IDEAS home Printed from https://ideas.repec.org/p/zbw/gluwps/96394.html
   My bibliography  Save this paper

Principles of Minimum Wage Policy - Economics, Institutions and Recommendations

Author

Listed:
  • Herr, Hansjörg
  • Kazandziska, Milka

Abstract

Minimum wage policy supported by a strong social policy is an efficient mechanism against poverty and income erosion of the poorest households. Minimum wage is one of the instruments which can control wage dispersion and in this way reduce income inequality. It can also help to prevent a general decline in the level of nominal wages and deflationary developments. For almost two decades now Japan has been suffering from deflationary tendencies triggered by falling nominal wages and unit-labour costs (Herr/Kazandziska 2010). There is a certain likelihood that the United States, Europe and other OECD countries will fall into a deflationary trap over the next decade, and a minimum wage policy could help to reduce this danger. The purpose of this paper is to discuss the principles of minimum wage policy whereby economic dimensions as well as institutional and political questions are taken into account. In the next section of the paper different theoretical views regarding the question of minimum wages are summarised. We concentrate on the neoclassical and Keynesian paradigm. Then institutional and political questions are discussed. Who sets the minimum wage, how is it determined, how frequently is it adjusted, which criteria are taken into account when deciding about the amount of the minimum wage, etc. Moreover, the connection to wage bargaining and the importance of minimum wages for unions are thoroughly examined.

Suggested Citation

  • Herr, Hansjörg & Kazandziska, Milka, 2011. "Principles of Minimum Wage Policy - Economics, Institutions and Recommendations," GLU Working Papers 11, Global Labour University (GLU).
    • Handle: RePEc:zbw:gluwps:96394
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/96394/1/glu-wp_no-11.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mark B. Stewart, 2004. "The Impact of the Introduction of the U.K. Minimum Wage on the Employment Probabilities of Low-Wage Workers," Journal of the European Economic Association, MIT Press, vol. 2(1), pages 67-97, March.
    2. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    3. Herr, Hansjörg & Kazandziska, Milka & Mahnkopf-Praprotnik, Silke, 2009. "The theoretical debate about minimum wages," GLU Working Papers 6, Global Labour University (GLU).
    4. Hansjörg Herr, 2009. "The labour market in a Keynesian economic regime: theoretical debate and empirical findings," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(5), pages 949-965, September.
    5. Sara Lemos, 2007. "Minimum wage effects across the private and public sectors in Brazil," Journal of Development Studies, Taylor & Francis Journals, vol. 43(4), pages 700-720.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Herr, Hansjörg, & Kazandziska, Milka., 2011. "Principles of minimum wage policy : economics, institutions and recommendations," ILO Working Papers 994624243402676, International Labour Organization.
    2. Pestel, Nico & Bonin, Holger & Isphording, Ingo E. & Gregory, Terry & Caliendo, Marco, 2020. "Auswirkungen des gesetzlichen Mindestlohns auf Beschäftigung und Arbeitslosigkeit," IZA Research Reports 95, Institute of Labor Economics (IZA).
    3. Patrick Belser & Uma Rani, 2015. "Minimum wages and inequality," Chapters, in: Janine Berg (ed.), Labour Markets, Institutions and Inequality, chapter 5, pages 123-146, Edward Elgar Publishing.
    4. Haroon Bhorat & Tara Caetano & Benjamin Jourdan & Ravi Kanbur & Christopher Rooney & Benjamin Stanwix & Ingrid Woolard, 2016. "Investigating the Feasibility of a National Minimum Wage for South Africa," Working Papers 201601, University of Cape Town, Development Policy Research Unit.
    5. Kyota Eguchi, 2010. "Minimum Wages and Trainers' Dilemma," LABOUR, CEIS, vol. 24(2), pages 128-138, June.
    6. Roy E. Bailey & Timothy J. Hatton & Kris Inwood, 2016. "Atmospheric Pollution and Child Health in Late Nineteenth Century Britain," CEH Discussion Papers 052, Centre for Economic History, Research School of Economics, Australian National University.
    7. Möller, Joachim & König, Marion, 2012. "The Effects of Minimum Wages in the German Construction Sector - Reconsidering the Evidence," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62064, Verein für Socialpolitik / German Economic Association.
    8. Kate Rybczynski & Anindya Sen, 2018. "Employment Effects Of The Minimum Wage: Panel Data Evidence From Canadian Provinces," Contemporary Economic Policy, Western Economic Association International, vol. 36(1), pages 116-135, January.
    9. Haroon Bhorat & Ravi Kanbur & Benjamin Stanwix, 2014. "Estimating the Impact of Minimum Wages on Employment, Wages, and Non-Wage Benefits: The Case of Agriculture in South Africa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1402-1419.
    10. Koch, Andreas & Kirchmann, Andrea & Reiner, Marcel & Scheu, Tobias & Boockmann, Bernhard & Bonin, Holger, 2018. "Verhaltensmuster von Betrieben und Beschäftigten im Zuge der Einführung des gesetzlichen Mindestlohns," IZA Research Reports 84, Institute of Labor Economics (IZA).
    11. Peter Dolton & Chiara Rosazza Bondibene & Jonathan Wadsworth, 2012. "Employment, Inequality and the UK National Minimum Wage over the Medium‐Term," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(1), pages 78-106, February.
    12. Mirko Draca & Stephen Machin & John Van Reenen, 2011. "Minimum Wages and Firm Profitability," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 129-151, January.
    13. Joachim Möller, 2012. "Minimum wages in German industries—what does the evidence tell us so far? [Branchenspezifische Mindestlöhne in Deutschland – Was sagt uns die empirische Forschung?]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(3), pages 187-199, December.
    14. Elodie Andrieu & Malgorzata Kuczera, 2023. "Minimum Wage and Skills -Evidence from Job Vacancy Data," Working Papers 034, The Productivity Institute.
    15. Möller, Joachim & König, Marion, 2008. "Mindestlohneffekte des Entsendegesetzes? : eine Mikrodatenanalyse für die deutsche Bauwirtschaft (Minimum wage effects of the worker posting law? : a micro data analysis for the German construction se," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 327-346.
    16. Cristian Valeriu Paun & Radu Nechita & Alexandru Patruti & Mihai Vladimir Topan, 2021. "The Impact of the Minimum Wage on Employment: An EU Panel Data Analysis," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    17. Lei Xu & Yu Zhu, 2023. "Does the employment effect of national minimum wage vary by non‐employment rate? A regression discontinuity approach," Manchester School, University of Manchester, vol. 91(1), pages 18-36, January.
    18. Möller, Joachim & König, Marion, 2008. "Mindestlohneffekte des Entsendegesetzes? : eine Mikrodatenanalyse für die deutsche Bauwirtschaft (Minimum wage effects of the worker posting law? : a micro data analysis for the German construction se," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 327-346.
    19. Sotomayor, Orlando J., 2021. "Can the minimum wage reduce poverty and inequality in the developing world? Evidence from Brazil," World Development, Elsevier, vol. 138(C).
    20. Brian Bell & Stephen Machin, 2018. "Minimum Wages and Firm Value," Journal of Labor Economics, University of Chicago Press, vol. 36(1), pages 159-195.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:gluwps:96394. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://global-labour-university.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.