The Nobel Prize in Economics contrasts Paulo Geddes on minimum wages and unemployment

Canadian economist David Card, one of the three winners of Nobel Prize in EconomicsIt was announced on Monday (11/10), in his study that increasing the minimum wage does not always lead to unemployment growth, contrary to the statements of the Minister of Economy, Paulo Geddes.

Guedes advocates that readjusting the minimum wage could lead to mass layoffs. At least twice since joining the government, the minister has defended a theory that was refuted by the Nobel Prize winner in economics.

In December 2019, during the press conference, Guedes said his salary policy does not advocate a minimum wage adjustment because it could lead to layoffs.

When asked if I have a salary policy, I say: What do you want? That I announce minimum wages for the next three or four years, saying that it will increase a lot in real terms? “If I did this today, I could be a catalyst for mass unemployment,” he said in a newspaper interview.

In September 2020, the minister blamed the crisis exacerbated by the pandemic for not increasing the minimum wage.

“The epidemic is having a devastating effect on employment. So today, if we give at least a real raise, maybe millions of people will be laid off. We are in the midst of a terrible employment crisis, and everyone is out of work. If we give that raise, We will condemn people to unemploymentGuedes said.

NS Nobel Prize Winner in Economics He focused his studies among young people and workers in a fast food chain. His research revealed that the increase in the minimum wage did no harm, but it may have boosted job growth in the studied area.

In one of his major works, “Myth and Measure: The New Economy of Minimum Wage” in Portuguese, Card offers a detailed investigation of the effects of the minimum wage adjustment on unemployment and poverty.

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