6 September 2018

Raising mandatory minimum wage might seem to be a simple policy that serves to increase wages for low-income earners. Politicians use this policy with good intentions to reduce poverty and inequality. Yet, it has serious drawbacks and creates unintended consequences. The aim of this paper is to shed light on the complexity of the issue of minimum wage.

We argue that there is much more that needs to be taken into account when setting minimum wages than is usually discussed or considered in political debates. In this paper we look into three aspects of minimum wage regulation.

Firstly, we investigate minimum wage complexities from a theoretical standpoint. Secondly, we provide statistical information for selected countries regarding changes in minimum wage regulation. Lastly, we describe the political process behind decisions to apply minimum wages across selected countries in order to analyse to what extent economic circumstances are taken into consideration when setting the minimum wage.