The Intelligence from The Economist Wage against the machine: the distortions of minimum pay
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Nov 25, 2025 
Guests include Callum Williams, a Senior economics writer who explores the political implications and economic distortions of minimum-wage policies. Alex Hearn, an AI writer, discusses how AI-generated cover letters saturate the job market, impacting candidate signaling and wage quality. Lastly, Rebecca Jackson, a Southern correspondent, highlights Florida's educational experiments, including micro-schools and homeschooling driven by voucher systems, examining both their potential benefits and uncertainties.
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Minimum Wages Are Rising Globally
- Governments now push much higher minimum wages across rich countries as a deliberate policy choice.
- Employment rates stayed high, so classic fears of mass unemployment did not materialize according to William Zabka.
Higher Pay Can Harm Job Quality
- Higher minimum wages reduce job quality in ways beyond employment levels, like less predictable schedules and worse safety.
- A generous minimum wage plus a weaker welfare state is poor at reducing poverty and inequality, says William Zabka.
Minimum Wage Isn't A Targeted Anti-Poverty Tool
- Many minimum-wage recipients live in relatively well-off households or aren't the poorest households.
- To reduce inequality more effectively, governments should target poor households directly via welfare, not only raise wage floors.