The Global Minimum Wage Assignment (pdf)

Running head: THE GLOBAL MINIMUM WAGE PROBLEM
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The Global Minimum Wage Problem
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Running head: THE GLOBAL MINIMUM WAGE PROBLEM
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Introduction
Global societal problems are challenges facing people all over the world. These
glitches cannot be addressed by any institution or government acting alone instead
cooperative action of corporations, international organizations, universities,
governments, creative individuals and NGOs is required Stigler, G. (1946). One of
the most noteworthy global societal problem is the minimum wage bill, this is the
lowermost pay allowed by a special agreement or by law. Every government in the
globe has their own set minimum wage, for example in the United States the
minimum salary set by the Federal government for covered nonexempt personnel is
$7.25 every hour, these provisions are found in the (FLSA) Fair Labor Standards Act
set by local laws, state laws and the US labor law. The United Kingdom (UK) set its
National Living Wage based on age as £7.83 per hour for those who are 25 years
and above, £5.90 for 20 and below and £7.38 for 21–24. In Africa, South Africa set
its minimum wage at ZAR 3,500 per month Dube, A. (2010). The minimum wage
remains a topic of political and theoretical controversy. It should be set at a
moderate level so as to help low income workers and their families improve their
living standards as well as ensuring that they are not priced out of employment.
Background
Most countries have experienced the challenge of the procedures to use in setting
the minimum wage bill and the problem of the efficiency of the set minimum wage
policy. The challenge in setting the minimum wage is as a result of trying to make it
sufficient to assure low income earners socially putative living standards and on the
other hand not too high to prevent low productivity workers from being priced out of
employment Card, B. (1995). The globe lacks a universal rule on the correct level of
minimum salary as it depends on specific country influences such as occupations,
industries difference in worker output across regions and labor market conditions.
There are two mechanisms used in establishing the minimum wage comprising
collective negotiations and being set but the government in consultation with other
stakeholders such as employers and trade unions. However, these methods are
ineffective most of the time thus posing a problem to the globe. The minimum wage
bill hardly reduces poverty but it decreases earning inequalities. All over the globe
many workers are struggling with little remuneration making their living standards
low. These billions of employees exploited by their employers by being under
payed need protection from their governments and other organizations.
Minimum Wage Effects
The issue of minimum wage affects many worker groups in relation to employment
in the sense that high minimum wages decrease employment levels among low
income workers significantly and low minimum wage increases employment rates.
Income inequalities are minimized by standardization of the minimum wage,
increase in the minimum wage leads to higher remuneration for low income earners

Running head: THE GLOBAL MINIMUM WAGE PROBLEM
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thus reducing the gap between them and high-income earners. Minimum wages
effects on poverty are limited since poor people in most societies are not employed.
Minimum wage increase can push some poor families into poverty and at the same
time it can save some from poverty. This is in the sense that at the increase of the
minimum wage some non-poor family workers may lose employment at the same
time workers from poor families get an increase in salary Brown, C. (1982).
The minimum wage bill should be kept at a moderate level so as not to price low
productivity workers out of employment and to ensure good living standards for low
paid workers. It should be used as a tool to guarantee fair resource distribution.
The level of wage policy compliance in most global nations is low, in sub-Saharan
Africa (SSA) the level of minimum wage is affected by GDP per capita, the minimum
wage comparative to mean wage is higher in low income countries as compared to
higher income countries Dube, A. (2010). In SSA increase in minimum wage leads to
job losses since employers cannot be able to sustain paying a high number of
employees. However, modest adjustments of wages have a highly probable positive
effect since its sustainable for most employers and beneficial to all employees. Sub-
Saharan countries have set up policies to protect vulnerable employees from
extreme levels of low pay
Statistical Data
Most countries in the globe use the standards of region, industry, age, occupation,
and job tenure to vary minimum wage bill. The table below summarizes some of the
countries and their consideration in relation to minimum wage bill:
Country minimum wage determinant Country
Occupation Ireland, Finland, Greece, Sweden
Region Germany, Ireland, Austria, Finland, USA
Age USA, Portugal, Sweden, Spain, Austria,
Finland, Denmark, Italy, Netherlands,
Ireland, Norway, Luxembourg,
Switzerland, Belgium, France, South
Africa, Kenya, Mozambique, Russia
Industry Denmark, Italy, Portugal, Finland,
Switzerland, Sweden, Austria, Norway
Job tenure Ireland, Greece, Belgium, Sweden,
Norway, Austria, Italy
In countries like such as Honduras the minimum wage is 60% of the mean wage
while in other nations the minimum wage is below 10% of the mean wage, most
countries fall between these two extremes roughly 20% - 50%. Considering the
above statistical reviews, the global minimum wage can be averaged as follows:
Minimum wage level Average wage percentage
Very high 50% and above

Running head: THE GLOBAL MINIMUM WAGE PROBLEM
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High 40% to 49%
Medium High 30% to 39%
Modest 20% to 29%
Low 20% and below
The shape of the distribution of earnings determines the number of workers
affected by the minimum wage Burkhauser, R. (2000).
United Kingdom (UK)
The data below shows the national minimum wage statistics of the United Kingdom
workers on the basis of age from 1999-2018:
Year Aged 22 and
above
18-21 16-17 Trainee
1999 £3.60 £3.00
2000 £3.60 £3.20
2000 £3.70 £3.20
2001 £4.10 £3.50
2002 £4.20 £3.60
2003 £4.50 £3.80
2004 £4.85 £4.10 £3.00
2005 £5.05 £4.25 £3.00
2006 £5.35 £4.45 £3.30
2007 £5.52 £4.60 £3.40
2008 £5.73 £4.77 £3.53
2009 £5.80 £4.83 £3.57
Year Aged 21 and
above
18-20 16-17 Trainee
2010 £5.93 £4.92 £3.64 £2.50
2011 £6.08 £4.98 £3.68 £2.60
2012 £6.19 £4.98 £3.68 £2.65
2013 £6.31 £5.03 £3.72 £2.68
2014 £6.50 £5.13 £3.79 £2.73
2015 £6.70 £5.30 £3.87 £3.30
Year Aged 25
and above
21-24 18-20 16-17 Trainee