The minimum wage policy is mainly
characterized by six features: the objectives
which are being pursued, the fi xing
method (who decides on the minimum
wage policy and whether social partners
and other bodies are consulted), the coverage
of the minimum wage (who is entitled to receive at least the minimum wage as
pay), the criteria used to introduce/adjust
the value of the minimum wage, the level
of the minimum wage and the mechanisms
in place to ensure compliance.
If the objective of minimum wage fi xing
is to reduce poverty, how should the
policy be designed? It should minimize
negative effects on prices and employment
and benefi t low-paid workers.
The fi xing method should involve consultation
of employers, trade unions and
representatives from the informal economy.
Involving the informal economy in
the determination of the minimum wage
might also address the non-income aspect
of poverty, which is the lack of a say and
of representation