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Adjusting to the national minimum wage: constraints and incentives to change in six low‐paying sectors
Author(s) -
Grimshaw Damian,
Carroll Marilyn
Publication year - 2006
Publication title -
industrial relations journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.525
H-Index - 3
eISSN - 1468-2338
pISSN - 0019-8692
DOI - 10.1111/j.1468-2338.2006.00388.x
Subject(s) - product market , incentive , minimum wage , product (mathematics) , virtuous circle and vicious circle , labour economics , competition (biology) , wage , economics , business , market economy , macroeconomics , ecology , geometry , mathematics , biology
Interest in the national minimum wage (NMW) includes not only its direct impact on employment and wages, but also its indirect impact on organisational performance resulting from a reorientation of employer behaviour with regard to employment practices and product market competition. Drawing on data from small firms in six low‐paying sectors, this article identifies three key constraints that have undermined the possible effect of the NMW in generating a virtuous cycle between employment practices and product market approach. These constraints relate to product market conditions, employer norms and labour market institutions (especially training).