More Minimum Wage Stupidity


In his latest screed against the minimum wage, Mark Perry goes international in an attempt to demonstrate that countries without a minimum wage have lower youth and overall unemployment rates than countries with minimum wages. Hmmm.

Perry’s table is immediately below. Taking a quick look, it would appear that a zero minimum wage is the path to a robust labor market and prosperity – just look at the differential between the upper grouping and the lower grouping.

Case closed, eh?




Here’s the part that Perry overlooked and neglected to mention: While it appears technically true that the bottom eight countries have no “official” minimum wage, they all – every one – employ some manner of collective bargaining agreements to ensure their workers get a fair shake:

Austria: “National collective bargaining agreements”

Denmark: “Negotiated between unions and employer associations”

Finland: “Negotiated between unions and employer associations”

Iceland: “Collectively bargained agreements”

Italy: “Collective bargaining agreements”

Norway: “Negotiated between labor, employers, and local governments”

Sweden: “Independent unions to bargain wages collectively”

Switzerland: “Collective labour agreements”




mark perry international
(Source: List of minimum wages by country)


So, in fact, it would appear that countries with strong pro-labor policies are doing pretty well indeed. Thank you for supporting labor, Professor Perry. Keep fighting the good fight for stronger labor policies. Well done!


UPDATE: 12/17/15 6:11am

As was pointed out in comments, for some strange reason, Germany, Europe’s largest economy was omitted, except for the fact that their Unemployment Rate is at record lows,



Source: Wage Indicator


Also, the way Perry calculated the Unemployment rate was wrong, using total population instead of total labor pool.

Lies, and the lying liars who tell them . . .




Seattle. Chicago. Los Angeles. Min Wage Lies Travel. (November 30th, 2015)

AEI Dissembling Continues Apace on Seattle Min Wage (November 27th, 2015)

Lying About Geography and Minimum Wage (November 21st, 2015)

Dori Monson Flogs Faulty Seattle Min Wage Data (November 5th, 2015)

Dunkin’ Donuts Closures and Min Wage: Nothing to See Here (October 15th, 2015)

Curly Joins Moe & Larry on Seattle Min Wage (September 30th, 2015)

Revisiting Seattle and Its New Minimum Wage (September 23rd, 2015)

On Scaring Minimum Wage Workers (September 10th, 2015)

More Food for Thought on Seattle Minimum Wage (September 1st, 2015)

Minimum Wage Karma in Seattle (August 25th, 2015)

Mark Perry Doesn’t Understand Geography (August 18th, 2015)

Farm-to-Table for Bad Information (August 13th, 2015)

Fact Versus Fiction on Seattle Minimum Wage (August 11th, 2015)

Chipotle Spices Up The Minimum Wage Discussion (July 28th, 2015)

Shifting the Goalposts in Seattle Minimum Wage Debate (June 29th, 2015)

A Pizza Place Closes in Seattle . . . (April 30th, 2015)

Jobless in Seattle? Not Yet, Anyway. Part 2 (April 10th, 2015)

Jobless in Seattle? Not Yet, Anyway. (April 8th, 2015)



What's been said:

Discussions found on the web:
  1. davebarnes commented on Dec 16

    The problem in France is not the minimum wage. It is the CDI for “permanent” employees.
    An employer must move a temp employee to permanent within a year. And with permanency comes the CDI.

    • Expat commented on Dec 18

      Contrat de Durée Indéterminée: an open-ended employment contract. Once an employee is on a CDI he becomes hard to fire and more costly in general terms.

  2. Paul Mathis commented on Dec 16

    Then There Is Germany

    Which for some strange reason was omitted from the list of counties with minimum wages. In fact, Germany has various high minimum wages for different categories of workers:

    And what have these high minimum wages done to unemployment? Curiously, it is far lower than ours:
    4.5% in October 2015.

    Oh, and BTW, Germany is the biggest economy in Europe, by far.

    Looks like the Professor needs to go back to school.

  3. Bill commented on Dec 16

    I especially like how Mark Perry’s average unemployment rate is the average of the individual unemployment rates. Nice math, Mark. Nice math…

    • Bill commented on Dec 16

      I had to run the numbers myself. I don’t know what they use for the denominators, but I just decided to use total population. Not perfect, but better than what passes for math at the AEI.

      Looking only at the total unemployment rate and taking each countries population (wikipedia), multiplying by the unemployment rate to get the number of unemployed in each country (again, not perfect), and then summing those for both groups and dividing by the total populations we get

      with minimum wage: 12.8%
      without minimum wage: 10.1%

      That’s not too bad. Sucks to have Italy dragging down the no minimum wage group.

      And, if you include Germany (and why would you leave out Europe’s largest economy?) they have minimum wage of $9.47 per hour, and unemployment rate of 5% and 81.6 million people. Adding them to team minimum wage you get…

      with minimum wage: 10.7%
      without minimum wage: 10.1%

    • RW commented on Dec 17

      Perry’s work is so sloppy that, even if he is averaging subpopulations with normalized data, I’d bet he isn’t controlling for anomalies like Simpson’s Paradox*; i.e., Germany should have been included of course but Perry’s results could be still be bogus even if he wasn’t pulling the crap Invictus and commenters here point out.

      *NB: Lots of different ways to get paradoxical aggregate statistical results but Simpson’s usually centers around the idea that when subgroups’ series data on a variable are aggregated into a single total, the total might show a relationship that is the reverse of the relationship seen in the subgroup(s). One example I saw awhile back was when the usual suspects were clutching their pearls and mouth breathing because some aggregate SAT and NAEP scores showed a bunch of ‘minority’ schools underperforming (relatively unchanged or down slightly over time) yet when you looked at the subpopulations there was an upward trend in most categories including math.

  4. bonalibro commented on Dec 17

    That’s the free market for you. In theory the prices are supposed to be set at a point that clears the market. So if the labor market isn’t clearing with wages where they are, how will lowering wages help?

  5. Liquidity Trader commented on Dec 17


    German Unemployment Rate Falls to Record Low on Domestic Demand
    December 1, 2015

    Germany’s unemployment rate unexpectedly dropped to a record low in a sign that robust domestic demand is bolstering confidence in the growth prospects for Europe’s largest economy.
    The jobless rate fell to 6.3 percent in November, the lowest level since German reunification, from 6.4 percent the previous month, data from the Federal Labor Agency in Nuremberg showed on Tuesday. The number of people out of work declined a seasonally adjusted 13,000 to 2.77 million. Economists in a Bloomberg survey predicted the rate would remain unchanged and the number of jobless would decline by 5,000.


    • Bill commented on Dec 17

      Thanks, Spencer. I was wondering about that – how to compare apples to apples. Looks like the BLS did the heavy lifting.

  6. Concerned Neighbour commented on Dec 17

    A simple table doesn’t do the topic justice. Econometric work needs to be a big part of the analysis.

    I wish our politicians would stop getting all their economic policy advice from big business and related think tanks. These people invariably argue for what’s right for their businesses, not for the broader economy. Much – if not most – of the time a corporate big wig says something is “good for the economy”, what s/he really means is it’s “good for my business”. And the opposite is true. When an oil company says a carbon tax would be bad for the economy, does he really mean it, or does he mean it would be bad for his business/industry.

  7. DeDude commented on Dec 17

    What AEI and other hack institutions do is that they survey the data for anything that will support their conclusions. They are not scientists in search of the truth they are hacks in search of anything that can “support” their ideology based “reality”. So they look for specific sub-sub-parameters, that when normalized in a specific way, and provided that certain “outliers” (that mess up the conclusion) are eliminated – can support their conclusions.

    But they should be debunked every time they stick their ugly heads up – because we need to make sure that there is a record of how to debunk those claims, when they pop up in public debate.

  8. VennData commented on Dec 17

    But minimum wages increase terrorism! And decrease white male fertility!

  9. formerlawyer commented on Dec 17

    Mr. Perry has “updated” his post to include Germany and references to Europe’s collective agreements with Italy as an example. This is traditional slime-by politics by AEL, make an outrageous claim with ostensible “truthiness”, walk it back when no-one is noticing and even then lie by omission!

  10. Expat commented on Dec 18

    The arguments against minimum wages and unions are typically based on ideology rather than facts. The drive to de-unionize and eliminate wage protection is founded on the desire to increase profits for shareholders (i.e. the 1%).

    Detroit (automakers) did not run into trouble because of unions alone. Management was incompetent and lacked foresight and flexibility. American auto workers remain extremely productive even under “high” union wages. Sending production to China or Mexico is simply a means making the CEO richer to the detriment of US workers. The result is a hollowing out of the US economy. After all, aren’t we supposed to be a consumer-based economy? No wages, no consumers.

    Our dear leaders (economic and political) are burning down the house and roasting our unborn offspring on the flames. I think it’s time to give them a shove into the fire.

  11. DeDude commented on Dec 18

    Exactly – and where are all the other Eurozone countries – and the rest of Europe.

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