Minimum Wages and Social Policy: Lessons from Developing Countries

By Wendy V. Cunningham | Go to book overview

CHAPTER 7
The International Community:
Lessons from Their Experiences

Heterogeneity in minimum wage institutions is not limited to LAC. Across the world, the number of minimum wages, coverage, minimum wage-setting mechanisms, and enforcement mechanisms differ. For example, Italy and Germany have hundreds of “minimum wages,” which are negotiated and enforced by unions under a strong contract law framework. Australia’s former system, which had hundreds of minimum wages, was part of a larger labor “awards system” that specified all remuneration for job types by states. In the United States, the federal minimum wage may be increased by the state minimum wage: state inspectors are responsible for enforcement. In Japan, each prefecture has its own minimum wage, which is recommended by a council composed of public interest groups, worker representatives, and employer representatives.

Although this report has shown that among a small group of countries, the net benefit of the minimum on household poverty in LAC is zero or negative, improving the design and complementing it with other social protection mechanisms perhaps can render the minimum wage a useful social protection tool. The diverse institutions in other regions of the world may offer clues to institutional designs that could improve the effectiveness of Latin America’s minimum wage institutions. This chapter

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