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The Pros And Cons Of Minimum Wage Legislation

851 Words4 Pages

1. Introduction
There is a large ongoing debate today that pivots on the advantages and disadvantages of statutory minimum wage in an economy. Advocates of minimum wage legislation accentuate that it can alter the income distribution in favor of the low-paid labor force by attenuating the bottom tail of the distribution model. Opponents criticize its ‘Disemployment Effect’ and emphasize that it might shrink the share of earnings going to the impoverished and destitute work force (Terrell & Almeida, 2008) . This academic report presents recommendations to effectively implement a minimum wage policy in contrast with its potential challenges. The policy is deemed to yield an increase in wages for low-income workers, hence steering the economy …show more content…

123) defines minimum wage as “the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given period, which cannot be reduced by collective agreement or an individual contract.”

3. Merits of Minimum Wage Legislation

Minimum wage in the United Kingdom is considered one of the most successful government policies ever implemented. It was intricately planned and structured over a significant length of time. Chu (2015) highlights that approximately 1.4 million people in the UK today are employed at an hourly minimum wage of £ 6.70. With one of the lowest unemployment rates in Europe, Britain seems to illustrate an accurate balance between executing a minimum wage policy and preserving the uniform availability of job opportunities.

Hong Kong has witnessed an upward trend in median monthly wages of unskilled workers by 43% in money terms and 20% in real terms between 2010 and 2014 (Chu, 2015). Synchronously, the 2014 Report on Annual Earnings and Hours Survey published by The Census and Statistics Department outlines inputs from the Minimum Wage Commission that indicate a fall in the unemployment rate for elementary occupations from 4.4% in 2010 to 3.3% in 2014 (Chu,

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