Project in Economics of Public Policy. The introduction of a national minimum wage is increasingly debated in many countries in Europe: Germany has approved the introduction of a national minimum wage in July. Italy has been debating this for some years now. Other countries have already introduced it sometime ago, including the UK in 1999.
A newly appointed Minister for Work and Pensions, with no knowledge on this subject, will be meeting her counterparts at a EU summit, where she has been asked to brief them on the UK experience so far. The Minister has asked you to:
Clarify what is the economic rationale behind the introduction of the minimum wage? What are the economic theories in favour and against the introduction of the minimum wage?
What evaluation can be made of the UK experience?
What conclusions would you draw on the introduction of the minimum wage and lessons for other countries?.