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Fixing minimum wage levels in developing countries: Common failures and remedies
Author(s) -
SAGET Catherine
Publication year - 2008
Publication title -
international labour review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.433
H-Index - 46
eISSN - 1564-913X
pISSN - 0020-7780
DOI - 10.1111/j.1564-913x.2008.00022.x
Subject(s) - minimum wage , developing country , negotiation , collective bargaining , economics , constraint (computer aided design) , labour economics , efficiency wage , wage , deflation , developed country , set (abstract data type) , economic growth , macroeconomics , political science , law , sociology , computer science , engineering , mechanical engineering , monetary policy , population , demography , programming language
. Some developing countries have set their minimum wages too high or too low to constitute a meaningful constraint on employers. The article compares minimum wages worldwide, proposes several ways of measuring them in developing countries and discusses whether they are effective thresholds in those countries. The second part of the article considers the institutional factors leading countries to set minimum wages at extreme levels. The author concludes that the minimum wage is used as a policy instrument to several ends – wage negotiation, deflation and social dialogue – which results in the absence of a wage floor, weak collective bargaining, or non‐compliance.