Tuesday 25 November 2014

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As well as the light they shed on national industrial relations systems minimum wages are of interest in themselves. Although as well see the proportion of the total national workforce paid at the minimum wage rate varies considerably between countries as does the value of the minimum wage as a proportion of average pay the differences between absolute minimum wage rates at least provides an indication of the scale of differences in wage level and labor costs and at the centre of debates involving social partners policy-makers and researchers. Significant issues include whether minimum wages reduce employment opportunities and price low- skilled workers out of jobs.

 Provide effective protection for those at the bottom of the labor market especially for those in low- pay sectors where women are often over- represented, have a redistributive effect, or serve as a genuine anti- poverty tool with debate for example over whether this aim is undermined if many minimum wage beneficiaries are not in low- pay households. All these debates are ongoing although it is beyond the scope of this report to deal with them in any detail.
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This article provides a factual description of the main points of minimum wage- setting systems in Europe, Japan, the USA, China and Brazil and examines the current absolute and relative levels of minimum wages before looking at the views of the social partners on the issue. Over three- quarters of the 32 countries examined have what can be broadly described as a statutory minimum wage system with national application. These are States the two EU acceding countries Bulgaria and Romaina. In the remaining eight European countries are the main mechanism used for regulating minimum pay rates see Box 1 below for details.
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Within these broad categories of statutory and bargaining based systems there are a number of distinctions and  statutory- such as Belgium and Greece- the national minimum wage is set by an intersect oral agreement which is given a single national minimum wage rate including all such overall national legal framework set differing rates at the regional or local level. The USA has a national minimum wage rate but most states also set their own rates and when they exceed the national minimum it is these rates that apply- as happens in about a third of cases. It should also be noted that in many of the countries with statutory minimum wages the legal minima are supplemented by minimum rates set in collective agreements.

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