Minimum Wages Case Analysis

TITLE: Minimum Wages Case Analysis
SUBJECT:
STUDENT NAME:
UNIVERSITY:

Introduction:...............................................................................................................................................2
Minimum Wages Definition.........................................................................................................................2
Arguments for Minimum Wages.................................................................................................................3
 Encourages Workers:.......................................................................................................................3
 Social Stability:.................................................................................................................................3
 Protection of workers:.....................................................................................................................4
 Provides Incentives:.........................................................................................................................4
 Stimulates consumption:.................................................................................................................4
 Administrative Ease:........................................................................................................................4
 Increases standard of living:............................................................................................................4
Arguments against Minimum Wages...........................................................................................................4
 Only employer decides minimum wages:........................................................................................5
 Causes unemployment:...................................................................................................................5
 Does not improve living standard in actual sense:..........................................................................5
 Paying wages does not causes employment opportunities:............................................................5
 Discourages people for higher education:.......................................................................................5
 Hurts small businesses:....................................................................................................................6
Country Case Study.....................................................................................................................................6
How Minimum wages was implemented in Malaysia..............................................................................6
Benefits of Minimum Wages System in Malaysia....................................................................................6
Disadvantages of implementation of minimum wage system in Malaysia..............................................7
Conclusion...................................................................................................................................................7

Introduction:
Food, clothing and shelter are the minimum requirements for the survival of a living being and to
be able to get access to these requirements, it is essential for him to earn a minimum living for
himself. This minimum living which is important for the basic survival of a person is known as
the minimum wage. The purpose of this paper is to explain in detail the meaning of minimum
wages, and the arguments for and against these minimum wages. Further, the example of
Malaysia has been discussed which has implemented this system of wage payment along with
the implications of it for that country.
Minimum Wages Definition
According to the International Labor Organization, the minimum wage has been described as
“The minimum amount of wage or salary that is must for an employer to pay for the work
performed by an employee in the given period; and which cannot be reduced by any collective
agreement or argument”1. Minimum wages, as the name suggests, is the minimum requirement of
the wage to be paid to any worker who has performed his work and was promised a sum against
it. This minimum wage has been pre – decided and may vary from country to country keeping in
mind the general economic conditions of the country and the basic standard of living of the
people. The purpose of this minimum wage is to ensure that no person who is willing and able to
work to earn his living, has to suffer on account of unjust and unduly low wages. It is to protect
them against the atrocities of this world that we live in and to give them an equitable share of the
profit which they have contributed to. The fixation of this wage also helps in reducing income
inequalities in the society and bridging the gap between the haves and the have-nots. The
minimum wage in a country is normally fixed by the government, or a wage council, a wage
board, or any such statutory authority which has been formed for this purpose. The basic need of
this wage fixation is to set a guarantee floor below which no worker will be paid. Generally,
what is included in the minimum wages varies – overtime, any premium pay rates, etc. are
included but any benefits such as car expenses, meals, and employer’s contribution to the
pension fund are not included2.
1.Ahmat, N. (2018). Impact of implementing National Minimum Wage on the Malaysian hotel Employees.
2. Institute for Democracy and Economic Affairs. (2019). Minimum wage increases ‘could result in Malaysian job
losses