Edited by Jonathan Michie
Chapter 11: The Minimum Wage in a Global Context
Peter Brosnan A majority of countries have minimum wage laws. Convention 26, the principal ILO convention on minimum wages, has one of the highest ratifications by national governments. While it is easy to think of these minimum wage systems solely as arrangements for promoting some degree of fairness in national labour markets, the reality is much more complex. The ILO adopted Convention 26 in 1928, with two aims: on the one hand, to provide wages that were fair to the worker and reduced the risk of poverty, and on the other hand, to make international trade fair by preventing economic dumping whereby a country used low wages to gain a cost advantage in trade. Now minimum wage systems are used by governments for many purposes and their roles are challenged by globalisation in both developing countries and the advanced countries. Today about 175 countries have some form of minimum wage. A minimum wage tends to be a correlate of economic development. Minimum wage systems are less common in very small countries such as the micro-states of Oceania and in less developed regions. Despite the truth of this generalisation, minimum wage legislation is most common in Africa where 48 out of the 57 countries have a minimum wage; on the other hand, the rates prescribed in Africa are generally very low. Europe also has a large proportion of countries with statutory minimum wages, but advanced countries such as Italy, Germany and Norway have no statutory minima. They have an extensive collective...
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