

This has been proven to not be the case. Both after its introduction (though there was an initial market reaction) and therafter on its increases.

When anyone trys to use the UK as a case study it is often shot down as being irrelivent to the US.

I believe that at a certian point a higher min wage will harm jobs, but at more than £5 we have yet to find that figure.

So, lets cut through the BS - why do you guys believe this to be an irrelivent point in arguing the case of the minimum wage?

What is different in what is done over here than what is done in the US?

Im no economist, so my theoretical knowledge is pretty low, but i do know the min wage didnt collapse the UK economy.

[Dan.]

I'll stop posting on 2p2 the day that an ACist accepts real data over theory.

[MidGe]

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'll stop posting on 2p2 the day that an ACist accepts real data over theory.

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[img]/images/graemlins/smile.gif[/img] nh

[tolbiny]

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So, lets cut through the BS - why do you guys believe this to be an irrelivent point in arguing the case of the minimum wage?

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Because the economic environment from 1998-2006 =! the environement 1990-1998. You cannot reproduce those exact variables while altering only the minimum wage. Other laws have been passed or repealed productivity has been increased by technological improvements or a thousand other things. No one in chemistry, biology, physics or any other science would count such a data point as valid. Its like mixing a chemical reaction in your kitchen sink. YOu have no idea if the results you get are going to be reproducable as any number of residus could act as a catalyst or inhibitor or add in an altogether different reaction. So basically
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This has been proven to not be the case

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this statement isn't even close to being correct.
Think of all the things that changed from 199-2006. The tech bubble, war, terrorist attacks.

[pvn]

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I'll stop posting on 2p2 the day that an ACist accepts real data over theory.

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I pushed all in on the first hand of the WSOPME with 72o. I got called by AA. Flop came 772.

I'll stop posting on 2p2 the day that Sklansky accepts REAL DATA over theory.

PS: where's the control group?

[clowntable]

I can only assume that one of the reasons why US and UK might be different is that there is more of a hire&fire mindset in the US.
With this I tend to think that employees act more like the proposed theories and thus a minimum wage is more harmfull.
I haven't really given this a lot of thought so I might be way off base.
But anyone defending the minimum wage is more off base anyways :P

From a politicians point of view a minimum wage proposal might be good though because there seem to be more people in any given country that are afraid of the future than people that understand economics.
So a good strategy for a politician might be "propose minimum wage"+spread fear (globalization etc.)

[Borodog]

[ QUOTE ]
Ok. Ill try and make this brief, because this is as much a question as anything.

In the UK the minimum wage bill was introduced in 1997 - and came into law in 1998.

At the time there was te usual arguments about how the min wage introduction will create more unemployment.

This has been proven to not be the case. Both after its introduction (though there was an initial market reaction) and therafter on its increases.

When anyone trys to use the UK as a case study it is often shot down as being irrelivent to the US.

I believe that at a certian point a higher min wage will harm jobs, but at more than £5 we have yet to find that figure.

So, lets cut through the BS - why do you guys believe this to be an irrelivent point in arguing the case of the minimum wage?

What is different in what is done over here than what is done in the US?

Im no economist, so my theoretical knowledge is pretty low, but i do know the min wage didnt collapse the UK economy.

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Empirical data cannot supercede (correct) theory in the social sciences, because what is logically derived from true premises is itself true. There are practically in infinite number of uncontrolled and uncontrollable variables in the world. It may very well be the case that subsequent to an increase in the minimum wage, employment might not fall, or it might even go up. However, that does not in any way imply that the rise in the minimum wage caused the increase in employment. It can't. What we can say with absolute, 100% certainty is that employment would have increased at least as much, and almost certainly more, without the increase in the minimum wage.

[clowntable]

I always thought that a false conclusion can be drwan from true premises.

[stephan]

Wasn't there a big economic boom then? Weren't we in the height of the tech boom? You guys have internet over on that side of the pond? I bet if this law was passed in 2000 you'd have rise in unemployment.

[hmkpoker]

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I'll stop posting on 2p2 the day that an ACist accepts real data over theory.

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I'm still waiting to see some real (read: scientifically meaningful) data.