Global inequalities

The Minimum Wage ina Global Context

As the presures of globalization make povvety, justice and development look less likely for many disadvantaged communites, the need for an adeqaute minumum wage becomes stronger and stronger. If Mimimum wages are going to be effective they have to be set in relation to average earnings and it must be set in to relation to wages in other countries. Unless it is set too low it must allieviate poverty. However if the poor are not in regular employmeny then minimum wage is not going to help much. It is also needed where countries do not have a welfare system.

Reducing injustice and Developing the economy

Although some jobs are defined to as deserving less money some people are being paid due to other reasons. Racism, age, phyisical defects, immigrants. When they do get paid a minimum wage they use that money to buy other goods and service form other low paid employees.Thus increasing domestic demand.

Globalization and low pay

In developing countries there are often no minimum wage of labour standards. Japan has moved many mfgs to China. Sdvances int eechnology have allowed resourcing from developing countries. The garment industry has moved from HK, Sinagpore and South Korea to Thailand, Mexico and Indonesia. Part of this move was due to age pressure but also becuase those countries moved in to more value added products.

Many counties have large informal sectors that are not covered by legislation. Small co's or home workers. However, MNC's circumventing low pay can be overstated. Only 15% are employed in Nfg and 80% of wage pressure are factors associated with competition from low wage economies.In Advanced Countries - Increasingly moving to lower paid service industries which are often part time.

Deficiencies in minimum wage systems

Minimum wages should be adjusted often but few countries have legislation that cover any worker. In Luxemborg MW is set high and covers 16% but in Spain it is low and covers 2%. ILO offer lttle guidence on what the veles should be but it should meet the Cost of Living but in most countries it comes no where near that. In Niguragua for intance it is 33% of CoL. Women are most affected by MW legislation and compliance can be a problem. Non-compliance is 54% in Guatemala and 9% in Chile.

Govts are concerned that MW can inpact inflation and reduce employment but they could be offset by higher productivity