Archive · 29 Jan 2026
Economists Reevaluate High Minimum Wages
Economists are now questioning the benefits of high minimum wages.
While these wages have helped reduce poverty and inequality, new research suggests they might have some negative side effects.
For example, they could lead to fewer jobs, less predictable work schedules, more workplace injuries, and reduced investment by companies.
Additionally, the benefits might not always go to those who need them the most.
Despite these concerns, many governments continue to raise minimum wages, as it is a popular policy.
However, economists warn that there might be a limit to how high these wages should go.
Minimum wages have doubled in Mexico relative to median pay, with similar trends in Britain, South Korea, Germany, and New Zealand.
In the U.S., state and local minimum wages have risen significantly, making the federal minimum wage largely irrelevant.
New research suggests that high minimum wages may have negative side effects, such as reduced employment, less predictable work schedules, and more workplace injuries.
Minimum wages may not always benefit the most needy, as many low-paid workers live in middle- or high-earning households.
Despite these concerns, governments continue to raise minimum wages, with economists warning that there may be a limit to how high they should go.
- Who
- Economists, policymakers, and workers in various countries
- What
- Reevaluation of the impact of high minimum wages
- When
- Between 2014 and 2024, with ongoing debates
- Where
- Globally, with specific examples from Mexico, Britain, South Korea, Germany, New Zealand, and the United States
- Why
- To understand the economic and social impacts of high minimum wages
- Mexico Minimum Wage
- 278.8 pesos ($15.20) per day
- Mexico Minimum Wage Increase
- Doubled relative to median pay (2014-2024)
- Britain Minimum Wage
- Increased from 47% to 61% of median earnings (2014-2024)
- Germany Minimum Wage
- Introduced in 2015, now 51% of median pay
- New Zealand Minimum Wage
- Almost at Mexican levels relative to higher incomes
- America's Federal Minimum Wage
- $7.25 per hour (last changed in 2009)
- California Minimum Wage
- $16.50 per hour
- Emeryville Minimum Wage
- $19.90 per hour
- America's Effective Minimum Wage
- Around $12 per hour
- New York Proposed Minimum Wage
- $30 by 2030