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Minimum wage
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==Minimum wage laws== {{quote box | bgcolor = #c6dbf7 | width = 22em | salign = right | quote = "It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country." | source = [[President Franklin D. Roosevelt]], 1933<ref name="NYT-20140307">{{cite news |last=Tritch |first=Teresa |title=F.D.R. Makes the Case for the Minimum Wage |url=https://takingnote.blogs.nytimes.com/2014/03/07/f-d-r-makes-the-case-for-the-minimum-wage/ |date=March 7, 2014 |work=[[New York Times]] |access-date=March 7, 2014 }}</ref><ref>{{Cite web|url=http://docs.fdrlibrary.marist.edu/odnirast.html|title=Franklin Roosevelt's Statement on the National Industrial Recovery Act|date=16 June 1933|website=Franklin D. Roosevelt Presidential Library and Museum Our Documents|access-date=17 March 2018}}</ref> }} The first modern national minimum wages were enacted by the government recognition of unions which in turn established minimum wage policy among their members, as in [[Industrial Conciliation and Arbitration Act 1894|New Zealand in 1894]], followed by [[Australian labour movement|Australia in 1896]] and the [[Trade Boards Act 1909|United Kingdom in 1909]].<ref name=Starr>{{cite book|last=Starr|first=Gerald|title=Minimum wage fixing : an international review of practices and problems|year=1993|publisher=International Labour Office|location=Geneva|isbn=9789221025115|page=1|url=https://books.google.com/books?id=gzurqlZpyfcC&q=the+history+of+%22minimum+wage%22+law&pg=PA1|edition=2nd impression (with corrections)}}</ref> In the United States, statutory minimum wages were first introduced [[Fair Labor Standards Act of 1938|nationally in 1938]],<ref name=DOL>{{cite journal|last=Grossman|first=Jonathan|title=Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum Wage|journal=Monthly Labor Review|year=1978|volume=101|issue=6|pages=22–30|url=http://www.dol.gov/dol/aboutdol/history/flsa1938.htm|publisher=Department of Labor|pmid=10307721|access-date=17 April 2014|url-status=dead|archive-url=https://web.archive.org/web/20140416113027/http://www.dol.gov/dol/aboutdol/history/flsa1938.htm|archive-date=16 April 2014}}</ref> and they were reintroduced and expanded in the [[National Minimum Wage Act 1998|United Kingdom in 1998]].<ref name=Stone>{{cite news|last=Stone|first=Jon|title=History of the UK's minimum wage|url=http://www.totalpolitics.com/blog/28013/history-of-the-uk-s-minimum-wage.thtml|access-date=17 April 2014|newspaper=Total Politics|date=1 October 2010|url-status=dead|archive-url=https://web.archive.org/web/20140114075901/http://www.totalpolitics.com/blog/28013/history-of-the-uk-s-minimum-wage.thtml|archive-date=14 January 2014}}</ref> There is now legislation or binding [[collective bargaining]] regarding minimum wage in more than 90 percent of all countries.<ref>{{cite journal |last1=Williams |first1=Walter E. |date=June 2009 |title=The Best Anti-Poverty Program We Have? |journal=Regulation |volume=32 |issue=2 |page=62 |url=http://www.thefreelibrary.com/The+best+anti-poverty+program+we+have%3F-a0203335454}}</ref><ref name="ILO 2006"/> In the European Union, 21 out of 27 member states currently have national minimum wages.<ref name=":0">{{Cite web|title = Minimum wage statistics – Statistics Explained|url = http://ec.europa.eu/eurostat/statistics-explained/index.php/Minimum_wage_statistics|website = ec.europa.eu|access-date = 12 February 2016|url-status = live|archive-url = https://web.archive.org/web/20160207085307/http://ec.europa.eu/eurostat/statistics-explained/index.php/Minimum_wage_statistics|archive-date = 7 February 2016}}</ref> Other countries, such as Sweden, Finland, Denmark, Switzerland, Austria, and Italy, have no minimum wage laws, but rely on employer groups and trade unions to set minimum earnings through collective bargaining.<ref>Ehrenberg, Ronald G. ''Labor Markets and Integrating National Economies'', Brookings Institution Press (1994), p. 41</ref><ref name="NYT-20141027-LA">{{cite news |last1=Alderman |first1=Liz |last2=Greenhouse |first2=Steven |title=Fast Food in Denmark Serves Something Atypical: Living Wages |url=https://www.nytimes.com/2014/10/28/business/international/living-wages-served-in-denmark-fast-food-restaurants.html |date=27 October 2014 |work=[[The New York Times]] |access-date=27 October 2014 |url-status=live |archive-url=https://web.archive.org/web/20141028002802/http://www.nytimes.com/2014/10/28/business/international/living-wages-served-in-denmark-fast-food-restaurants.html |archive-date=28 October 2014 }}</ref> Minimum wage rates vary greatly across many different jurisdictions, not only in setting a particular amount of money—for example $7.25 per hour ($14,500 per year) under certain US state laws (or $2.13 for employees who receive tips, which is known as the [[Tipped wage in the United States|tipped minimum wage]]), $16.28 per hour in the U.S. state of [[Washington (state)|Washington]],<ref>{{cite web |title=Minimum Wage |url=https://www.lni.wa.gov/workers-rights/wages/minimum-wage/ |url-status=live |archive-url=https://web.archive.org/web/20231023152149/https://www.lni.wa.gov/workers-rights/wages/minimum-wage/ |archive-date=23 October 2023 |access-date=10 November 2023 |website=Minimum Wage |publisher=Washington State Dept. of Labor & Industries}}</ref> or £11.44 (for those aged 21+) in the United Kingdom<ref>{{cite web | url=https://www.gov.uk/national-minimum-wage-rates| title=National Minimum Wage and National Living Wage rates | access-date=31 October 2024 }}</ref>—but also in terms of which pay period (for example Russia and China set monthly minimum wages) or the scope of coverage. Currently the United States federal minimum wage is $7.25 per hour, though most states have a higher minimum wage. However, some states do not have a minimum wage law, such as Louisiana and Tennessee, and other states have minimum wages below the federal minimum wage such as Georgia and Wyoming, although the federal minimum wage is enforced in those states.<ref>{{cite web |title=State Minimum Wage Laws |url=https://www.dol.gov/agencies/whd/minimum-wage/state |publisher=[[U.S. Department of Labor]]}}</ref> Some jurisdictions allow employers to count tips given to their workers as credit towards the minimum wage levels. [[India]] was one of the first developing countries to introduce [[Minimum Wages Act 1948|minimum wage policy]] in its law in 1948. However, it is rarely implemented, even by contractors of government agencies. In [[Mumbai]], as of 2017, the minimum wage was Rs. 348/day.<ref name="tiss2017">{{cite web |title=Interview with Mr. Milind Ranade (Kachra Vahtuk Shramik Sangh Mumbai) |url=http://wastemumbai.tiss.edu/interviews/ |website=TISS Wastelines official website |publisher=Tata Institute of Social Sciences |access-date=20 March 2019 |archive-url=https://web.archive.org/web/20190327101203/http://wastemumbai.tiss.edu/interviews/ |archive-date=27 March 2019 |url-status=dead }}</ref> India also has one of the most complicated systems with more than 1,200 minimum wage rates depending on the geographical region.<ref>{{cite web | url=http://www.paycheck.in/main/salary/minimumwages/minfaqfolder | title=Most Asked Questions about Minimum Wages in India | publisher=PayCheck.in | date=22 February 2013 | access-date=29 March 2013 | url-status=live | archive-url=https://web.archive.org/web/20130403124424/http://www.paycheck.in/main/salary/minimumwages/minfaqfolder | archive-date=3 April 2013 }}</ref><!-- PLEASE ADD ANY REGION-SPECIFIC INFO TO THE MAIN ARTICLE, [[Minimum wage law]]. --> ===Informal minimum wages=== Customs, tight labor markets, and extra-legal pressures from governments or labor unions can each produce a ''de facto'' minimum wage. So can international public opinion, by pressuring [[multinational companies]] to pay [[Third World]] workers wages usually found in more industrialized countries. The latter situation in Southeast Asia and Latin America was publicized in the 2000s, but it existed with companies in West Africa in the middle of the 20th century.<ref name="SowellBasic">{{cite book |last=Sowell |first=Thomas |author-link=Thomas Sowell |year=2004 |chapter=Minimum Wage Laws |chapter-url=https://books.google.com/books?id=ax6dsqMdPHQC&pg=PA163 |pages=163–69 |title=Basic Economics: A Citizen's Guide to the Economy |publisher=Basic Books |location=New York |isbn=978-0-465-08145-5 }}{{Dead link|date=August 2024 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> ===Setting minimum wage=== Among the indicators that might be used to establish an initial minimum wage rate are ones that minimize the loss of jobs while preserving international competitiveness.<ref>{{cite web |title=Provisional Minimum Wage Commission: Preliminary Views on a Bask of Indicators, Other Relevant Considerations and Impact Assessment |publisher=Provisional Minimum Wage Commission, Hong Kong Special Administrative Region Government |url=http://www.labour.gov.hk/eng/rbo/Assessment.pdf |access-date=19 February 2012 |archive-url=https://web.archive.org/web/20120119120419/http://www.labour.gov.hk/eng/rbo/Assessment.pdf |archive-date=19 January 2012 |url-status=dead}}</ref> Among these are general economic conditions as measured by real and nominal gross domestic product; inflation; labor supply and demand; wage levels, distribution and differentials; employment terms; productivity growth; labor costs; business operating costs; the number and trend of bankruptcies; [[Index of Economic Freedom|economic freedom]] rankings; standards of living and the prevailing average wage rate. In the business sector, concerns include the expected increased cost of doing business, threats to profitability, rising levels of unemployment (and subsequent higher government expenditure on welfare benefits raising tax rates), and the possible [[knock-on effect]]s to the wages of more experienced workers who might already be earning the new statutory minimum wage, or slightly more.<ref>''Setting the Initial Statutory Minimum Wage Rate,'' submission to government by the Hong Kong General Chamber of Commerce.</ref> Among workers and their representatives, political considerations weigh in as labor leaders seek to win support by demanding the highest possible rate.<ref>{{cite news|last=Li |first=Joseph |title=Minimum wage legislation for all sectors |work=China Daily |date=16 October 2008 |url=http://www.chinadaily.com.cn/hkedition/2008-10/16/content_7110239.htm |access-date=19 February 2012 |url-status=live |archive-url=https://web.archive.org/web/20110503235232/http://www.chinadaily.com.cn/hkedition/2008-10/16/content_7110239.htm |archive-date=3 May 2011 }}</ref> Other concerns include [[purchasing power]], inflation indexing and standardized working hours. ===Impact of minimum wage on income inequality and poverty=== Minimum wage policies have been debated for their impact on income inequality and poverty levels. Proponents argue that raising the minimum wage can help reduce income disparities, enabling low-income workers to afford basic necessities and contribute to the overall economy. Higher minimum wages may also have a ripple effect, pushing up wages for those earning slightly above the minimum wage.<ref>{{cite journal|last=Card|first=David|title=Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania|journal=The American Economic Review|year=1994|volume=84|issue=4|pages=772–793|url=https://www.jstor.org/stable/2118030|publisher=American Economic Association|jstor=2118030}}</ref> However, opponents contend that minimum wage increases can lead to job losses, particularly for low-skilled and entry-level workers, as businesses may be unable to afford higher labor costs and may respond by cutting jobs or hours.<ref>{{cite journal|last=Neumark|first=David|title=Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research|journal=NBER Working Paper No. 12663|series=Working Paper Series |year=2006|publisher=National Bureau of Economic Research|doi=10.3386/w12663 |url=https://www.nber.org/papers/w12663}}</ref> They also argue that minimum wage increases may not effectively target those living in poverty, as many minimum wage earners are secondary earners in households with higher incomes.<ref>{{cite journal|last=MaCurdy|first=Thomas|title=How Effective Is the Minimum Wage at Supporting the Poor?|journal=Journal of Political Economy|year=2015|volume=123|issue=2|pages=497–545|url=https://www.journals.uchicago.edu/doi/abs/10.1086/679626|publisher=The University of Chicago Press|doi=10.1086/679626|s2cid=154665585 }}</ref> Some studies suggest that targeted income support programs, such as the Earned Income Tax Credit (EITC) in the United States, may be more effective in addressing poverty.<ref>{{cite journal|last=Hotz|first=V. Joseph|title=Examining the Effect of the Earned Income Tax Credit on the Labor Market Participation of Families on Welfare|journal=NBER Working Paper No. 11968|series=Working Paper Series |year=2006|publisher=National Bureau of Economic Research|doi=10.3386/w11968 |url=https://www.nber.org/papers/w11968}}</ref> The effectiveness of minimum wage policies in reducing income inequality and poverty remains a subject of ongoing debate and research.
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