Abstract: Almost every country has a minimum wage. The details vary: some countries, such as France, fix a universal minimum across the economy, while others, such as New Zealand and South Africa, differentiate between sectors and types of workers. Typically, the minimum wage is set by the government and revised periodically in consultation with business and labor organizations. Minimum wages have been justified on moral, social, and economic grounds. But the overarching objective is to boost incomes and improve the welfare of workers at the low end of the ladder, while also reducing inequality and promoting social inclusiveness. Critics counter that rather than improving welfare, minimum wages are counterproductive because they disrupt the market for labor. They argue that there are other, better-targeted, and less distortionary ways to provide social assistance.
Abstract: This article summarises the arguments in favour of an EU initiative on minimum wages and highlights the steps that have been taken so far, focusing, in particular, on the First Stage consultation document prepared by the European Commission. Based on this consultation document and previous proposals, this article assesses some of the issues related to promoting an EU target minimum wage as a percentage of a national reference wage. Focusing on the adequacy of minimum wages for workers and their families, this article highlights first, the impact rather technical issues relating to the definition of the reference wage may have, and second, the importance of considering the interaction of the minimum wage with the broader tax benefit system in ensuring adequate in-work incomes. Whereas an EU initiative on minimum wages certainly has merit, these two caveats illustrate the need for a clear definition of what one wants to achieve by this initiative, and indicate that specific goals will require additional accompanying measures, such as a further monitoring of the net incomes of minimum wage earners.
Abstract: Nordic trade unions are known to be sceptical of statutory minimum wages. The peak level organizations are generally against legislation, as they believe that their model of bargaining is preferable. In contrast, trade unions in many other parts of Europe find it necessary with statutory minimum wages to protect all workers and not just the unionized. Legislation can also be considered a way of preventing wage dumping and avoiding poverty. This article explores the attitudes among Nordic trade unions below the central/confederate level. The empirical basis is a survey of a large number of organizations in the five countries. The data show a great deal of scepticism towards statutory minimum wages, but some responding organizations recognize certain benefits. It is concluded that Swedish unions are most sceptical of the possible advantages of legislation, whereas in regard to attributed disadvantages Norwegian but also Danish unions are most inclined to agree. Type of industry and size of the organization are other factors with some impact on attitudes towards statutory minimum wages.
- The Minimum Wage as a Matter of Tangible Human Dignity: A Comparative Constitutional Law Analysis; Isabelle Martin, Maude Choko; International Journal of Comparative Labour Law and Industrial Relations; Volume 34; Issue 3; 2018; pp. 231–255
Abstract: The right to human dignity has been applied to numerous employment issues: loss of reputation, privacy, sexual and psychological harassment.Human dignity has less often been invoked in litigation involving tangible working conditions such as the minimum wage. These questions have traditionally been dealt with by employment legislation rather than human rights law. This article argues that minimum wage issues are also a matter of human dignity. In this respect, the adequacy and sufficiency of minimum wage regulations could be assessed in the light of the right to human dignity. In particular, we will examine minimum wage regulations in Quebec (Canada) with regard to the right to human dignity as laid down in the Quebec Charter of Human Rights and Freedoms. In order to substantiate the relationship between the minimum wage and human dignity, we intend to make use of comparative constitutional law. We will draw on the interpretation and application of human dignity developed in international law as well as in four jurisdictions: Quebec, Canada, Israel and Germany. Although Quebec and Canadian case law has applied human dignity to work issues, they have not developed its application to tangible working conditions. By comparison, international law, together with Israeli and German law, have developed the tangible dimension of dignity more extensively. These sources of law may help address the lack of attention on the part of the Quebec courts to the tangible dimension of dignity at work. We then turn to the Quebec minimum wage regulations to evaluate their sufficiency and adequacy in the light of the right to human dignity
- Youth Minimum Wages and Youth Employment; M. Marimpi, P. Koning; IZA Journal of Labor Policy; 2018/7
Abstract: This paper performs a cross-country level analysis on the impact of the level of specific youth minimum wages on the labor market performance of young individuals. We use information on the use and level of youth minimum wages, as compared to the level of adult minimum wages as well as to the median wage (i.e., the Kaitz index). We complement these data with variables on the employment, labor force participation, and unemployment rates of 5-year age interval categories—all derived from the official OECD database. We distinguish between countries without minimum wages, countries with uniform minimum wages for all age groups, and countries with separate youth and adult minimum wages. Our results indicate that the relative employment rates of young individuals below the age of 25—as compared to the older workers—in countries with youth minimum wages are close to those in countries without minimum wages at all. Turning to the smaller sample of countries with minimum wages, increases in the level of (youth) minimum wages exert a substantial negative impact on the employment rate for young individuals.
Abstract: This paper estimates the youth employment effects of minimum wages in the Visegrad countries: Czechia, Hungary, Poland, and Slovakia. The analyses are based on a regional panel dataset for the period 2003-16. Our results indicate that changes in minimum wages measured as a ratio of regional average wages have not negatively affected youth employment rates in the Visegrad countries at the national level. Detailed analyses indicate that changes in the ratio of minimum to average wages may have dampened regional youth employment in Hungary in 2008-11, in Czechia in 2003-7, and in several regions in Poland and Slovakia throughout the full sample period.
Abstract: We estimate the impact of youth minimum wages on youth employment by exploiting a large discontinuity in Danish minimum wage rules at age 18, using monthly payroll records for the Danish population. The hourly wage jumps by 40% at the discontinuity. Employment falls by 33%, and total input of hours decreases by 45%, leaving the aggregate wage payment almost unchanged. We show theoretically how the discontinuity may be exploited to evaluate policy changes. The relevant elasticity for evaluating the effect on youth employment of changes in their minimum wage is in the range 0.6 to 1.1.
- Is a Minimum Wage an Appropriate Instrument for Redistribution?; Aart Gerritsen, Bas Jacobs; Economica; 18 September 2019
Abstract: We analyse the redistributional (dis)advantages of a minimum wage over income taxation in competitive labour markets without imposing assumptions on the (in)efficiency of labour rationing. Compared to a distributionally equivalent tax change, a minimum‐wage increase raises involuntary unemployment, but also raises skill formation as some individuals avoid unemployment. A minimum wage is an appropriate instrument for redistribution if and only if the public revenue gains from additional skill formation outweigh both the public revenue losses from additional unemployment and the utility losses of inefficient labour rationing. We show that this critically depends on how labour rationing is distributed among workers. A necessary condition for the desirability of a minimum‐wage increase is that the public revenue gains from higher skill formation outweigh the revenue losses from higher unemployment. We write this condition in terms of measurable sufficient statistics.
- Employment Gains from Minimum-Wage Hikes under Perfect Competition: A Simple General-Equilibrium Analysis; Richard A. Brecher, Till Gross; Review of International Economics; Volume 26; Issue 1; February 2018; pp. 165-70
Abstract: Contrary to conventional wisdom, higher minimum wages may lead to greater levels of employment under perfect competition. We demonstrate this possibility in a simple general-equilibrium model of involuntary unemployment, with two goods produced by two factors and consumed by two representative households. Within our model, hiking a minimum wage redistributes income between heterogeneous consumers. This redistribution may create an excess demand for the labor-intensive good, and hence increase total employment to restore equilibrium, despite the fact that every firm becomes less labor intensive.
Abstract: We document two new findings about the industry-level response to minimum wage hikes. First, restaurant exit and entry both rise following a hike. Second, there is no change in employment among continuing restaurants. We develop a model of industry dynamics based on putty-clay technology that is consistent with these findings. In the model, continuing restaurants cannot change employment, and thus industry-level adjustment occurs gradually through exit of labor-intensive restaurants and entry of capital-intensive restaurants. Interestingly, the putty-clay model matches the small estimated short-run disemployment effect of the minimum wage found in other studies, but produces a larger long-run disemployment effect.
Abstract: The authors evaluate the exemption of long-term unemployed job seekers from Germany's national minimum wage. Using linked survey and administrative micro data, they rely on a regression discontinuity design to identify the effects of the policy by comparing hiring rates, employment stability, and entry wages around the administrative threshold between short-term and long-term unemployment. They find that the exemption is very rarely used and that the minimum wage binds irrespective of past unemployment duration. While the minimum wage led to a relative rise in entry wages for the long-term unemployed compared to the short-term unemployed, the authors do not detect a relative deterioration in their employment prospects.
- Mindestlohnbeschäftigte: Dienstleister für den privaten Konsum oder Teilhaber am Exporterfolg?; H. Brautzsch, B. Schultz; Wirtschaftsdienst; Volume 99; 2019; pp. 76–78
Abstract: Im Jahr 2014 waren mehr als 38 Mio. Personen in Deutschland als Arbeitnehmer beschäftigt. Sie produzier-ten vor allem Güter für den Konsum, für Investitionen in Ausrüstungen und Bauten sowie den Export, aber auch Vorleistungsgüter, die als Bestandteil der Wertschöp-fungsketten indirekt in deren Entstehung eingingen. Hier ist wirtschafts- und lohnpolitisch interessant, in welchen quantitativen Verhältnissen der Einsatz der Beschäftigten in der Vorleistungsgüterproduktion zur Endverwendung im Wirtschaftskreislauf steht. Dieses Interesse richtet sich nicht nur auf die Personenzahl, sondern im Besonderen auch auf deren Entlohnung. Ein Augenmerk liegt dabei bei den Beschäftigten, deren Löhne 2014 dem Mindestlohn 2015 (8,50 Euro) entsprachen.
- Mindestlohn-Umgehungen fordern Kontrollbehörden und Politik heraus; T. Pusch; Wirtschaftsdienst; Volume 99; 2019; pp. 483–489
Abstract: Seit der Einführung des gesetzlichen Mindestlohns erhalten Berichte zu dessen Umsetzung und Einhaltung eine hohe Aufmerksamkeit. Bisher erschienene Studien zeigten dabei kein eindeutiges Bild über den Umfang der Mindestlohn-Umgehungen. Im vorliegenden Beitrag werden die Gründe für die teilweise sehr unterschiedlichen Ergebnisse herausgearbeitet. Neue Daten der Verdiensterhebung und zusätzliche Auswertungen mit dem SOEP-Datensatz zeigen, dass die Umgehungen nach der ersten Erhöhung des gesetzlichen Mindestlohns Anfang 2017 wieder zugenommen haben. Das Beispiel Großbritannien macht deutlich, dass es Möglichkeiten gibt, den Mindestlohn besser einzuhalten.
- La revendication du Living Wage : renouveau militant, négociation collective ou responsabilité sociale des entreprises ? Jacques Freyssinet; Chronique Internationale de l'IRES; N° 166; 2019/2
Résumé : La revendication d’un Living Wage, un « salaire pour vivre décemment », resurgit au Royaume-Uni au début des années 2000. D’abord portée à la base par des mouvements sociaux, la campagne prend des formes militantes. Une seconde démarche se juxtaposera, celle d’un travail de conviction mené par de grandes institutions pour obtenir des employeurs la mise en œuvre volontaire du Living Wage. La combinaison des deux démarches est source de tensions entre les organisations de la société civile et le mouvement syndical.
- D’un siècle à l’autre : salaire minimum, science économique et débat public aux États-Unis, en France et au Royaume-Uni (1890-2015); Jérôme Gautié; Revue économique; Volume 69; Issue 1; 2018; pp. 67-109
Résumé: Cet article retrace les débats économiques autour du salaire minimum depuis la fin du xixe siècle aux États-Unis, en France et au Royaume-Uni (et son Commonwealth), dans leurs dimensions empiriques et théoriques, mais aussi méthodologiques et épistémologiques. L’analyse intègre aussi une approche de sociologie historique des sciences, visant à recontextualiser ces débats en fonction des modes d’articulation de la sphère académique à trois autres sphères : la sphère politique, la sphère administrative et la sphère de la société civile et du monde économique et social. Trois périodes sont distinguées : autour de la première guerre mondiale, des années 1940 aux années 1980, et depuis le début des années 1990.
