Following announcements of an increase in the National Minimum Wage (NMW), Richard Wellings appeared on BBC Radio Merseyside arguing against the proposal.
Dr Wellings stated that an increase in the minimum wage would cause profits to decrease resulting in less investment and therefore lower productivity. This would mean lower wages in the long run making the policy counter-intuitive. A better approach would be to reduce living costs associated with energy and housing by deregulating.
Dr Wellings went on to argue that a rise in unemployment would accompany an increase in the minimum wage. Basic economics demonstrates that if the price of any good, including labour, is increased, we will witness reduced demand for it.
Listen to the full programme here. Segment begins at 58.23.