MPA students and their prof listed in MacLean's Chartapalooza
Dr. Lindsay Tedds and the 2017 MPA On Campus cohort have contributed a chart and brief article to MacLean’s "The 91 most important economic charts to watch in 2018."
Raising the minimum wage in B.C.
"The B.C. government recently formed the Fair Wages Commission whose task, among other things, is to 'develop recommendations for a pathway forward to raise the minimum wage to $15 an hour….' While economic theory dictates that increases to the minimum wage will cause unemployment and reduced hours, empirical studies as to the observed economic effects of minimum wage increases provide ambiguous results. Combing through the literature suggests two important considerations to minimizing adverse effects of the minimum wage: maintaining the ratio of the minimum wage to average hourly earnings to between 40 to 50 per cent and ensuring that increases to the minimum wage are small, successive, and predictable.
The chart shows the ratio of minimum wage to average hourly earnings in B.C. since 1997. It shows that the ratio has always been in the low part of the 40 to 50 per cent band, or fell even below 40 per cent during minimum wage freezes. The chart also shows that the recent increases in the minimum wage, while bringing the ratio back up to historical levels, were not small. Should the Fair Wages Commission wish to adhere to the two conditions, the minimum wage should rise to $15 no earlier than when average hourly earnings increase to $30 (meaning a ratio of 50 per cent is not exceeded). Assuming average hourly earnings continue their historical course, this sets a predictable path for minimum wage to hit $15 by November 2025. This would translate into annual increases in the minimum wage in the order of 3.8 per cent starting in October 2018, a pace that may be considered too slow for minimum wage advocates. Whether the Fair Wages Commission recommends such a prudent path remains to be seen."