Edited by Jonathan Michie
Chapter 11: The minimum wage in a global context
A majority of countries have minimum wage laws. Convention 26, the principal International Labour Organization (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 globalization in both developing countries and the advanced countries.
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