Routledge Dictionary of Economics, Second Edition
The minimum rate of employee remuneration fixed by a government for an hour’s work in a particular industry, region or whole economy. Many countries, including France and Australia, have long used this policy response to the problem of LOW PAY.
Minimum wage legislation was passed in the UK in 1998. It is often argued that the imposition of a new minimum wage, or an increase in existing levels, will have an unemployment effect and will fuel inflation by increasing the entire WAGE CONTOUR; in the figure, setting a minimum wage Wm above the equilibrium wage We reduces employment by Qe−Qm. There are many countries where this has happened but detailed labour market analysis, especially where MONOPSONY is present, is needed before such policies are wholly abandoned.
References
Starr, G. (1981) Minimum Wage Fixing: An International Review of Practices and Problems, Geneva: ILO.
This is the complete article, containing 142 words
(approx. 1 page at 300 words per page).
View More Summaries on Minimum wage
