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The Productivity‐Enhancing Impacts of the Minimum Wage: Lessons from Denmark and New Zealand
Author(s) -
McLaughlin Colm
Publication year - 2009
Publication title -
british journal of industrial relations
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.665
H-Index - 70
eISSN - 1467-8543
pISSN - 0007-1080
DOI - 10.1111/j.1467-8543.2009.00726.x
Subject(s) - productivity , legislation , minimum wage , shock (circulatory) , perspective (graphical) , labour economics , collective bargaining , efficiency wage , economics , wage , wage bargaining , business , economic growth , political science , law , medicine , artificial intelligence , computer science
This article adds an international comparative perspective to the reflection on 100 years of minimum wage legislation in Britain by exploring the impact of minimum wage regulations and institutions in Denmark and New Zealand. In particular, it looks at the question of whether minimum wages can raise productivity through the ‘shock effect’. It argues that while they will play a role, a supportive institutional framework is more important in providing coordinated solutions to issues of market failure, such as inadequate levels of training. The article suggests that sectoral bargaining institutions in low‐paid sectors may have the potential to facilitate such coordination and enable the high‐productivity model to emerge.