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The Challenges Of Implement A Minimum Wages Policy

1148 words - 5 pages

Creating a so called “culture of compliance” among employers (Skidmore 1999: 435) is a low-cost strategy for facilitating the self-enforcement of minimum wage. This strategy implies the construction of persuasive arguments in favor of the minimum wage and the appeal to common values and beliefs such as, for instance, the principle of “fair pay – fair play”.

Here, two main strategies for building commitment among employers can be identified. First, persuasive processes at the interpersonal level may take place. A strategy of interpersonal persuasion was used, for example, in the interaction between labor inspectors and managers in British and US-American coal mines from the Sixties to the Eighties, when “open and frank discussions” as well as persuasion through the inspectors contributed significantly to achieve higher level of compliance with safety provisions (cf. Braithwaite 1985).

Second, persuasion about the minimum wage may take place at a societal level through a supportive public discourse. Employers who do not comply need to be presented to the wider society as “cheaters” (Ayres & Braithwaite 1992: 92; Skidmore 1999: 436). Indeed, employers paying under the minimum wage are competing in an unfair way with others who respect the minimum wage law. Furthermore, the profits deriving from labor cost cutting are made at the public expense, because underpaid workers may then need state subsidies.

Minimum Wage Setting and Common Rule Interpretation

The management approach to compliance highlights the importance of regulatory frameworks which have been discussed and understood by the actors involved. This is a way to avoid non-compliance due to rule ambiguity. Moreover, as the actors have previously agreed upon them, shared rules should be more likely to be complied with rather than top-down regulation.

A participative process of minimum wage setting allows the minimum wage to be set at a level on which workers’ and employers’ representatives have agreed. Ideally, the minimum wage would first be the outcome of a consensus-oriented consultative/bargaining process between social partners and then it would be institutionalized by the government. Employers should thus be more ready to comply with it rather than in the case when the minimum wage is fixed top-down by the government.

Information and Capacity Building

A strong, consensus-based minimum wage regulation still requires much knowledge- and capacity-building to ensure it is effective. As mentioned above, clear information and correct understanding of the minimum wage are necessary for compliance. In addition to this, training should be provided for employers, workers and their representatives in order to guarantee that non-compliance is not due to a lack of capacity. Information and training also contribute to empowering workers; knowing and understanding their rights forms the base from which they can defend themselves at the hands of a non-compliant employer.

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