Amidst heated debates surrounding the minimum wage laws, they remain the most popular welfare tool globally. The monopsonistic character of the labour market calls for a revision of the unemployment concerns. People earning minimum wage in low-income countries are different from those in high-income ones. Given the job polarisation because of the labour-replacing technologies of today, minimum wage policy is still relevant, more so for low-income countries.
The minimum wage law is becoming one of the most popular tools to address concerns regarding inequality and poverty. More than 100 countries have instituted some form of wage floor, and there is renewed impetus to adopt new minimum wage rates or strengthen the existing ones. From 2010 onwards, countries like Cabo Verde, Germany, Malaysia, Surinam, and Qatar have adopted a minimum wage system. In 2019, India made a national minimum wage universal, covering workers across all sectors through the Code on Wages, and a national minimum wage floor came into effect in South Africa. An estimated 19% of all wage earners globally are paid at or below the applicable minimum wage (ILO 2020). There has been a measurable positive impact of minimum wages on societal welfare, which is the reason behind increasing the implementation of minimum wage laws. Out of the cacophony of divergent views, I will argue that we still need the minimum wage.
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