The Organization for Economic Co-operation and Development (OECD) considers this important. Taking the inflation rate into account when raising prices minimum wage While citing several academic “articles” that think such an increase has some implications, each country’s limited adverse effects.
“As inflation reaches levels not seen in most OECD countries in the last four decades and disproportionately affects the lowest-income and most vulnerable households, the minimum wage could become an even more important tool for maintaining the living standards of low-wage workers, while keeping public finances and inflation under control,” the agency explained in a report released this Friday.
In this sense, the OECD has “cited” agrowing consensus“Among policy makers and academics, at current levels in most OECD countries, minimum wage increases, even large ones, have positive effects on lower incomes and little or no negative impact on employment.
One-sided power of companies
Likewise, the OECD considers that arguments for raising minimum wages where they are too low, or for introducing minimum wages where they are not, are gaining strength in light of the fact that there is increasing evidence of monopsony cases. This term, which has been used by the OECD for several months, refers to the current situation. companies have “unilateral” power to set wages and they use it to reduce wages and employment below levels that would be found in a competitive market.
On the other hand, the ‘think tank’ of developed countries included another academic ‘article’ stating that the contribution of minimum wages to general wage increase is ‘limited’ and therefore the increases have almost no effect. inflation.
Thus, in the UK labor market, where 5% of workers work for the minimum wage (a similar ratio to Spain, according to OECD data), a 20% increase would only result in a 0.2% increase in inflation.
In any case, the OECD recommended assess social and economic impacts “carefully” raising minimum wages and consulting with social organizations and other interested parties about the possibility of increased impacts.