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3 August, 2018 00:00 00 AM

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Consensus needed for national minimum wage

Legislation on the minimum wage now exists in many countries, although the laws vary widely
Taslim Ahammad
Consensus needed for national minimum wage

Collective bargaining can be a means to set minimum wages. In most countries, the coverage of collective bargaining is sufficient to provide protection of minimum standards to a broad majority of workers. Therefore, in many countries, governments have adopted statutory minimum wages through collective agreements.

Minimum wage: Minimum wage established by collective bargaining or by government regulation that specifies the lowest rate at which work can be used. A minimum wage is the lowest hourly wage that can be paid to a worker, as ordered by the country's legislation. The minimum wage is a price level established by law in hourly wages, below which non-exempt workers cannot be offered or accept a job. The main purpose of the minimum wage was to stabilize protect workers in the labour force. The minimum wage was designed to create a minimum standard of living to protect the health and well-being of employees.

Minimum wage laws were first used in Australia and New Zealand in the 1890s, attempt to raise the income of unskilled workers. In 1909 Great Britain established trade boards to set minimum  wage rates in certain trades and industries. Nowadays, most modern developed economies and many underdeveloped economies enforce a national minimum wage. Legislation on the minimum wage now exists in many countries, although the laws vary widely. For example, in the United States, the vast majority of individual states have minimum wage legislation in addition to an established federal minimum wage. In the European Union, most of the member states have national minimum wages; those who do not depend on unions and employer groups to establish minimum profits through the collective bargaining process. The minimum wage rate in Argentina is established through the collective agreement of the national council for employment, productivity and minimum adjustable minimum wages, which includes an equal number of government, employer and worker representatives. However, despite different legislations, minimum wage rates are generally set at levels higher than the average in developing countries, compared to developed countries and the European Union.

Countries that differ from this trend include those of the commonwealth of independent states and south-eastern Europe.

Supporters of minimum wage laws maintain that they improve the work ethic and increase the standard of living of workers and protect workers against exploitation at the hands of their employers. Opponents argue that minimum wage laws hurt small businesses that cannot absorb the higher payroll costs, increase unemployment by forcing employers to reduce hiring. Existing or proposed alternatives to minimum wage laws include earned income tax credit programmes, which help low-wage workers reduce taxes and tax refunds, and an unconditional social security system known as basic income, which periodically provides citizens with a lump sum of money.

Several groups of people are exempt from receiving the minimum wage. Sadly, people who belong to these groups are generally paid below to the minimum wage to encourage companies to hire them. In order for the minimum wage to be effective, consultations must take place in a context of open social dialogue and be held before public authorities make decisions.

At statutory minimum wages, governments should make every effort to ensure full concentration and, as far as possible, the direct participation, under equal conditions, of the social partners in the establishment and operation of labour market national minimum wage systems.

The writer is Assistant Professor, Bangabandhu Sheikh Mujibur Rahman Science and Technology University, Gopalganj, Bangladesh.

taslim.ahammad@gmail.com

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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