Comment by dmm on Optimal Employment · 2011-02-01T16:17:50.341Z · LW · GW

Most American economists would probably say that this is impossible and would inevitably cause wide-spread unemployment

Actually most economists from all over the world would agree that minimum wages do not improve economic conditions. The consensus is that a minimum wage has one of two effects: either it does nothing, because the actual minimum wage determined by the markets are higher, or if the minimum wage determined by the market is lower, it prevents job creation.

Your account in this article suggests that the former situation is the case in Australia now, because you said the minimum wage is $15 but a more typical starting wage is >$18. This was the case too in the US for a long time. When I started working the minimum wage was $5.55 but I started as a fast-food worker at $5.95. The minimum wage was doing nothing.

However, none of this detracts from the excellent opportunities available in Australia.