Minimum Wage and Social Dimensions in Africa

Many countries have introduced minimum wages to improve wages of vulnerable workers, protect workers from unreasonably low wages and promote social justice. While there is near universal application of minimum wages, very little is known about its effectiveness in meeting social justice and equity. The debate on minimum wages has been geared on either its impact on employment or its effects on the poor and vulnerable workers. This study aims to analyse the link between minimum wage and social justice indicators across 15 African countries. The chapter scrutinises the effectiveness of minimum wage policies in alleviating poverty, assessing their role in improving the standard of living of low-wage earners using panel data analysis. The Principal Component Analysis is applied to derive a Social Justice Index for Africa. The results indicate that minimum wage reduces poverty, unemployment and inequality in Africa. On the social side, it is observed that minimum wage increases government spending on education and greenhouse gas emission and at the same time increases life expectancy of the inhabitants. Drawing insights from case studies across African countries, the research contributes to an inclusive understanding of the multifaceted effect of minimum wage on equity and social justice in the African context, providing valuable insights for policymakers.