Minimum Wage

In which Rat has no regrets

The commonly held view that «any increase in the minimum wage will just feed into increasing consumer prices», while generally true, isn’t quite accurate. Due to lower elasticity of supply, rents respond first; they also seem to correlate better, at least that’s what we’re observing in our backwoods of Eastern Europe, where minimum livable rent has more than doubled over the last ten years. It’s not really janitors and street cleaners who benefit from minimum wage increases.