Why governments should stop raising the minimum wage

After a decade of rises, there are now far better tools for fighting poverty

It is easy to see why politicians like raising the minimum wage. Short of cash yet keen to fight inequality, they have seized on a tool of redistribution that costs governments little and wins votes. In its budget on November 26th Britain is likely to raise the minimum wage, which sits at 61% of median income, up from 48% a decade ago. Germany introduced a minimum wage only in 2015; by 2023 it had crossed 50%. And although America’s federal rate of $7.25 an hour has not changed since 2009, many states and cities controlled by Democrats have raised their pay floors far higher. The average effective minimum wage is around $12 per hour; the highest is over $21.

This article appeared in the Leaders section of the print edition under the headline “Time for a pause”

From the November 22nd 2025 edition

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