View source for Minimum wage

{{Short description|Lowest remuneration which can be paid legally in a state for working}}
{{About|2=the song by Blake Shelton|3=Minimum Wage (song)|4=the comic book series by Bob Fingerman|5=Minimum Wage (comics){{!}}''Minimum Wage'' (comics)}}
{{Use dmy dates|date=December 2025}}

A '''minimum wage''' is the lowest [[remuneration]] that employers can legally pay their employees—the [[price floor]] below which employees may not sell their labor. [[List of countries by minimum wage|Most countries had introduced minimum wage]] legislation by the end of the 20th century.<ref name="ILO 2006">{{Cite web |title=ILO 2006: Minimum wages policy (PDF) |url=http://www.ilo.org/public/english/protection/condtrav/pdf/infosheets/w-1.pdf |url-status=live |archive-url=https://web.archive.org/web/20091229085643/http://www.ilo.org/public/english/protection/condtrav/pdf/infosheets/w-1.pdf |archive-date=29 December 2009 |access-date=1 March 2012 |publisher=Ilo.org}}</ref> Because minimum wages increase the [[cost of labor]], companies often try to avoid [[minimum wage law]]s by using [[gig worker]]s, by moving labor to locations with lower or nonexistent minimum wages, or by [[Automation|automating job functions]].<ref>{{Cite book |last1=Larsson |first1=Anthony |url=http://dx.doi.org/10.4324/9780429317866 |title=The digital transformation of labor: Automation, the gig economy and welfare |last2=Teigland |first2=Robin |date=2020 |publisher=Routledge Studies in Labour Economics |isbn=978-0-429-31786-6 |location=Routledge, London |doi=10.4324/9780429317866 |hdl=10419/213906 |access-date=13 February 2021 |s2cid=213586833}}</ref> Minimum wage policies can vary significantly between countries or even within a country, with different regions, sectors, or age groups having their own minimum wage rates. These variations are often influenced by the cost of living, regional economic conditions, and industry-specific factors.<ref>{{Cite journal |last=Neumark |first=David |date=2019 |title=The Econometrics and Economics of the Employment Effects of Minimum Wages: Getting from Known Unknowns to Known Knowns |url=https://onlinelibrary.wiley.com/doi/full/10.1111/geer.12162 |journal=German Economic Review |volume=20 |issue=3 |pages=e1–e32 |doi=10.1111/geer.12162 |s2cid=55558316 |access-date=23 April 2023|url-access=subscription }}</ref>

{{Bar chart
| float = right
| title = 2024 minimum wages in the [[OECD]],<br />in U.S. dollars [[purchasing power parity]]<ref>{{Cite web |title=Real minimum wages from the Organisation for Economic Co-operation and Development |url=https://data-explorer.oecd.org/vis?df[ds]=DisseminateFinalDMZ&df[id]=DSD_EARNINGS%40RMW&df[ag]=OECD.ELS.SAE&dq=..USD_PPP.H...&pd=2023%2C&to[TIME_PERIOD]=false&vw=tb |access-date=15 July 2025 |publisher=OECD}}</ref>
| label_type = Country
| data_type = Dollars per hour
| bar_width = 17
| width_units = em
| data_max = 17
| data1 = 17
| label1 = Luxembourg
| data2 = 17
| label2 = Germany
| data3 = 16
| label3 = United Kingdom
| data4 = 16
| label4 = France
| data5 = 16
| label5 = Australia
| data6 = 16
| label6 = New Zealand
| data7 = 16
| label7 = Netherlands
| data8 = 15
| label8 = Belgium
| data9 = 14
| label9 = Spain
| data10 = 14
| label10 = Ireland
| data11 = 13
| label11 = Canada
| data12 = 12
| label12 = Slovenia
| data13 = 12
| label13 = Poland
| data14 = 11
| label14 = South Korea
| data15 = ..
| label15 = Japan
| data16 = 10
| label16 = Lithuania
| data17 = 9
| label17 = Portugal
| data18 = 9
| label18 = Turkey
| data19 = 9
| label19 = Israel
| data20 = 8
| label20 = Czechia
| data21 = 8
| label21 = Greece
| data22 = 8
| label22 = Hungary
| data23 = 8
| label23 = Slovakia
| data24 = 7
| label24 = Estonia
| data25 = 7
| label25 = United States
| data26 = 7
| label26 = Latvia
| data27 = 5
| label27 = Costa Rica
| data28 = 5
| label28 = Chile
| data29 = 4
| label29 = Colombia
| data30 = 3
| label30 = Mexico
}}

The movement for minimum wages was initially motivated by a desire to stop the exploitation of workers in [[sweatshop]]s by employers who were thought to have unfair bargaining power over them. Over time, minimum wages came to be seen as a way to help lower-income families. Modern national laws enforcing compulsory union membership and prescribing minimum wages for members were first passed in New Zealand in 1894.<ref>{{Cite news |title=A brief history of the minimum wage in New Zealand |url=https://www.newshub.co.nz/home/money/2018/12/a-brief-history-of-the-minimum-wage-in-new-zealand.html |url-status=dead |archive-url=https://web.archive.org/web/20181219114446/https://www.newshub.co.nz/home/money/2018/12/a-brief-history-of-the-minimum-wage-in-new-zealand.html |archive-date=19 December 2018 |access-date=19 July 2022 |work=Newshub |language=en}}</ref> Although [[minimum wage law]]s are now in effect in many jurisdictions, differences of opinion exist about the benefits and drawbacks of a minimum wage. Additionally, minimum wage policies can be implemented in various ways, such as directly legislating specific wage rates, setting a formula to adjust the minimum wage based on economic indicators, or establishing wage boards that determine minimum wages in consultation with representatives of employers, employees, and the government.<ref>{{Cite journal |last=Dube |first=Arindrajit |year=1994 |title=Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania |url=https://www.jstor.org/stable/2118030 |journal=American Economic Review |volume=84 |issue=4 |pages=772–793 |jstor=2118030 |access-date=23 April 2023}}</ref>

Because it acts as a price floor on labor, standard [[supply and demand]] models predict that minimum wages will lead to a surplus of labor (unemployment), particularly among low-skilled workers<ref name=":3">{{Cite book |last=Neumark |first=David |title=Minimum wages |last2=Wascher |first2=William L. |date=2010 |publisher=MIT Press |isbn=978-0-262-51508-5 |edition=Paperback |location=Cambridge, Massachusetts London,England}}</ref>. However, they can increase labor market efficiency and employment in [[monopsony]] scenarios, where individual employers have some wage-setting power over the market as a whole.<ref>{{Cite web |title=$15 Minimum Wage |url=http://www.igmchicago.org/surveys/15-minimum-wage |url-status=dead |archive-url=https://web.archive.org/web/20210429073758/https://www.igmchicago.org/surveys/15-minimum-wage/ |archive-date=29 April 2021 |access-date=7 May 2019 |website=www.igmchicago.org}}</ref><ref>{{Cite book |last=Leonard |first=Thomas C. |url=https://archive.org/details/towardhistoryofa0000unse/page/117 |title=Toward a History of Applied Economics |publisher=Duke University Press |year=2000 |isbn=978-0-8223-6485-6 |editor-last=Backhouse |editor-first=Roger E. |location=Durham |pages=[https://archive.org/details/towardhistoryofa0000unse/page/117 117–144] |chapter=The Very Idea of Apply Economics: The Modern Minimum-Wage Controversy and Its Antecedents |editor-last2=Biddle |editor-first2=Jeff |chapter-url=https://archive.org/details/towardhistoryofa0000unse}}</ref><ref name="Gwartney">{{Cite book |last1=Gwartney |first1=James David |url=https://archive.org/details/essentialsofecon00gwar/page/405 |title=Essentials of Economics |last2=Clark |first2=J. R. |last3=Stroup |first3=Richard L. |publisher=Harcourt College Pub; 2 edition |year=1985 |isbn=978-0123110350 |location=New York |page=[https://archive.org/details/essentialsofecon00gwar/page/405 405]}}</ref> Supporters of the minimum wage say it increases the [[standard of living]] of workers, [[poverty reduction|reduces poverty]], reduces inequality, and boosts morale.<ref>{{Cite web |date=30 August 2017 |title=Should We Raise The Minimum Wage? |url=https://www.theperspective.com/debates/living/raise-minimum-wage/ |url-status=dead |archive-url=https://web.archive.org/web/20190725024634/https://www.theperspective.com/debates/living/raise-minimum-wage/ |archive-date=25 July 2019 |access-date=4 September 2017 |publisher=The Perspective}}</ref> In contrast, opponents of the minimum wage say it increases poverty and [[unemployment]] because some low-wage workers "will be unable to find work ... [and] will be pushed into the ranks of the unemployed".<ref name="WSJ100309">{{Cite news |date=3 October 2009 |title=The Young and the Jobless |url=https://online.wsj.com/news/articles/SB10001424052970203440104574402820278669840 |url-status=dead |archive-url=https://web.archive.org/web/20140111120719/http://online.wsj.com/news/articles/SB10001424052970203440104574402820278669840 |archive-date=11 January 2014 |access-date=11 January 2014 |work=The Wall Street Journal}}</ref><ref name="Oxford">{{Cite book |last=Black |first=John |title=Oxford Dictionary of Economics |date=18 September 2003 |publisher=Oxford University Press |isbn=978-0-19-860767-0 |page=300}}</ref><ref name="Card&Krueger" />

== History ==
{{further|History of the minimum wage}}
{{quote box
| bgcolor = #c6dbf7
| width = 22em
| salign=right
| quote = "It is a serious national evil that any class of his Majesty's subjects should receive less than a living wage in return for their utmost exertions. It was formerly supposed that the working of the laws of supply and demand would naturally regulate or eliminate that evil ... [and] ... ultimately produce a fair price. Where ... you have a powerful organisation on both sides ... there you have a healthy bargaining .... But where you have what we call sweated trades, you have no organisation, no parity of bargaining, the good employer is undercut by the bad, and the bad employer is undercut by the worst ... where those conditions prevail you have not a condition of progress, but a condition of progressive degeneration."
| source = [[Winston Churchill]] [[Member of Parliament (United Kingdom)|MP]], [[Trade Boards Bill]], [[Hansard]] [[House of Commons of the United Kingdom|House of Commons]] (28 April 1909) vol 4, [https://api.parliament.uk/historic-hansard/commons/1909/apr/28/trade-boards-bill#column_388 col 388]
}}

Amongst the earliest minimum wages were introduced in [[Mesopotamia]] during the reign of [[Hammurabi]],<ref>[https://www.google.co.uk/books/edition/Iraq/pfrUjjLbv3wC?hl=en&gbpv=1&dq=Mesopotamia+minimum+wage+hammurabi&pg=PA21&printsec=frontcover Iraq Old Land, New Nation in Conflict By William Spencer, Publisher: Twenty-First Century Books, 2000, P.21]</ref><ref>Wage Administration Plans, Practices, and Principles By Charles W. Brennan, Publisher: Hassell Street Press, 1963, P.8</ref> while in [[Ancient Egypt]] many workers received minimum wages in the form of rations.<ref>[https://www.google.co.uk/books/edition/Ancient_Egypt/Jn2N_bQrzS8C?hl=en&gbpv=1&dq=ancient+egypt+minimum+wages&pg=PA136&printsec=frontcover Ancient Egypt Anatomy of a Civilization By Barry J. Kemp, Publisher: Routledge, 1991, P.136]</ref> In [[medieval England]], the [[Ordinance of Labourers 1349|Ordinance of Labourers]] (1349), a [[decree]] by [[Edward III of England|King Edward III]], set a'' [[maximum wage]]'' for laborers in [[medieval England]].<ref name="Mihm">{{Cite news |last=Mihm |first=Stephen |date=5 September 2013 |title=How the Black Death Spawned the Minimum Wage |url=http://www.bloombergview.com/articles/2013-09-05/how-the-black-death-spawned-the-minimum-wage |url-status=live |archive-url=https://web.archive.org/web/20140418234149/http://www.bloombergview.com/articles/2013-09-05/how-the-black-death-spawned-the-minimum-wage |archive-date=18 April 2014 |access-date=17 April 2014 |work=Bloomberg View}}</ref><ref>{{Cite book |last=Wendy V. Cunningham |url=https://openknowledge.worldbank.org/bitstream/handle/10986/6760/405260Minimum0101OFFICIAL0USE0ONLY1.pdf?sequence=1 |title=Minimum wages and social policy: lessons from developing countries |publisher=The World Bank |year=2007 |isbn=978-0-8213-7011-7 |doi=10.1596/978-0-8213-7011-7 |access-date=17 April 2014 |archive-url=https://web.archive.org/web/20140419012530/https://openknowledge.worldbank.org/bitstream/handle/10986/6760/405260Minimum0101OFFICIAL0USE0ONLY1.pdf?sequence=1 |archive-date=19 April 2014 |url-status=live}}</ref> Edward, who was a wealthy landowner, was dependent, like his lords, on [[serfs]] to work the land. In the autumn of 1348, the [[Black Plague]] reached England and decimated the population.<ref name="guardian">{{Cite news |last=Thorpe |first=Vanessa |date=29 March 2014 |title=Black death was not spread by rat fleas, say researchers |url=https://www.theguardian.com/science/2014/mar/29/black-death-not-spread-rat-fleas-london-plague |url-status=live |archive-url=https://web.archive.org/web/20140330010701/http://www.theguardian.com/science/2014/mar/29/black-death-not-spread-rat-fleas-london-plague |archive-date=30 March 2014 |access-date=29 March 2014 |work=The Guardian}}</ref> The severe shortage of labor caused wages to soar and encouraged King Edward III to set a wage ceiling. Subsequent amendments to the ordinance, such as the [[Statute of Labourers 1351|Statute of Labourers]] (1351), increased the penalties for paying a wage above the set rates.<ref name="Mihm" />

While the laws governing wages initially set a ceiling on compensation, they were eventually used to set a [[living wage]]. An amendment to the Statute of Labourers in 1389 effectively fixed wages to the price of food. As time passed, the [[Justice of the Peace]], who was charged with setting the maximum wage, also began to set formal minimum wages. The practice was eventually formalized with the passage of the Act Fixing a Minimum Wage in 1604 by [[James VI and I|King James I]] for workers in the textile industry.<ref name=Mihm/>

By the early 19th century, the Statutes of Labourers were repealed as the increasingly [[History of capitalism|capitalistic United Kingdom]] embraced ''[[laissez-faire]]'' policies that disfavored wage regulation (whether upper or lower limits).<ref name="Mihm" /> The subsequent 19th century saw significant [[Timeline of labor issues and events|labor unrest]] affect many industrial nations. As [[trade unions]] were decriminalized during the century, attempts to control wages through [[collective agreement]] were made.

It was not until the 1890s that the first modern legislative attempts to regulate minimum wages appeared in New Zealand and Australia.<ref name="Starr" /> In 1896, the Australian state of Victoria introduced a Factory Act that established boards for setting minimum wages for people employed in industries known for sweating, such as meat, bread-making, furniture, and clothing.<ref>MANNING CLARK’S HISTORY OF AUSTRALIA ABRIDGED FROM THE SIX-VOLUME CLASSIC BY MICHAEL CATHCART, Penguin Books Australia Ltd, 1996 edition, P.471-472</ref> In [[Germany]], a guaranteed minimum wage was introduced during the chancellorship of [[Leo von Caprivi]].<ref>Geoffrey Jones, ''Deeply Responsible Business A Global History of Values-Driven Leadership'', Harvard University Press, 2023, P.74.</ref> The movement for a minimum wage was initially focused on stopping [[sweatshop]] labor and curbing the proliferation of sweatshops in manufacturing industries.<ref name="Nordlund">{{Cite book |last=Nordlund |first=Willis J. |url=https://books.google.com/books?id=iNnsATsBQa4C&q=history+of+minimum+wage+laws&pg=PR7 |title=The quest for a living wage: the history of the federal minimum wage program |publisher=Greenwood Press |year=1997 |isbn=9780313264122 |location=Westport, Conn. |page=xv}}</ref> The sweatshops employed large numbers of women and young workers, paying them what were considered to be substandard wages. The sweatshop owners were thought to have unfair bargaining power over their employees, and a minimum wage was proposed to ensure fair pay. Over time, the focus changed to helping people, especially families, become more self-sufficient.<ref name="Neumark">{{Cite book |last1=Neumark |first1=David |url=https://mitpress.mit.edu/books/minimum-wages |title=Minimum Wages |last2=William L. Wascher |publisher=The MIT Press |year=2008 |isbn=978-0-262-14102-4 |location=Cambridge, Massachusetts |archive-url=https://web.archive.org/web/20160428001158/https://mitpress.mit.edu/books/minimum-wages |archive-date=28 April 2016 |url-status=live}}</ref>

In the United States, the late 19th-century ideas for favoring a minimum wage also coincided with the [[Eugenics in the United States|eugenics movement]]. As a consequence, some economists at the time, including [[Royal Meeker]] and [[Henry Rogers Seager]], argued for the adoption of a minimum wage not only to support the worker, but to support their desired semi- and skilled laborers while forcing the undesired workers (including the idle, immigrants, women, racial minorities, and the disabled) out of the labor market. The result, over the longer term, would be to limit the nondesired workers' ability to earn money and have families, and thereby, remove them from the economists' ideal society.<ref>Thomas C. Leonard, ''Illiberal Reformers: Race, Eugenics & American Economics in the Progressive Era'', (Princeton: Princeton University Press, 2016): 158–167.</ref>

== Minimum wage laws ==
{{Main|Minimum wage law}}
{{quote box
| bgcolor = #c6dbf7
| width = 22em
| salign=right
| quote = "It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country."
| source = [[President Franklin D. Roosevelt]], 1933<ref name="NYT-20140307">{{Cite news |last=Tritch |first=Teresa |date=March 7, 2014 |title=F.D.R. Makes the Case for the Minimum Wage |url=https://takingnote.blogs.nytimes.com/2014/03/07/f-d-r-makes-the-case-for-the-minimum-wage/ |access-date=March 7, 2014 |work=[[New York Times]]}}</ref><ref>{{Cite web |date=16 June 1933 |title=Franklin Roosevelt's Statement on the National Industrial Recovery Act |url=http://docs.fdrlibrary.marist.edu/odnirast.html |access-date=17 March 2018 |website=Franklin D. Roosevelt Presidential Library and Museum Our Documents}}</ref>
}}

The first modern national minimum wages were enacted by the government recognition of unions which in turn established minimum wage policy among their members, as in [[Industrial Conciliation and Arbitration Act 1894|New Zealand in 1894]], followed by [[Australian labour movement|Australia in 1896]] and the [[Trade Boards Act 1909|United Kingdom in 1909]].<ref name="Starr">{{Cite book |last=Starr |first=Gerald |url=https://books.google.com/books?id=gzurqlZpyfcC&q=the+history+of+%22minimum+wage%22+law&pg=PA1 |title=Minimum wage fixing: an international review of practices and problems |publisher=International Labour Office |year=1993 |isbn=9789221025115 |edition=2nd impression (with corrections) |location=Geneva |page=1}}</ref> In the United States, statutory minimum wages were first introduced [[Fair Labor Standards Act of 1938|nationally in 1938]],<ref name="DOL">{{Cite journal |last=Grossman |first=Jonathan |year=1978 |title=Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum Wage |url=http://www.dol.gov/dol/aboutdol/history/flsa1938.htm |url-status=dead |journal=Monthly Labor Review |publisher=Department of Labor |volume=101 |issue=6 |pages=22–30 |pmid=10307721 |archive-url=https://web.archive.org/web/20140416113027/http://www.dol.gov/dol/aboutdol/history/flsa1938.htm |archive-date=16 April 2014 |access-date=17 April 2014}}</ref> and they were reintroduced and expanded in the [[National Minimum Wage Act 1998|United Kingdom in 1998]].<ref name="Stone">{{Cite news |last=Stone |first=Jon |date=1 October 2010 |title=History of the UK's minimum wage |url=http://www.totalpolitics.com/blog/28013/history-of-the-uk-s-minimum-wage.thtml |url-status=dead |archive-url=https://web.archive.org/web/20140114075901/http://www.totalpolitics.com/blog/28013/history-of-the-uk-s-minimum-wage.thtml |archive-date=14 January 2014 |access-date=17 April 2014 |work=Total Politics}}</ref> There is now legislation or binding [[collective bargaining]] regarding minimum wage in more than 90 percent of all countries.<ref>{{Cite journal |last=Williams |first=Walter E. |date=June 2009 |title=The Best Anti-Poverty Program We Have? |url=http://www.thefreelibrary.com/The+best+anti-poverty+program+we+have%3F-a0203335454 |journal=Regulation |volume=32 |issue=2 |page=62}}</ref><ref name="ILO 2006" /> In the European Union, 21 out of 27 member states currently have national minimum wages.<ref name=":0">{{Cite web |title=Minimum wage statistics – Statistics Explained |url=http://ec.europa.eu/eurostat/statistics-explained/index.php/Minimum_wage_statistics |url-status=live |archive-url=https://web.archive.org/web/20160207085307/http://ec.europa.eu/eurostat/statistics-explained/index.php/Minimum_wage_statistics |archive-date=7 February 2016 |access-date=12 February 2016 |website=ec.europa.eu}}</ref> Other countries, such as Sweden, Finland, Denmark, Switzerland, Austria, and Italy, have no minimum wage laws, but rely on employer groups and trade unions to set minimum earnings through collective bargaining.<ref>Ehrenberg, Ronald G. ''Labor Markets and Integrating National Economies'', Brookings Institution Press (1994), p. 41</ref><ref name="NYT-20141027-LA">{{Cite news |last1=Alderman |first1=Liz |last2=Greenhouse |first2=Steven |date=27 October 2014 |title=Fast Food in Denmark Serves Something Atypical: Living Wages |url=https://www.nytimes.com/2014/10/28/business/international/living-wages-served-in-denmark-fast-food-restaurants.html |url-status=live |archive-url=https://web.archive.org/web/20141028002802/http://www.nytimes.com/2014/10/28/business/international/living-wages-served-in-denmark-fast-food-restaurants.html |archive-date=28 October 2014 |access-date=27 October 2014 |work=[[The New York Times]]}}</ref>

Minimum wage rates vary greatly across many different jurisdictions, not only in setting a particular amount of money—for example $7.25 per hour ($14,500 per year) under certain US state laws (or $2.13 for employees who receive tips, which is known as the [[Tipped wage in the United States|tipped minimum wage]]), $16.28 per hour in the U.S. state of [[Washington (state)|Washington]],<ref>{{Cite web |title=Minimum Wage |url=https://www.lni.wa.gov/workers-rights/wages/minimum-wage/ |url-status=live |archive-url=https://web.archive.org/web/20231023152149/https://www.lni.wa.gov/workers-rights/wages/minimum-wage/ |archive-date=23 October 2023 |access-date=10 November 2023 |website=Minimum Wage |publisher=Washington State Dept. of Labor & Industries}}</ref> or £11.44 (for those aged 21+) in the United Kingdom<ref>{{Cite web |title=National Minimum Wage and National Living Wage rates |url=https://www.gov.uk/national-minimum-wage-rates |access-date=31 October 2024}}</ref>—but also in terms of which pay period (for example Russia and China set monthly minimum wages) or the scope of coverage. Currently, the United States federal minimum wage is $7.25 per hour, though most states have a higher minimum wage. However, some states do not have a minimum wage law, such as Louisiana and Tennessee, and others have minimum wages below the federal minimum, such as Georgia and Wyoming, although the federal minimum wage is enforced in those states.<ref>{{Cite web |title=State Minimum Wage Laws |url=https://www.dol.gov/agencies/whd/minimum-wage/state |publisher=[[U.S. Department of Labor]]}}</ref> Some jurisdictions allow employers to count tips given to their workers as credit towards the minimum wage levels. [[India]] was one of the first developing countries to introduce [[Minimum Wages Act 1948|minimum wage policy]] in its law in 1948. However, it is rarely implemented, even by contractors of government agencies. In [[Mumbai]], as of 2017, the minimum wage was Rs. 348/day.<ref name="tiss2017">{{Cite web |title=Interview with Mr. Milind Ranade (Kachra Vahtuk Shramik Sangh Mumbai) |url=http://wastemumbai.tiss.edu/interviews/ |url-status=dead |archive-url=https://web.archive.org/web/20190327101203/http://wastemumbai.tiss.edu/interviews/ |archive-date=27 March 2019 |access-date=20 March 2019 |website=TISS Wastelines official website |publisher=Tata Institute of Social Sciences}}</ref>
India also has one of the most complicated systems with more than 1,200 minimum wage rates depending on the geographical region.<ref>{{Cite web |date=22 February 2013 |title=Most Asked Questions about Minimum Wages in India |url=http://www.paycheck.in/main/salary/minimumwages/minfaqfolder |url-status=live |archive-url=https://web.archive.org/web/20130403124424/http://www.paycheck.in/main/salary/minimumwages/minfaqfolder |archive-date=3 April 2013 |access-date=29 March 2013 |publisher=PayCheck.in}}</ref><!--
PLEASE ADD ANY REGION-SPECIFIC INFO TO THE MAIN ARTICLE, [[Minimum wage law]].
-->

=== Informal minimum wages ===
Customs, tight labor markets, and extra-legal pressures from governments or labor unions can each produce a ''de facto'' minimum wage. So can international public opinion, by pressuring [[multinational companies]] to pay [[Third World]] workers wages usually found in more industrialized countries. The latter situation in Southeast Asia and Latin America was publicized in the 2000s, but it existed with companies in West Africa in the middle of the 20th century.<ref name="SowellBasic">{{Cite book |last=Sowell |first=Thomas |author-link=Thomas Sowell |title=Basic Economics: A Citizen's Guide to the Economy |publisher=Basic Books |year=2004 |isbn=978-0-465-08145-5 |location=New York |pages=163–69 |chapter=Minimum Wage Laws |chapter-url=https://books.google.com/books?id=ax6dsqMdPHQC&pg=PA163}}{{Dead link|date=August 2024 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>

=== Setting minimum wage ===
Among the indicators that might be used to establish an initial minimum wage rate are ones that minimize the loss of jobs while preserving international competitiveness.<ref>{{Cite web |title=Provisional Minimum Wage Commission: Preliminary Views on a Bask of Indicators, Other Relevant Considerations and Impact Assessment |url=http://www.labour.gov.hk/eng/rbo/Assessment.pdf |url-status=dead |archive-url=https://web.archive.org/web/20120119120419/http://www.labour.gov.hk/eng/rbo/Assessment.pdf |archive-date=19 January 2012 |access-date=19 February 2012 |publisher=Provisional Minimum Wage Commission, Hong Kong Special Administrative Region Government}}</ref> Among these are general economic conditions as measured by real and nominal gross domestic product; inflation; labor supply and demand; wage levels, distribution and differentials; employment terms; productivity growth; labor costs; business operating costs; the number and trend of bankruptcies; [[Index of Economic Freedom|economic freedom]] rankings; standards of living and the prevailing average wage rate.

In the business sector, concerns include the expected increased cost of doing business, threats to profitability, rising levels of unemployment (and subsequent higher government expenditure on welfare benefits, raising tax rates), and the possible [[knock-on effect]]s to the wages of more experienced workers who might already be earning the new statutory minimum wage, or slightly more.<ref>''Setting the Initial Statutory Minimum Wage Rate'', submission to government by the Hong Kong General Chamber of Commerce.</ref> Other concerns include [[purchasing power]], inflation indexing and standardized working hours.

=== Impact of minimum wage on income inequality and poverty ===
Minimum wage policies have been debated for their impact on income inequality and poverty levels. Proponents argue that raising the minimum wage can help reduce income disparities, enabling low-income workers to afford necessities and contribute to the overall economy. Higher minimum wages may also have a ripple effect, pushing up wages for those earning slightly above the minimum wage.<ref>{{Cite journal |last=Card |first=David |year=1994 |title=Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania |url=https://www.jstor.org/stable/2118030 |journal=The American Economic Review |publisher=American Economic Association |volume=84 |issue=4 |pages=772–793 |jstor=2118030}}</ref>

However, opponents contend that minimum wage increases can lead to job losses, particularly for low-skilled and entry-level workers, as businesses may be unable to afford higher labor costs and may respond by cutting jobs or hours.<ref>{{Cite journal |last=Neumark |first=David |year=2006 |title=Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research |url=https://www.nber.org/papers/w12663 |journal=NBER Working Paper No. 12663 |series=Working Paper Series |publisher=National Bureau of Economic Research |doi=10.3386/w12663|doi-access=free }}</ref> They also argue that minimum wage increases may not effectively target those living in poverty, as many minimum wage earners are secondary earners in households with higher incomes.<ref>{{Cite journal |last=MaCurdy |first=Thomas |year=2015 |title=How Effective Is the Minimum Wage at Supporting the Poor? |url=https://www.journals.uchicago.edu/doi/abs/10.1086/679626 |journal=Journal of Political Economy |publisher=The University of Chicago Press |volume=123 |issue=2 |pages=497–545 |doi=10.1086/679626 |s2cid=154665585|url-access=subscription }}</ref> Some studies suggest that targeted income support programs, such as the Earned Income Tax Credit (EITC) in the United States, may be more effective in addressing poverty.<ref>{{Cite journal |last=Hotz |first=V. Joseph |year=2006 |title=Examining the Effect of the Earned Income Tax Credit on the Labor Market Participation of Families on Welfare |url=https://www.nber.org/papers/w11968 |journal=NBER Working Paper No. 11968 |series=Working Paper Series |publisher=National Bureau of Economic Research |doi=10.3386/w11968|doi-access=free }}</ref>

A 2025 National Bureau of Economic Research (NBER) working paper estimates a 2.7–3.6% relative decline in California's fast-food employment compared to the rest of the U.S. from September 2023 to September 2024 following an increase in the state's minimum wage from $16 to $20 per hour. The median estimate is about 18,000 jobs that would have existed without the policy.<ref>{{Citation |last1=Clemens |first1=Jeffrey |title=Did California's Fast Food Minimum Wage Reduce Employment? |date=July 2025 |type=Working Paper |url=https://www.nber.org/papers/w34033 |access-date=13 December 2025 |series=Working Paper Series |publisher=National Bureau of Economic Research |doi=10.3386/w34033 |id=34033 |last2=Edwards |first2=Olivia |last3=Meer |first3=Jonathan|doi-access=free }}</ref>

Revised Bureau of Labor Statistics (BLS) data, analyzed in reports from Beacon Economics/Pepperdine (2025) and others, indicate job losses ranging from 10,000 to 23,000 in 2024, with California's sector declining by 3.2% while national fast-food employment grew slightly.<ref>{{Cite web |title=At One Year, California's Fast-Food Minimum Wage Hike has Reduced Jobs, New Pepperdine White Paper Reveals |url=https://www.pepperdine.edu/press-room/news-releases/spp-fast-food-white-paper.htm |access-date=13 December 2025 |website=Pepperdine University |language=en}}</ref>

The effectiveness of minimum wage policies in reducing income inequality and poverty remains a subject of ongoing debate and research.

== Economic models ==
{{See also|Labour economics}}

=== Supply and demand model ===
[[File:Wage labour 2.svg|thumb|Graph showing the basic [[supply and demand]] model of the minimum wage in the labor market]]
{{Main|Supply and demand}}

According to the supply-and-demand model of the labor market shown in many economics textbooks, increasing the minimum wage decreases employment among minimum-wage workers.<ref name="Card&Krueger" /> One such textbook states:<ref name="Gwartney" />
{{blockquote|
If a higher minimum wage increases the wage rates of unskilled workers above the level that would be established by market forces, the quantity of unskilled workers employed will fall. The minimum wage will price the services of the least productive (and therefore lowest-wage) workers out of the market. ... the direct results of minimum wage legislation are clearly mixed. Some workers, most likely those whose previous wages were closest to the minimum, will enjoy higher wages. Others, particularly those with the lowest prelegislation wage rates, will be unable to find work. They will be pushed into the ranks of the unemployed.}}

A firm's cost is an increasing function of the wage rate. The higher the wage rate, the fewer hours an employer will demand of employees. This is because, as the wage rate rises, it becomes more expensive for firms to hire workers and so firms hire fewer workers (or hire them for fewer hours). The [[Labour demand|demand of labor]] curve is therefore shown as a line moving down and to the right.<ref name="Ehren">Ehrenberg, R. and Smith, R. "Modern labor economics: theory and public policy", HarperCollins, 1994, 5th ed.{{page needed|date=December 2013}}</ref> Since higher wages increase the quantity supplied, the [[Labour supply|supply of labor]] curve is upward sloping; it is shown as a line moving up and to the right.<ref name="Ehren" /> If no minimum wage is in place, wages will adjust until the quantity of labor demanded is equal to quantity supplied, reaching [[economic equilibrium|equilibrium]], where the supply and demand curves intersect. The minimum wage functions as a classical [[price floor]] on labor. Standard theory says that, if set above the equilibrium price, more labor will be willing to be provided by workers than will be demanded by employers, creating a [[Economic surplus|surplus]] of labor, i.e., unemployment.<ref name="Ehren" /> The economic model of markets predicts the same of other commodities (like milk and wheat, for example): Artificially raising the price of the commodity tends to cause an increase in quantity supplied and a decrease in quantity demanded. The result is a surplus of the commodity. When there is a wheat surplus, the government buys it. Since the government does not hire surplus labor, the labor surplus takes the form of unemployment, which tends to be higher with minimum wage laws than without them.<ref name="SowellBasic" />

The supply and demand model implies that by mandating a price floor above the equilibrium wage, minimum wage laws will cause unemployment.<ref name="MB">{{Cite book |last1=McConnell |first1=C. R. |url=https://archive.org/details/microeconomicsst00camp |title=Economics |last2=Brue |first2=S. L. |publisher=Irwin-McGraw Hill |year=1999 |isbn=9780072898385 |edition=14th |page=594 |url-access=registration}}</ref><ref name="GSSM">{{Cite book |last1=Gwartney |first1=J. D. |url=https://archive.org/details/economics00gwar |title=Economics: Private and Public Choice |last2=Stroup |first2=R. L. |last3=Sobel |first3=R. S. |last4=Macpherson |first4=D. A. |publisher=Thomson South-Western |year=2003 |edition=10th |page=[https://archive.org/details/economics00gwar/page/97 97] |url-access=registration}}</ref> This is because a greater number of people are willing to work at the higher wage, while a smaller number of jobs will be available at the higher wage. Companies can be more selective in whom they employ; thus, the least skilled and least experienced will typically be excluded. An increase in the minimum wage will generally affect employment only in the low-skill labor market, where the equilibrium wage is already at or below the minimum wage, whereas in higher-skill labor markets, the equilibrium wage is too high for a change in the minimum wage to affect employment.<ref name="M">{{Cite book |last=Mankiw |first=N. Gregory |title=Principles of Macroeconomics |publisher=South-Western Pub |year=2011 |edition=6th |page=311}}</ref>

Classical liberal and libertarian economists have long emphasized this disemployment effect as a predictible consequence of government intervention in voluntary wage contracts.<ref>{{Cite journal |last=Stigler |first=George J. |date=1946 |title=The Economics of Minimum Wage Legislation |url=https://www.jstor.org/stable/1801842 |journal=The American Economic Review |volume=36 |issue=3 |pages=358–365 |issn=0002-8282}}</ref> Milton Friedman described the minimum wage as "anti-black" because it disproportionately harms low-skilled minority workers by preventing them from competing on prices.<ref>{{Cite news |last=Friedman |first=Milton |date=September 26, 1966 |title=Minimum-Wage Rates |url=https://miltonfriedman.hoover.org/internal/media/dispatcher/213993/full |access-date=2026-05-15 |work=Newsweek}}</ref> Empirical patterns, including higher youth unemployment, reduced hours for teens, and substitution toward automation<ref>{{Cite journal |last=Lordan |first=Grace |last2=Neumark |first2=David |date=2018-06-01 |title=People versus machines: The impact of minimum wages on automatable jobs |url=https://www.sciencedirect.com/science/article/pii/S0927537118300228 |journal=Labour Economics |volume=52 |pages=40–53 |doi=10.1016/j.labeco.2018.03.006 |issn=0927-5371}}</ref> or offshoring, align with the model across decades of data.<ref name=":3" />

=== Monopsony ===
[[File:Monopsony3.png|thumb|Monopsony models suggest that a moderate minimum wage may increase employment as labor markets are [[Monopsony|monopsonistic]] and workers [[Inequality of bargaining power|lack bargaining power]].]]
{{Main|Monopsony}}

The supply and demand model predicts that raising the minimum wage helps workers whose wages are raised, but hurts people who are not hired (or who lose their jobs) when companies cut back on employment. But proponents of the minimum wage hold that the situation is much more complicated than the model can account for. One complicating factor is the possibility of [[monopsony]] in the labor market, whereby the individual employer has some market power over wages. Thus, it is at least theoretically possible that the minimum wage may boost employment. Though single-employer market power is unlikely to exist in most labor markets in the sense of the traditional '[[company town]],' asymmetric information, imperfect mobility, and the personal element of the labor transaction give some degree of wage-setting power to most firms.<ref>{{Cite journal |last1=Boal |first1=William M. |last2=Ransom |first2=Michael R |date=March 1997 |title=Monopsony in the Labor Market |journal=Journal of Economic Literature |volume=35 |issue=1 |pages=86–112 |jstor=2729694}}</ref>

Monopsony models predict that although an excessively high minimum wage may raise unemployment by setting the wage above the market-clearing level, a more reasonable minimum wage can increase employment and enhance growth and efficiency. This is because labor markets are [[Monopsony|monopsonistic]] and workers persistently [[Inequality of bargaining power|lack bargaining power]].

Keynesian economics predict an increase in aggregate demand due to a minimum wage hike, because lower-income individuals who benefit from the minimum wage have a higher propensity to spend their income. This, in turn, should prompt companies to expand production to meet demand, resulting in hiring and increased employment.<ref>e.g. DE Card and AB Krueger, ''Myth and Measurement: The New Economics of the Minimum Wage'' (1995) and S Machin and A Manning, 'Minimum wages and economic outcomes in Europe' (1997) 41 European Economic Review 733</ref><ref name="Rittenberg">{{Cite book |last1=Tregarthen |first1=Timothy |url=https://books.google.com/books?id=HveHgrID5GYC&q=monopsony+minimum+wage&pg=PA290 |title=Economics |last2=Rittenberg |first2=Libby |publisher=Worth Publishers |year=1999 |isbn=9781572594180 |edition=2nd |location=New York |page=290 |access-date=21 June 2014}}</ref>

=== Criticisms of the supply and demand model ===
The argument that a minimum wage decreases employment is based on a simple supply-and-demand model of the labor market. A number of economists, such as [[Pierangelo Garegnani]],<ref>{{Cite journal |last=Garegnani |first=P. |date=July 1970 |title=Heterogeneous Capital, the Production Function and the Theory of Distribution |journal=The Review of Economic Studies |volume=37 |issue=3 |pages=407–36 |doi=10.2307/2296729 |jstor=2296729}}</ref> Robert L. Vienneau,<ref>{{Cite journal |last=Vienneau |first=Robert L. |year=2005 |title=On Labour Demand and Equilibria of the Firm |journal=The Manchester School |volume=73 |issue=5 |pages=612–19 |doi=10.1111/j.1467-9957.2005.00467.x |s2cid=153778021 }}</ref> and Arrigo Opocher and [[Ian Steedman]],<ref>{{Cite journal |last1=Opocher |first1=A. |last2=Steedman |first2=I. |year=2009 |title=Input price-input quantity relations and the numeraire |journal=Cambridge Journal of Economics |volume=33 |issue=5 |pages=937–48 |doi=10.1093/cje/bep005}}</ref> building on the work of [[Piero Sraffa]], argue that the model, even given all its assumptions, is logically incoherent. Michael Anyadike-Danes and [[Wynne Godley]] argue, based on simulation results, that little of the empirical work done with the textbook model constitutes a potentially [[Falsifiability|falsifiable theory]], and consequently empirical evidence hardly exists for that model.<ref>{{Cite journal |last1=Anyadike-Danes |first1=Michael |last2=Godley |first2=Wynne |year=1989 |title=Real Wages and Employment: A Sceptical View of Some Recent Empirical Work |journal=The Manchester School |volume=57 |issue=2 |pages=172–87 |doi=10.1111/j.1467-9957.1989.tb00809.x}}</ref> Graham White argues, partially based on Sraffianism, that the policy of increased [[labor market flexibility]], including the reduction of minimum wages, does not have an "intellectually coherent" argument in economic theory.<ref>{{Cite journal |last=White |first=Graham |date=November 2001 |title=The Poverty of Conventional Economic Wisdom and the Search for Alternative Economic and Social Policies |url=http://www.australianreview.net/journal/v2/n2/white.html |url-status=live |journal=The Drawing Board: An Australian Review of Public Affairs |volume=2 |issue=2 |pages=67–87 |archive-url=https://web.archive.org/web/20130524091537/http://www.australianreview.net/journal/v2/n2/white.html |archive-date=24 May 2013}}</ref>

Gary Fields, Professor of Labor Economics and Economics at [[Cornell University]], argues that the standard textbook model for the minimum wage is ambiguous, and that the standard theoretical arguments incorrectly measure only a one-sector market. Fields says a two-sector market, where "the self-employed, service workers, and farm workers are typically excluded from minimum-wage coverage ... [and with] one sector with minimum-wage coverage and the other without it [and possible mobility between the two]," is the basis for better analysis. Through this model, Fields shows the typical theoretical argument to be ambiguous and says "the predictions derived from the textbook model definitely do not carry over to the two-sector case. Therefore, since a non-covered sector exists nearly everywhere, the predictions of the textbook model simply cannot be relied on."<ref>{{Cite journal |last=Fields |first=Gary S. |year=1994 |title=The Unemployment Effects of Minimum Wages |url=https://digitalcommons.ilr.cornell.edu/articles/1118 |journal=International Journal of Manpower |volume=15 |issue=2 |pages=74–81 |doi=10.1108/01437729410059323 |hdl=1813/75106 |hdl-access=free}}</ref>

An alternative view of the labor market characterizes low-wage labor markets as [[monopsonistic competition]], in which buyers (employers) have significantly more [[market power]] than sellers (workers). This monopsony could be a result of intentional [[collusion]] between employers, or naturalistic factors such as [[Labor market segmentation|segmented markets]], [[search cost]]s, [[Information asymmetry|information costs]], [[Geographic mobility|imperfect mobility]], and the personal element of labor markets.{{citation needed|date=October 2016}} Such a case is a type of [[market failure]] and results in workers being paid less than their marginal value. Under the monopsonistic assumption, an appropriately set minimum wage could increase both [[wages]] and employment, with the optimal level being equal to the [[marginal product of labour|marginal product of labor]].<ref name="Manning2003">{{Cite book |last=Manning |first=Alan |title=Monopsony in motion: Imperfect Competition in Labor Markets |publisher=Princeton University Press |year=2003 |isbn=978-0-691-11312-8 |location=Princeton, NJ}}{{page needed|date=December 2013}}</ref> This view emphasizes the role of minimum wages as a [[regulated market|market regulation]] policy akin to [[antitrust]] policies, as opposed to an illusory "[[free lunch]]" for low-wage workers.

Another reason minimum wage may not affect employment in certain industries is that the demand for the product the employees produce is highly [[Price elasticity of demand|inelastic]].<ref>{{Cite book |last=Gillespie |first=Andrew |title=Foundations of Economics |publisher=Oxford University Press |year=2007 |page=240}}</ref> For example, if management is forced to increase wages, management can pass on the increase in wage to consumers in the form of higher prices. Since demand for the product is highly inelastic, consumers continue to buy it at the higher price, so the manager is not forced to lay off workers. Economist [[Paul Krugman]] argues this explanation neglects to explain why the firm was not charging this higher price absent the minimum wage.<ref>{{Cite book |last=Krugman |first=Paul |title=Economics |publisher=Worth Publishers |year=2013 |page=385}}</ref>

Three other possible reasons minimum wages do not affect employment were suggested by [[Alan Blinder]]: higher wages may reduce [[turnover (employment)|turnover]], and hence training costs; raising the minimum wage may "render moot" the potential problem of recruiting workers at a higher wage than current workers; and minimum wage workers might represent such a small proportion of a business' cost that the increase is too small to matter. He admits that he does not know if these are correct, but argues that "the list demonstrates that one can accept the new empirical findings and still be a card-carrying economist".<ref>{{Cite news |last=Blinder |first=Alan S. |date=23 May 1996 |title=The $5.15 Question |url=https://www.nytimes.com/1996/05/23/opinion/the-5.15-question.html |url-status=live |archive-url=https://web.archive.org/web/20170701015950/http://www.nytimes.com/1996/05/23/opinion/the-5.15-question.html |archive-date=1 July 2017 |work=The New York Times |page=A29}}</ref>

=== Mathematical models of the minimum wage and frictional labor markets ===
The following mathematical models are more quantitative in orientation and highlight some of the difficulties in determining the impact of the minimum wage on labor market outcomes.<ref>{{Cite book |last1=Cahuc |first1=Pierre |url=https://mitpress.mit.edu/books/labor-economics-second-edition |title=Labor Economics |last2=Carcillo |first2=Stéphane |last3=Zylberberg |first3=André |publisher=The MIT Press |year=2014 |isbn=9780262027700 |edition=2nd |location=Cambridge, MA |pages=796–799}}</ref> Specifically, these models focus on labor markets with frictions. They may result in positive or negative outcomes from raising the minimum wage, depending on the circumstances.

==== Welfare and labor market participation ====
{{technical|section|date=September 2022}}
Assume that the decision to participate in the labor market results from a trade-off between being an unemployed job seeker and not participating at all. All individuals whose expected utility outside the labor market is less than the expected utility of an unemployed person <math>V_{u}</math> decide to participate in the labor market. In the basic search and [[Matching theory (economics)|matching model]], the expected utility of unemployed persons <math>V_{u}</math> and that of employed persons <math>V_{e}</math> are defined by:

<math display="block">\begin{aligned}
rV_{e} &= w + q(V_{u}-V_{e}) \\
rV_{u} &= z + \theta m(\theta) (V_{e}-V_{u})
\end{aligned}</math>Let <math>w</math> be the wage, <math>r</math> the interest rate, <math>z</math> the instantaneous income of unemployed persons, <math>q</math> the exogenous job destruction rate, <math>\theta</math> the labor market tightness, and <math>\theta m(\theta)</math> the job finding rate. The profits <math>\Pi_{e}</math> and <math>\Pi_{v}</math> expected from a filled job and a vacant one are:<math display="block">r\Pi_{e} = y-w+q(\Pi_{v}-\Pi_{e}), \quad r\Pi_{v} = -h + m(\theta)(\Pi_{e}-\Pi_{v})</math>where <math>h</math> is the cost of a vacant job and <math>y</math> is the productivity. When the ''free entry condition'' <math>\Pi_{v} = 0</math> is satisfied, these two equalities yield the following relationship between the wage <math>w</math> and labor market tightness <math>\theta</math>:
{{Labor|expanded=rights|sp=us}}
<math display="block">{h\over{m(\theta)}} = {y-w\over{r+q}}</math>If <math>w</math> represents a minimum wage that applies to all workers, this equation completely determines the equilibrium value of the labor market tightness <math>\theta</math>. There are two conditions associated with the matching function:<math display="block">m'(\theta) < 0, \quad [\theta m(\theta)]' > 0</math>This implies that <math>\theta</math> is a decreasing function of the minimum wage <math>w</math>, and so is the job finding rate <math>\alpha = \theta m(\theta)</math>. A hike in the minimum wage reduces the profitability of a job, so firms post fewer vacancies and the job-finding rate falls. Now let's rewrite <math>rV_{u}</math> to be:<math display="block">rV_{u} = {(r+q)z + \theta m(\theta) w\over{r+q + \theta m(\theta)}}</math>Using the relationship between the wage and labor market tightness to eliminate the wage from the last equation gives us:
<math display="block">rV_{u} = {\theta m(\theta)y + (r+q)z - \theta(r+q)h\over{r+q + \theta m(\theta)}}</math> By maximizing <math>rV_{u}</math> in this equation, with respect to the labor market tightness, it follows that:<math display="block">{[1-\eta(\theta)](y-z)\over{r+q+\eta(\theta)\theta m(\theta)}} = {h\over{m(\theta)}}</math>where <math>\eta(\theta)</math> is the [[Elasticity (economics)|elasticity]] of the matching function:<math display="block">\eta(\theta) = -\theta{m'(\theta)\over{m(\theta)}} \equiv -\theta {d\over{d\theta}}\log m(\theta)</math>This result shows that the expected utility of unemployed workers is maximized when the minimum wage is set at a level that corresponds to the wage level of the decentralized economy in which the bargaining power parameter is equal to the elasticity <math>\eta(\theta)</math>. The level of the negotiated wage is <math>w^{*}</math>.

If <math>w < w^{*}</math>, then an increase in the minimum wage increases participation ''and'' the unemployment rate, with an ambiguous impact on employment. When the bargaining power of workers is less than <math>\eta(\theta)</math>, an increase in the minimum wage improves the welfare of the unemployed – this suggests that minimum wage hikes can improve labor market efficiency, at least up to the point when bargaining power equals <math>\eta(\theta)</math>.

==== Job search effort ====
{{technical|section|date=September 2022}}
In the model just presented, the minimum wage always increases unemployment. This result does not necessarily hold when workers' search effort is [[Endogeneity (econometrics)|endogenous]].

Consider a model where the intensity of the job search is designated by the scalar <math>\epsilon</math>, which can be interpreted as the amount of time and/or intensity of the effort devoted to search. Assume that the arrival rate of job offers is <math>\alpha\epsilon</math> and that the wage distribution is degenerated to a single wage <math>w</math>. Denote <math>\varphi(\epsilon)</math> to be the cost arising from the search effort, with <math>\varphi' > 0, \; \varphi'' > 0</math>. Then the discounted utilities are given by:<math display="block">\begin{aligned}
rV_{e} &= w + q(V_{u}-V_{e}) \\
rV_{u} &= \max_{\epsilon} \; z - \varphi(\epsilon) + \alpha \epsilon(V_{e}-V_{u})
\end{aligned}</math>Therefore, the optimal search effort is such that the marginal cost of performing the search is equation to the marginal return:<math display="block">\varphi'(\epsilon) = \alpha(V_{e}-V_{u})</math>This implies that the optimal search effort increases as the difference between the expected utility of the job holder and the expected utility of the job seeker grows. In fact, this difference actually grows with the wage. To see this, take the difference of the two discounted utilities to find:<math display="block">(r+q)(V_{e}-V_{u}) = w-\max_{\epsilon}\left[z - \varphi(\epsilon) + \alpha \epsilon(V_{e}-V_{u}) \right]</math>Then differentiating with respect to <math>w</math> and rearranging gives us:<math display="block">{d\over{dw}}(V_{e}-V_{u}) = {1\over{r+q+\alpha\epsilon^{*}}} > 0</math>where <math>\epsilon^{*}</math> is the optimal search effort. This implies that a wage increase drives up job-search effort and, therefore, the job-finding rate. Additionally, the unemployment rate <math>u</math> at equilibrium is given by:<math display="block">u = {q\over{q+\alpha\epsilon}}</math>A hike in the wage, which increases the search effort and the job finding rate, decreases the unemployment rate. So it is possible that a hike in the minimum wage ''may'', by boosting job seekers' search effort, increase employment. Taken together with the previous section, the minimum wage in labor markets with frictions can increase employment and reduce the unemployment rate when it is sufficiently low. However, a high minimum wage is detrimental to employment and increases the unemployment rate.

== Empirical studies ==
[[File:Funnel Graph of Estimated Minimum Wage Effects.jpg|thumb|Estimated minimum wage effects on employment from a meta-study of 64 other studies showed insignificant employment effect (both practically and statistically) from minimum-wage raises. The most precise estimates were heavily clustered at or near zero employment effects (elasticity = 0).<ref>{{Cite web |last=Schmitt |first=John |date=February 2013 |title=Why Does the Minimum Wage Have No Discernible Effect on Employment? |url=http://www.cepr.net/documents/publications/min-wage-2013-02.pdf |url-status=live |archive-url=https://web.archive.org/web/20131203232557/http://www.cepr.net/documents/publications/min-wage-2013-02.pdf |archive-date=3 December 2013 |access-date=5 December 2013 |website=Center for Economic and Policy Research}}
* {{cite news |author=Brad Plumer |date=14 February 2013 |title=Economists disagree on whether the minimum wage kills jobs. Why? |url=https://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/14/why-economists-are-so-puzzled-by-the-minimum-wage/ |newspaper=The Washington Post}}</ref>]]
Economists disagree as to the impact of minimum wages on employment. Empirical studies usually estimate the elasticity of employment with respect to the minimum wage level. This is done by dividing the estimated causal effect on employment rate by the percentage change in the minimum wage.

Economists have done empirical studies on different aspects of the minimum wage, including:<ref name="Neumark" />
* Employment effects, the most frequently studied aspect
* Effects on the [[Income distribution|distribution of wages and earnings]] among low-paid and higher-paid workers
* Effects on the distribution of incomes among low-income and higher-income families
* Effects on the skills of workers through job training and the deferring of work to acquire education
* Effects on prices and profits
* Effects on [[on-the-job training]]
Until the mid-1990s, a consensus existed among economists–both conservative and liberal–that the minimum wage reduced employment, especially among younger and low-skill workers.<ref name="Card&Krueger">{{Cite book |last1=Card |first1=David |url=https://archive.org/details/mythmeasurement00davi |title=Myth and Measurement: The New Economics of the Minimum Wage |last2=Krueger |first2=Alan B. |publisher=Princeton University Press |year=1995 |pages=1, 6–7 |url-access=registration}}</ref> In addition to the basic supply-demand intuition, there were some empirical studies that supported this view. For example, [[Edward Gramlich]] in 1976 found that many of the benefits went to higher income families, and that teenagers were made worse off by the unemployment associated with the minimum wage.<ref>{{Cite journal |last1=Gramlich |first1=Edward M. |last2=Flanagan |first2=Robert J. |last3=Wachter |first3=Michael L. |year=1976 |title=Impact of Minimum Wages on Other Wages, Employment, and Family Incomes |url=https://www.brookings.edu/wp-content/uploads/1976/06/1976b_bpea_gramlich_flanagan_wachter.pdf |journal=Brookings Papers on Economic Activity |volume=1976 |issue=2 |pages=409–61 |doi=10.2307/2534380 |jstor=2534380}}</ref>

Brown et al. (1983) noted that, to that point, time-series studies had found that a 10 percent increase in the minimum wage was associated with a 1–3 percent decrease in teenage employment. However, the studies found wider variation, from 0 to over 3 percent, in their estimates for the effect on teenage unemployment (teenagers without a job and looking for one). In contrast to the simple supply and demand diagram, it was commonly found that teenagers withdrew from the labor force in response to the minimum wage, which produced the possibility of equal reductions in the supply as well as the demand for labor at a higher minimum wage, and hence no impact on the unemployment rate. Using a variety of specifications of the employment and unemployment equations (using [[ordinary least squares]] vs. [[generalized least squares]] [[Regression analysis|regression procedures]], and linear vs. logarithmic specifications), they found that a 10 percent increase in the minimum wage caused a 1 percent decrease in teenage employment, and no change in the teenage unemployment rate. The study also found a small but statistically significant increase in unemployment among adults aged 20–24.<ref>{{Cite journal |last1=Brown |first1=Charles |last2=Gilroy |first2=Curtis |last3=Kohen |first3=Andrew |date=Winter 1983 |title=Time-Series Evidence of the Effect of the Minimum Wage on Youth Employment and Unemployment |url=http://www.nber.org/papers/w0790.pdf |journal=The Journal of Human Resources |volume=18 |issue=1 |pages=3–31 |doi=10.2307/145654 |jstor=145654 |s2cid=153935325}}</ref> [[File:CBO Projected Effects of Minimum Wage Increases v1.png|thumb|right|CBO table illustrating projections of the effects of minimum wage increases on employment and income, under two scenarios]]

Wellington (1991) updated Brown et al.'s research with data through 1986 to provide new estimates encompassing a period when the real (i.e., inflation-adjusted) value of the minimum wage was declining, because it had not increased since 1981. She found that a 10% increase in the minimum wage decreased absolute teenage employment by 0.6%, with no effect on the teen or young-adult unemployment rates.<ref>{{Cite journal |last=Wellington |first=Alison J. |date=Winter 1991 |title=Effects of the Minimum Wage on the Employment Status of Youths: An Update |journal=The Journal of Human Resources |volume=26 |issue=1 |pages=27–46 |doi=10.2307/145715 |jstor=145715}}</ref>

Some research suggests that other factors dominate the unemployment effects of small increases in the minimum wage.<ref>{{Cite web |last=Fox |first=Liana |date=24 October 2006 |title=Minimum wage trends: Understanding past and contemporary research |url=http://www.epi.org/content.cfm/bp178 |url-status=live |archive-url=https://web.archive.org/web/20081216010154/http://www.epi.org/content.cfm/bp178 |archive-date=16 December 2008 |access-date=6 December 2013 |publisher=Economic Policy Institute}}</ref> In Florida, where voters approved an increase in 2004, a follow-up comprehensive study after the increase confirmed a strong economy with increased employment above previous years in Florida and better than in the US as a whole.<ref>{{Cite web |title=The Florida Minimum Wage: Good for Workers, Good for the Economy |url=http://www.risep-fiu.org/wp-content/uploads/2012/02/FL-Minimum-Wage.pdf |url-status=dead |archive-url=https://web.archive.org/web/20130622155415/http://www.risep-fiu.org/wp-content/uploads/2012/02/FL-Minimum-Wage.pdf |archive-date=22 June 2013 |access-date=3 November 2013}}</ref> When it comes to on-the-job training, some believe the increase in wages is taken out of training expenses. A 2001 empirical study found that there is "no evidence that minimum wages reduce training, and little evidence that they tend to increase training".<ref>{{Cite web |last1=Acemoglu |first1=Daron |last2=Pischke |first2=Jörn-Steffen |date=November 2001 |title=Minimum Wages and On-the-Job Training |url=http://ftp.iza.org/dp384.pdf |url-status=live |archive-url=https://web.archive.org/web/20170525162850/http://ftp.iza.org/dp384.pdf |archive-date=25 May 2017 |access-date=6 December 2013 |website=[[Institute for the Study of Labor]] |ssrn=288292}} Also published as {{cite book |doi=10.1016/S0147-9121(03)22005-7 |chapter=Minimum Wages and On-the-job Training |title=Worker Well-Being and Public Policy |series=Research in Labor Economics |year=2003 |last1=Acemoglu |first1=Daron |last2=Pischke |first2=Jörn-Steffen |isbn=978-0-76231-026-5 |volume=22 |pages=159–202 |editor1-first=Solomon W. |editor1-last=Polachek|hdl=1721.1/63851 |chapter-url=http://cep.lse.ac.uk/pubs/download/DP0527.pdf |url=http://www.nber.org/papers/w7184.pdf }}</ref>

''[[The Economist]]'' wrote in December 2013: "A minimum wage, providing it is not set too high, could thus boost pay with no ill effects on jobs....America's federal minimum wage, at 38% of [[median income]], is one of the rich world's lowest. Some studies find no harm to employment from federal or state minimum wages, others see a small one, but none finds any serious damage. ... High minimum wages, however, particularly in rigid labour markets, do appear to hit employment. France has the rich world's highest wage floor, at more than 60% of the median for adults and a far bigger fraction of the typical wage for the young. This helps explain why France also has shockingly high rates of [[youth unemployment]]: 26% for 15- to 24-year-olds."<ref>{{Cite news |date=14 December 2013 |title=The logical floor |url=https://www.economist.com/news/leaders/21591593-moderate-minimum-wages-do-more-good-harm-they-should-be-set-technocrats-not |url-status=live |archive-url=https://web.archive.org/web/20170801064646/http://www.economist.com/news/leaders/21591593-moderate-minimum-wages-do-more-good-harm-they-should-be-set-technocrats-not |archive-date=1 August 2017 |newspaper=The Economist}}</ref>

A 2019 study in the ''Quarterly Journal of Economics'' found that minimum wage increases did not affect the overall number of low-wage jobs in the five years following the wage increase. However, it did find disemployment in 'tradable' sectors, defined as those sectors most reliant on entry-level or low-skilled labor.<ref>{{Cite journal |last1=Zipperer |first1=Ben |last2=Lindner |first2=Attila |last3=Dube |first3=Arindrajit |last4=Cengiz |first4=Doruk |year=2019 |title=The Effect of Minimum Wages on Low-Wage Jobs |journal=The Quarterly Journal of Economics |volume=134 |issue=3 |pages=1405–1454 |doi=10.1093/qje/qjz014 |doi-access=free}}</ref>

A 2018 study published by the University of California agrees with the study in the ''Quarterly Journal of Economics''; it finds that minimum wages actually lead to fewer jobs for low-skilled workers. The article discusses a trade-off for low- to high-skilled workers: when the minimum wage is increased, GDP is more heavily redistributed toward high-academia jobs.<ref>{{Cite journal |last=Neumark |first=David |date=13 December 2018 |title=Employment effects of minimum wages |url=https://wol.iza.org/articles/employment-effects-of-minimum-wages/long |journal=IZA World of Labor |language=en-US |doi=10.15185/izawol.6 |doi-access=free|url-access=subscription }}</ref>

In another study, which shared authors with the above, published in the ''American Economic Review'', found that a large and persistent increase in the minimum wage in Hungary produced some disemployment, with the large majority of additional cost being passed on to consumers. The authors also found that firms began substituting capital for labor over time.<ref>{{Cite journal |last1=Harasztosi |first1=Péter |last2=Lindner |first2=Attila |date=August 2019 |title=Who Pays the Minimum Wage? |url=https://www.aeaweb.org/articles?id=10.1257/aer.20171445&&from=f |journal=American Economic Review |volume=109 |issue=8 |pages=2693–2727 |doi=10.1093/qje/qjz014 |doi-access=free}}</ref>

A 2013 study published in the ''ScienceDirect'' journal agrees with the studies above, reporting that there is no significant change in employment due to increases in the minimum wage. The study illustrates that there is limited national generalisability of minimum wage effects; findings from one country are often generalised to other countries. The effect on employment can be low from minimum-wage policies, but these policies can also benefit welfare and poverty.<ref>{{Cite journal |last1=Mărginean |first1=Silvia |last2=Chenic |first2=Alina Ştefania |date=1 January 2013 |title=Effects of Raising Minimum Wage: Theory, Evidence and Future Challenges |journal=Procedia Economics and Finance |series=International Economic Conference of Sibiu 2013 Post Crisis Economy: Challenges and Opportunities, IECS 2013 |language=en |volume=6 |pages=96–102 |doi=10.1016/S2212-5671(13)00119-6 |issn=2212-5671 |doi-access=free}}</ref>

=== David Card and Alan Krueger ===
In 1992, the minimum wage in New Jersey increased from $4.25 to $5.05 per hour (an 18.8% increase), while in the adjacent state of Pennsylvania, it remained at $4.25. [[David Card]] and [[Alan Krueger]] gathered information on fast food restaurants in New Jersey and eastern Pennsylvania in an attempt to see what effect this increase had on employment within New Jersey via a [[Difference in differences]] model. A basic supply-and-demand model predicts that relative employment should have decreased in New Jersey. Card and Krueger surveyed employers before the April 1992 New Jersey increase, and again in November–December 1992, asking managers for data on the full-time equivalent staff level of their restaurants both times.<ref name="Card & Krueger 1994">{{Cite journal |last1=Card |first1=David |last2=Krueger |first2=Alan B. |date=September 1994 |title=Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania |url=http://arks.princeton.edu/ark:/88435/dsp017d278t020 |journal=The American Economic Review |volume=84 |issue=4 |pages=772–93 |jstor=2118030}}</ref> Based on data from the employers' responses, the authors concluded that the increase in the minimum wage slightly increased employment in the New Jersey restaurants.<ref name="Card & Krueger 1994" />

Card and Krueger expanded on this initial article in their 1995 book ''Myth and Measurement: The New Economics of the Minimum Wage''.<ref>{{Cite book |last1=Card |first1=David E. |title=Myth and measurement: the new economics of the minimum wage |last2=Krueger |first2=Alan B. |date=2016 |publisher=Princeton University Press |isbn=9780691169125 |edition=Twentieth-anniversary |location=Princeton, New Jersey}}</ref> They argued that the negative employment effects of minimum wage laws are minimal if not non-existent. For example, they look at the 1992 increase in New Jersey's minimum wage, the 1988 rise in California's minimum wage, and the 1990–91 increases in the federal minimum wage. In addition to their own findings, they reanalyzed earlier studies using updated data, generally finding that the earlier negative employment effects did not hold up in the larger datasets.<ref>{{Cite journal |last1=Card |last2=Krueger |year=2000 |title=Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply |journal=American Economic Review |volume=90 |issue=5 |pages=1397–420 |doi=10.1257/aer.90.5.1397 |s2cid=1140202}}</ref> This had major implications on policy, challenging long-held economic views that increasing minimum wage led to [[deadweight loss]].

=== Research after Card's and Krueger's work ===
[[File:Minimum wage effects across state borders, estimates using contiguous counties.jpg|thumb|upright=1.4|A 2010 study published in the ''[[Review of Economics and Statistics]]'' compared 288 pairs of contiguous U.S. counties with minimum wage differentials from 1990 to 2006 and found no adverse employment effects from a minimum wage increase. Contiguous counties with different minimum wages are in purple. All other counties are in white.<ref>{{Cite journal |last1=Dube |first1=Arindrajit |last2=Lester |first2=T. William |last3=Reich |first3=Michael |date=November 2010 |title=Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties |url=http://escholarship.org/uc/item/86w5m90m |journal=Review of Economics and Statistics |volume=92 |issue=4 |pages=945–964 |citeseerx=10.1.1.372.5805 |doi=10.1162/REST_a_00039 |bibcode=2010RvE&S..92..945D |s2cid=6147409 |access-date=10 March 2014}}</ref>]]
In 1996, [[David Neumark]] and William Wascher reexamined Card and Krueger's results using payroll records from large fast-food chains and reported that minimum wage increases led to decreases in employment. Their initial findings did not contradict Card and Krueger, but a later version showed a four percent decrease in employment, with statistically significant disemployment effects in some cases.<ref name="AER">{{Cite journal |last1=Neumark |first1=David |last2=Wascher |first2=William |date=December 2000 |title=Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment |journal=The American Economic Review |volume=90 |issue=5 |pages=1362–96 |doi=10.1257/aer.90.5.1362 |jstor=2677855}}</ref> Card and Krueger rebutted these conclusions in a 2000 paper.<ref>Card and Krueger (2000) "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply" American Economic Review, Volume 90 No. 5. pg 1397–1420</ref>

A 2011 paper reconciled differences between datasets, showing positive employment effects for small restaurants but negative effects for large fast-food chains.<ref>{{Cite journal |last=Ropponen |first=Olli |year=2011 |title=Reconciling the evidence of Card and Krueger (1994) and Neumark and Wascher (2000) |journal=Journal of Applied Econometrics |volume=26 |issue=6 |pages=1051–1057 |doi=10.1002/jae.1258 |hdl=10138/26140 |hdl-access=free}}</ref> A 2014 analysis found that minimum wage reduces employment among teenagers.<ref>{{Cite journal |last1=Neumark |first1=David |last2=Salas |first2=J. M. Ian |last3=Wascher |first3=William |year=2014 |title=Revisiting the Minimum Wage—Employment Debate: Throwing Out the Baby with the Bathwater? |url=https://econpapers.repec.org/RePEc:iza:izadps:dp7166 |journal=ILR Review |volume=67 |issue=3_suppl |pages=608–648 |doi=10.1177/00197939140670S307 |hdl=10419/69384 |s2cid=7119756 |hdl-access=free}}</ref>

A 2010 study using Card and Krueger's methodology supported their original findings, showing no negative effects on low-wage employment.<ref name="Dube">{{Cite journal |last1=Dube |first1=Arindrajit |last2=Lester |first2=T. William |last3=Reich |first3=Michael |date=November 2010 |title=Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties |url=http://www.irle.berkeley.edu/workingpapers/157-07.pdf |url-status=dead |journal=The Review of Economics and Statistics |volume=92 |issue=4 |pages=945–64 |citeseerx=10.1.1.372.5805 |doi=10.1162/REST_a_00039 |bibcode=2010RvE&S..92..945D |s2cid=6147409 |archive-url=https://web.archive.org/web/20130112214949/http://www.irle.berkeley.edu/workingpapers/157-07.pdf |archive-date=12 January 2013 |access-date=13 February 2013}}</ref>

A 2011 study by Baskaya and Rubinstein found that federal minimum wage increases negatively impacted employment, particularly among teenagers.<ref>{{Cite news |date=1 October 2011 |title=Using Federal Minimum Wages to Identify the Impact of Minimum Wages on Employment and Earnings Across the U.S. States |url=http://innovation-archives.berkeley.edu/businessinnovation/WilliamsonSeminar/rubinstein110311.pdf |url-status=dead |archive-url=https://web.archive.org/web/20190626081608/http://innovation-archives.berkeley.edu/businessinnovation/WilliamsonSeminar/rubinstein110311.pdf |archive-date=26 June 2019 |access-date=20 February 2016}}</ref> Other studies, including a 2012 study by Sabia, Hansen, and Burkhauser, found substantial adverse effects on low-skilled employment, particularly among young workers.<ref>{{Cite journal |last1=Sabia |first1=Joseph J. |last2=Burkhauser |first2=Richard V. |last3=Hansen |first3=Benjamin |date=April 2012 |title=Are the Effects of Minimum Wage Increases Always Small? New Evidence from a Case Study of New York State |journal=Industrial and Labor Relations Review |volume=65 |issue=2 |pages=350–376 |doi=10.1177/001979391206500207 |s2cid=154006386 |ssrn=2083088}}</ref>

A 2019 paper in the Quarterly Journal of Economics argued that job losses in studies like those by Meer and West, who found that a minimum wage "significantly reduces rates of job growth", are driven by unrealistic assumptions and that the effects of the minimum wage are more complex.<ref>{{Cite journal |last1=Zipperer |first1=Ben |last2=Lindner |first2=Attila |last3=Dube |first3=Arindrajit |last4=Cengiz |first4=Doruk |date=1 August 2019 |title=The Effect of Minimum Wages on Low-Wage Jobs |journal=The Quarterly Journal of Economics |volume=134 |issue=3 |pages=1405–1454 |doi=10.1093/qje/qjz014 |issn=0033-5533 |doi-access=free}}</ref> Another 2013 study by Fang and Lin found significant adverse effects on employment in China, particularly among women, young adults, and low-skilled workers.<ref>{{Cite journal |last1=Fang |first1=Tony |last2=Lin |first2=Carl |date=27 November 2015 |title=Minimum wages and employment in China |journal=IZA Journal of Labor Policy |volume=4 |issue=1 |page=22 |doi=10.1186/s40173-015-0050-9 |issn=2193-9004 |s2cid=150535897 |doi-access=free|hdl=10419/154720 |hdl-access=free }}</ref>

A 2017 study in Seattle found that raising the minimum wage to $13 per hour reduced the incomes of low-wage workers because they worked fewer hours as businesses adjusted to higher labor costs.<ref>{{Cite journal |last1=Ekaterina Jardim |last2=Mark C. Long |last3=Robert Plotnick |last4=Emma van Inwegen |last5=Jacob Vigdor |last6=Hilary Wething |date=June 2017 |title=Minimum Wage Increases, wages, and low-wage employment: Evidence from Seattle |url=https://evans.uw.edu/sites/default/files/NBER%20Working%20Paper.pdf |url-status=dead |journal=NBER Working Paper Series |publisher=National Bureau of Economic Research |id=Working Paper 23532 |archive-url=https://web.archive.org/web/20200620213444/https://evans.uw.edu/sites/default/files/NBER%20Working%20Paper.pdf |archive-date=20 June 2020 |access-date=15 April 2019}}</ref> A 2019 study in Arizona suggested that smaller minimum wage increases might lead to slight economic growth without significantly distorting labor markets.<ref>{{Cite journal |last=Overstreet |first=Dallin |date=2019 |title=The Effect of Minimum Wage on Per Capita Income in Arizona: Empirical Analysis |journal=Poverty & Public Policy |volume=11 |issue=1–2 |pages=156–168 |doi=10.1002/pop4.249 |s2cid=201370630}}</ref>

In 2019, economists from Georgia Tech found that minimum wage increases could harm small businesses by increasing bankruptcy rates and reducing hiring, with significant impacts on minority-owned businesses.<ref name="Financial Stress">{{Cite journal |last1=Chava |first1=Sudheer |last2=Oettl |first2=Alexander |last3=Singh |first3=Manpreet |date=December 2019 |title=Does a One-Size-Fits-All Minimum Wage Cause Financial Stress for Small Businesses? |url=https://www.nber.org/papers/w26523 |journal=NBER Working Paper Series |series=Working Paper Series |publisher=National Bureau of Economic Research |doi=10.3386/w26523 |s2cid=226896414 |id=Working Paper 26523 |doi-access=free}}</ref>

The Congressional Budget Office's 2019 report on a proposed $15 federal minimum wage predicted modest improvements in take-home pay for those who retained employment but warned of potential job losses, reduced hours, and increased costs of goods and services.<ref name="2019 Congressional Budget Office">{{Cite report |url=https://www.cbo.gov/system/files/2019-07/CBO-55410-MinimumWage2019.pdf |title=The Effects on Employment and Family Income of Increasing the Federal Minimum Wage |date=July 2019 |website=Congressional Budget Office}}</ref> Similarly, a 2019 study found that increasing the minimum wage could lead to increased crime among young adults.<ref name="Minimum Wage and Crime">{{Cite journal |last=Fone |first=Zachary |date=March 2019 |title=Do Minimum Wage Increases Reduce Crime? |url=https://www.nber.org/papers/w25647#fromrss |journal=National Bureau of Economic Research |series=Working Paper Series |location=Cambridge, MA |doi=10.3386/w25647 |s2cid=159235513|url-access=subscription }}</ref>

Studies from Denmark and Spain further highlighted that significant increases in the minimum wage could lead to substantial job losses, particularly among young workers.<ref name="Denmark Discontinuity">{{Cite journal |last=Kreiner |first=Claus |year=2020 |title=Do Lower Minimum Wages for Young Workers Raise Their Employment? Evidence From a Danish Discontinuity |journal=The Review of Economics and Statistics |volume=102 |issue=2 |pages=339–354 |doi=10.1162/rest_a_00825 |s2cid=67875494 |doi-access=free}}</ref><ref>{{Cite news |title=El Banco de España calcula que la subida del salario mínimo en 2019 restó al menos 100.000 empleos |url=https://elpais.com/economia/2021-06-08/el-banco-de-espana-calcula-que-la-subida-del-salario-minimo-en-2019-resto-al-menos-100000-empleos.html |work=El Pais}}</ref> A 2021 study on Germany's minimum wage found that while wages increased without reducing employment, there were significant structural shifts in the economy, including reduced competition and increased commuting times for workers.<ref>{{Cite journal |last1=Dustmann |first1=Christian |last2=Lindner |first2=Attila |last3=Schönberg |first3=Uta |author-link3=Uta Schönberg |last4=Umkehrer |first4=Matthias |last5=vom Berge |first5=Philipp |date=2021 |title=Reallocation Effects of the Minimum Wage |journal=The Quarterly Journal of Economics |volume=137 |issue=1 |pages=267–328 |doi=10.1093/qje/qjab028 |issn=0033-5533 |doi-access=free}}</ref>

A 2010 study on the UK minimum wage found that it did not cause immediate price increases but led to faster price rises in sectors with many low-wage workers over the long term.<ref name=":1" /> A 2012 UK study (1997–2007) found the minimum wage reduced wage inequality and had neutral to positive effects on employment.<ref>{{Cite journal |last1=Dolton |first1=Peter |last2=Bondibene |first2=Chiara Rosazza |last3=Wadsworth |first3=Jonathan |date=February 2012 |title=Employment, Inequality and the UK National Minimum Wage over the Medium-Term * |url=https://onlinelibrary.wiley.com/doi/10.1111/j.1468-0084.2011.00653.x |journal=Oxford Bulletin of Economics and Statistics |language=en |volume=74 |issue=1 |pages=78–106 |doi=10.1111/j.1468-0084.2011.00653.x |issn=0305-9049 |s2cid=22523803}}</ref> Another 2012 UK study found no "spill-over" effects from the minimum wage on higher-earning brackets.<ref>{{Cite journal |last=Stewart |first=Mark B. |date=2012 |title=Wage inequality, minimum wage effects, and spillovers |url=https://www.jstor.org/stable/41683136 |journal=Oxford Economic Papers |volume=64 |issue=4 |pages=616–634 |doi=10.1093/oep/gps003 |issn=0030-7653 |jstor=41683136}}</ref> A 2016 US study associated the minimum wage with reduced wage inequality and possible spill-over effects, though these might be due to measurement error.<ref>{{Cite journal |last1=Autor |first1=David |last2=Manning |last3=Smith |date=January 2016 |title=The Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment |url=https://dspace.mit.edu/bitstream/handle/1721.1/103999/Autor_The%20contribution.pdf?sequence=1&isAllowed=y |journal=The American Economic Review |volume=103 |issue=6 |pages=2121–2168 |doi=10.1257/aer.103.6.2121 |hdl=1721.1/95952 |archive-url=https://web.archive.org/web/20240117132631/https://dspace.mit.edu/bitstream/handle/1721.1/103999/Autor_The%20contribution.pdf?sequence=1&isAllowed=y |archive-date=17 January 2024 |via=MIT Open Access Articles}}</ref>

=== Meta-analyses ===
* A 2013 meta-analysis of 16 UK studies found no significant employment effects from the minimum wage.<ref>{{Cite journal |last1=Megan de Linde Leonard |last2=T. D. Stanley |last3=Hristos Doucouliagos |date=September 2014 |title=Does the UK Minimum Wage Reduce Employment? A Meta-Regression Analysis |journal=British Journal of Industrial Relations |volume=52 |issue=3 |pages=499–520 |doi=10.1111/bjir.12031 |s2cid=35174753}}</ref>
* A 2007 meta-analysis by Neumark found a consistent, though not always significant, negative effect on employment.<ref>{{Cite journal |last1=David Neumark |last2=William Wascher |date=2007 |title=Minimum Wages and Employment |url=http://www.nber.org/papers/w12663.pdf |journal=Foundations and Trends in Microeconomics |volume=3 |issue=1–2 |pages=1–182}}</ref>
* A 2019 meta-analysis of developed countries reported minimal employment effects and significant earnings increases for low-paid workers.<ref name=":2" />

In 1995, Card and Krueger noted evidence of publication bias in time-series studies of minimum wages, favoring studies showing negative employment effects.<ref>{{Cite journal |last1=Card |first1=David |last2=Krueger |first2=Alan B. |date=May 1995 |title=Time-Series Minimum-Wage Studies: A Meta-analysis |journal=The American Economic Review |volume=85 |issue=2 |pages=238–43 |jstor=2117925}}</ref> A 2005 study by T.D. Stanley confirmed this bias and suggested no clear link between the minimum wage and unemployment.<ref>{{Cite journal |last=Stanley |first=T. D. |year=2005 |title=Beyond Publication Bias |journal=Journal of Economic Surveys |volume=19 |issue=3 |page=309 |doi=10.1111/j.0950-0804.2005.00250.x |s2cid=153607754 }}</ref> A 2008 meta-analysis by Doucouliagos and Stanley supported Card and Krueger's findings, showing little to no negative association between minimum wages and employment after correcting for publication bias.<ref>{{Cite journal |last1=Doucouliagos |first1=Hristos |last2=Stanley |first2=T. D. |year=2009 |title=Publication Selection Bias in Minimum-Wage Research? A Meta-Regression Analysis |journal=British Journal of Industrial Relations |volume=47 |issue=2 |pages=406–28 |doi=10.1111/j.1467-8543.2009.00723.x |s2cid=153464294}}</ref>

== Debate over consequences ==
[[File:Fight for $15 on 4-15 (17161520871).jpg|thumb|right|Protesters in [[New York City]] call for an increased minimum wage as part of the "[[Fight for $15]]" movement to require a US$15 per hour minimum wage, 2015.|upright=1.15]]
Minimum wage laws affect workers in most low-paid fields of employment<ref name="Neumark" /> and have usually been judged against the criterion of reducing poverty.<ref name="Palgrave1987">{{Cite book |last1=Eatwell |first1=John |title=The New Palgrave: A Dictionary of Economics |last2=Murray Milgate |last3=Peter Newman |publisher=The Macmillan Press Limited |year=1987 |isbn=978-0-333-37235-7 |location=London |pages=476–78}}</ref> Minimum wage laws receive less support from economists than from the general public. Despite decades of experience and economic research, debates about the costs and benefits of minimum wages continue today.<ref name="Neumark" />

Various groups have great ideological, political, financial, and emotional investments in issues surrounding minimum wage laws. For example, agencies that administer the laws have a vested interest in showing that "their" laws do not create unemployment, as do labor unions whose members' finances are protected by minimum wage laws. On the other side of the issue, low-wage employers such as restaurants finance the Employment Policies Institute, which has released numerous studies opposing the minimum wage.<ref>{{Cite news |last=Bernstein |first=Harry |date=15 September 1992 |title=Troubling Facts on Employment |url=https://www.latimes.com/archives/la-xpm-1992-09-15-fi-836-story.html |url-status=live |archive-url=https://web.archive.org/web/20131217204239/http://articles.latimes.com/1992-09-15/business/fi-836_1_part-time-jobs |archive-date=17 December 2013 |access-date=6 December 2013 |work=Los Angeles Times |page=D3}}</ref><ref>{{Cite journal |last=Engquist |first=Erik |date=May 2006 |title=Health bill fight nears showdown |journal=Crain's New York Business |volume=22 |issue=20 |page=1}}</ref> The presence of these powerful groups and factors means that the debate on the issue is not always based on dispassionate analysis. Additionally, it is extraordinarily difficult to separate the effects of the minimum wage from other variables that affect employment.<ref name="SowellBasic" />

Studies have found that minimum wages have the following positive effects:
* Improves the functioning of the low-wage labor market, which may be characterized by employer-side market power (monopsony).<ref>{{Cite SSRN |ssrn=3416016 |first=Till |last=Von Wachter |first2=Bledi |last2=Taska |title=Minimum Wage Employment Effects and Labor Market Concentration |date=5 July 2019 |last3=Marinescu |first3=Ioana Elena |last4=Huet-Vaughn |first4=Emiliano |last5=Azar |first5=José}}</ref><ref>{{Cite journal |last1=Dube |first1=Arindrajit |last2=Lester |first2=T. William |last3=Reich |first3=Michael |date=21 December 2015 |title=Minimum Wage Shocks, Employment Flows, and Labor Market Frictions |url=https://escholarship.org/uc/item/27z0006g |journal=Journal of Labor Economics |volume=34 |issue=3 |pages=663–704 |doi=10.1086/685449 |issn=0734-306X |s2cid=9801353}}</ref>
*Raises family incomes at the bottom of the income distribution, and lowers poverty.<ref>{{Cite journal |last1=Rinz |first1=Kevin |last2=Voorheis |first2=John |date=March 2018 |title=The Distributional Effects of Minimum Wages: Evidence from Linked Survey and Administrative Data |url=https://ideas.repec.org/p/cen/cpaper/2018-02.html |journal=Carra Working Papers |publisher=U.S. Census Bureau |via=Ideas}}</ref><ref>{{Cite journal |last=Dube |first=Arindrajit |year=2019 |title=Minimum Wages and the Distribution of Family Incomes |journal=American Economic Journal: Applied Economics |volume=11 |issue=4 |pages=268–304 |doi=10.1257/app.20170085 |issn=1945-7782 |doi-access=free}}</ref>
* Positive impact on small business owners and industry.<ref>{{Cite web |title=Holly Sklar, Small Businesses Want Minimum Wage Increase – Business For a Fair Minimum Wage |url=http://www.businessforafairminimumwage.org/news/00598/st-louis-post-dispatch-holly-sklar-small-businesses-want-minimum-wage-increase |url-status=live |archive-url=https://web.archive.org/web/20150117160937/http://www.businessforafairminimumwage.org/news/00598/st-louis-post-dispatch-holly-sklar-small-businesses-want-minimum-wage-increase |archive-date=17 January 2015 |publisher=St. Louis Post Dispatch}}</ref>
* Encourages education,<ref>{{Cite journal |last=Sutch |first=Richard |date=September 2010 |title=The Unexpected Long-Run Impact of the Minimum Wage: An Educational Cascade |journal=NBER Working Paper No. 16355 |location=Cambridge, MA |doi=10.3386/w16355 |doi-access=free}}</ref> resulting in better-paying jobs.
* Increases incentives to take jobs, as opposed to other methods of transferring income to the poor that are not tied to employment (such as food subsidies for the poor or welfare payments for the unemployed).<ref name="freeman paper">{{Cite journal |last=Freeman |first=Richard B. |year=1994 |title=Minimum Wages – Again! |journal=International Journal of Manpower |volume=15 |issue=2 |pages=8–25 |doi=10.1108/01437729410059305}}</ref>
* Increased job growth and creation.<ref name="cepr.net">{{Cite web |last=Wolcott |first=Ben |date=30 June 2014 |title=2014 Job Creation Faster in States that Raised the Minimum Wage |url=http://www.cepr.net/index.php/blogs/cepr-blog/2014-job-creation-in-states-that-raised-the-minimum-wage |url-status=live |archive-url=https://web.archive.org/web/20141020223951/http://www.cepr.net/index.php/blogs/cepr-blog/2014-job-creation-in-states-that-raised-the-minimum-wage |archive-date=20 October 2014}}</ref><ref name="Bloomberg1">{{Cite news |last=Stilwell |first=Victoria |date=8 March 2014 |title=Highest Minimum-Wage State Washington Beats U.S. in Job Creation |url=https://www.bloomberg.com/news/2014-03-05/washington-shows-highest-minimum-wage-state-beats-u-s-with-jobs.html |url-status=live |archive-url=https://web.archive.org/web/20150110111227/http://www.bloomberg.com/news/2014-03-05/washington-shows-highest-minimum-wage-state-beats-u-s-with-jobs.html |archive-date=10 January 2015 |work=Bloomberg}}; [https://www.theatlantic.com/business/archive/2013/12/would-increasing-the-minimum-wage-create-jobs/282577/ "Would Increasing the Minimum Wage Create Jobs?"], ''[[The Atlantic]]'', Jordan Weissmann, 20 December 2013; [https://www.theguardian.com/commentisfree/2017/may/10/the-guardian-view-on-raising-the-minimum-wage-slowly-does-it "The Guardian view on raising the minimum wage: slowly does it"], Editorial, ''[[The Guardian]]'', 10 May 2017</ref>
* Encourages efficiency and [[automation]] of industry.<ref>[[Bernard Semmel]], ''Imperialism and Social Reform: English Social-Imperial Thought 1895–1914'' (London: Allen and Unwin, 1960), p. 63.</ref>
* Removes low-paying jobs, forcing workers to train for, and move to, higher-paying jobs.<ref>{{Cite press release |title=ITIF Report Shows Self-service Technology a New Force in Economic Life |date=14 April 2010 |url=http://www.itif.org/pressrelease/itif-report-shows-self-service-technology-new-force-economic-life |access-date=5 October 2011 |url-status=live |archive-url=https://web.archive.org/web/20120119020955/http://www.itif.org/pressrelease/itif-report-shows-self-service-technology-new-force-economic-life |archive-date=19 January 2012 |website=The Information Technology & Innovation Foundation}}</ref><ref>{{Cite SSRN |ssrn=936346 |first=Alberto F. |last=Alesina |first2=Joseph |last2=Zeira |title=Technology and Labor Regulations |year=2006}}</ref>
* Increases technological development. Costly technology that increases business efficiency is more appealing as the price of labor increases.<ref>{{Cite web |date=7 March 2008 |title=Minimum Wages in canada: theory, evidence and policy |url=http://www.hrsdc.gc.ca/eng/labour/employment_standards/fls/research/research11/page03.shtml |url-status=live |archive-url=https://web.archive.org/web/20120402010131/http://www.hrsdc.gc.ca/eng/labour/employment_standards/fls/research/research11/page03.shtml |archive-date=2 April 2012 |access-date=5 October 2011 |publisher=Hrsdc.gc.ca}}</ref>
* Encourages people to join the workforce rather than pursuing money through illegal means, e.g., selling illegal drugs<ref>{{Cite SSRN |ssrn=545382 |first=Andrew |last=Kallem |title=Youth Crime and the Minimum Wage |year=2004}}</ref>

Studies have found the following negative effects:
* Minimum wage alone is not effective at alleviating poverty, and in fact produces a net increase in poverty due to disemployment effects.<ref>Kosteas, Vasilios D. "Minimum Wage." Encyclopedia of World Poverty. Ed. M. Odekon.Thousand Oaks, CA: Sage Publications, Inc., 2006. 719–21. SAGE knowledge. Web.</ref>
* As a labor market analogue of political-economic protectionism, it excludes low-cost competitors from labor markets and hampers firms in reducing wage costs during trade downturns. This generates various industrial-economic inefficiencies.<ref>{{Cite book |last=Abbott |first=Lewis F. |url=https://books.google.com/books?id=EZXStcdlFG8C |title=Statutory Minimum Wage Controls: A Critical Review of Their Effects on Labour Markets, Employment & Incomes |date=2012 |publisher=Industrial Systems Research |isbn=978-0-906321-22-5 |edition=2nd |language=en}}{{Dead link|date=September 2024 |bot=InternetArchiveBot |fix-attempted=yes }} {{page needed|date=December 2013}}</ref>
* Reduces the quantity demanded of workers, either through a reduction in the number of hours worked by individuals or through a reduction in the number of jobs.<ref>Tupy, Marian L. [http://www.nationalreview.com/comment/tupy200405140912.asp ''Minimum Interference''] {{webarchive|url=https://web.archive.org/web/20090218125417/http://nationalreview.com/comment/tupy200405140912.asp |date=18 February 2009 }}, National Review Online, 14 May 2004</ref><ref name="The Wages of Politics">{{Cite news |date=11 November 2006 |title=The Wages of Politics |url=https://online.wsj.com/news/articles/SB116320581226920449 |url-status=live |archive-url=https://web.archive.org/web/20131210232920/http://online.wsj.com/news/articles/SB116320581226920449 |archive-date=10 December 2013 |access-date=6 December 2013 |work=[[The Wall Street Journal]]}}</ref>
* [[Wage/price spiral]]
* Encourages employers to replace low-skilled workers with [[Automation|computers]], such as [[self-checkout]] machines.<ref>{{Cite web |last=Belvedere |first=Matthew |date=20 May 2016 |title=Worker pay vs automation tipping point may be coming, says this fast-food CEO |url=https://www.cnbc.com/2016/05/20/worker-pay-vs-automation-tipping-point-may-be-coming-says-this-fast-food-ceo.html |url-status=live |archive-url=https://web.archive.org/web/20161223062840/http://www.cnbc.com/2016/05/20/worker-pay-vs-automation-tipping-point-may-be-coming-says-this-fast-food-ceo.html |archive-date=23 December 2016 |access-date=22 December 2016 |website=CNBC}}</ref>
* Increases property crime and misery in poor communities by decreasing legal markets of production and consumption in those communities;<ref>{{Cite journal |last=Hashimoto |first=Masanori |year=1987 |title=The Minimum Wage Law and Youth Crimes: Time-Series Evidence |journal=The Journal of Law & Economics |volume=30 |issue=2 |pages=443–464 |doi=10.1086/467144 |jstor=725504 |s2cid=153649565}}</ref>
* Can result in the exclusion of certain groups (ethnic, gender, etc.) from the labor force.<ref>{{Cite book |last=Williams |first=Walter |url=https://archive.org/details/southafricaswara00will |title=South Africa's War Against Capitalism |publisher=Praeger |year=1989 |isbn=978-0-275-93179-7 |location=New York}}</ref>
* Is less effective than other methods (e.g., the [[Earned Income Tax Credit]]) at reducing poverty, and is more damaging to businesses than those other methods.<ref name="economist2006">{{Cite news |title=A blunt instrument |url=https://www.economist.com/united-states/2006/10/26/a-blunt-instrument |access-date=14 February 2023 |newspaper=The Economist |issn=0013-0613}}</ref>
* Discourages further education among people with low incomes by enticing people to enter the job market.<ref name="economist2006" />
* Discriminates against, through pricing out, less qualified workers (including newcomers to the labor market, e.g., young workers) by keeping them from accumulating work experience and qualifications, hence potentially graduating to higher wages later.<ref name="WSJ100309" />
* Slows growth in the creation of low-skilled jobs<ref name="MeerWest">{{Cite journal |last1=Meer |first1=Jonathan |last2=West |first2=Jeremy |year=2016 |title=Effects of the Minimum Wage on Employment Dynamics |journal=[[Journal of Human Resources]] |volume=51 |issue=2 |pages=500–522 |citeseerx=10.1.1.705.3838 |doi=10.3368/jhr.51.2.0414-6298R1 |s2cid=219236990}}</ref>
* Results in jobs moving to other areas or countries, which allow lower-cost labor.<ref>{{Cite web |last1=Milano |first1=Steve |title=Pros & Cons of Outsourcing Manufacturing Jobs |url=https://smallbusiness.chron.com/pros-amp-cons-outsourcing-manufacturing-jobs-40320.html |access-date=24 April 2019 |website=smallbusiness.chron.com}}</ref>
* Results in higher long-term unemployment.<ref>{{Cite journal |last1=Partridge |first1=M. D. |last2=Partridge |first2=J. S. |year=1999 |title=Do minimum wage hikes reduce employment? State-level evidence from the low-wage retail sector |journal=Journal of Labor Research |volume=20 |issue=3 |page=393 |doi=10.1007/s12122-999-1007-9 |s2cid=154560481}}</ref>
* Results in higher prices for consumers, where products and services are produced by minimum-wage workers<ref>{{Cite web |date=18 February 2014 |title=The Effects of a Minimum-Wage Increase on Employment and Family Income |url=http://www.cbo.gov/publication/44995 |url-status=live |archive-url=https://web.archive.org/web/20140725153738/http://cbo.gov/publication/44995 |archive-date=25 July 2014 |access-date=26 July 2014}}</ref> (though non-labor costs represent a greater proportion of costs to consumers in industries like fast food and discount retail)<ref>{{Cite web |last=Covert |first=Bryce |date=21 February 2014 |title=A $10.10 Minimum Wage Would Make A DVD At Walmart Cost One Cent More |url=http://thinkprogress.org/economy/2014/02/21/3317901/walmart-minimum-wage-prices/ |url-status=live |archive-url=https://web.archive.org/web/20140729075549/http://thinkprogress.org/economy/2014/02/21/3317901/walmart-minimum-wage-prices/ |archive-date=29 July 2014 |website=[[ThinkProgress]]}}</ref><ref>{{Cite web |last=Hoium |first=Travis |date=19 October 2016 |title=What Will a Minimum Wage Increase Cost You at McDonald's? |url=http://www.fool.com/investing/general/2014/06/08/what-will-a-higher-minimum-wage-cost-you-at-mcdona.aspx |url-status=live |archive-url=https://web.archive.org/web/20140723072611/http://www.fool.com/investing/general/2014/06/08/what-will-a-higher-minimum-wage-cost-you-at-mcdona.aspx |archive-date=23 July 2014 |website=The Motley Fool}}</ref>

A widely circulated argument that the minimum wage was ineffective at reducing poverty was provided by [[George Stigler]] in 1949:
* Employment may fall more than in proportion to the wage increase, thereby reducing overall earnings;
* As uncovered sectors of the economy absorb workers released from the covered sectors, the decrease in wages in the uncovered sectors may exceed the increase in wages in the covered ones;
* The impact of the minimum wage on family income distribution may be negative unless the fewer but better jobs are allocated to members of needy families rather than to, for example, teenagers from families not in poverty;
* Forbidding employers to pay less than a legal minimum is equivalent to forbidding workers from selling their labor for less than the minimum wage. The legal restriction that employers cannot pay less than a legislated wage is equivalent to the legal restriction that workers cannot work in the protected sector at all unless they can find employers willing to hire them at that wage.<ref name="Palgrave1987" /> That may be seen as a legal violation of [[Right to work|human right to work]] in its most basic interpretation as "a right to engage in productive employment, and not to be prevented from doing so".
In 2006, the [[International Labour Organization]] (ILO) argued that the minimum wage could not be directly linked to unemployment in countries that have suffered job losses.<ref name="ILO 2006" /> In April 2010, the [[Organisation for Economic Co-operation and Development]] (OECD) released a report arguing that countries could alleviate teen unemployment by "lowering the cost of employing low-skilled youth" through a sub-minimum training wage.<ref>Scarpetta, Stephano, Anne Sonnet and Thomas Manfredi, ''Rising Youth Unemployment During The Crisis: How To Prevent Negative Long-Term Consequences on a Generation?'', 14 April 2010 [http://www.olis.oecd.org/olis/2010doc.nsf/LinkTo/NT000028DE/$FILE/JT03281808.PDF (read-only PDF)] {{webarchive|url=https://web.archive.org/web/20101105115117/http://www.olis.oecd.org/olis/2010doc.nsf/LinkTo/NT000028DE/$FILE/JT03281808.PDF |date=5 November 2010 }}</ref> A study of U.S. states showed that businesses' annual and average payrolls grow faster and employment grew at a faster rate in states with a minimum wage.<ref>Fiscal Policy Institute, "States with Minimum Wages Above the Federal Level have had Faster Small Business and Retail Job Growth," 30 March 2006.</ref> The study showed a correlation, but did not claim to prove causation.

Although strongly opposed by both the business community and the [[Conservative Party (UK)|Conservative Party]] when introduced in the UK in 1999, the Conservatives reversed their opposition in 2000.<ref>{{Cite web |title=National Minimum Wage |url=http://www.politics.co.uk/issue-briefs/economy/employment/national-minimum-wage/national-minimum-wage-$366581.htm |url-status=dead |archive-url=https://web.archive.org/web/20071201162434/http://www.politics.co.uk/issue-briefs/economy/employment/national-minimum-wage/national-minimum-wage-%24366581.htm |archive-date=1 December 2007 |access-date=29 December 2007 |publisher=politics.co.uk}}</ref> Accounts differ as to the effects of the minimum wage. The Centre for Economic Performance found no discernible impact on employment levels from the wage increases,<ref>{{Cite journal |last=Metcalf |first=David |date=April 2007 |title=Why Has the British National Minimum Wage Had Little or No Impact on Employment? |url=https://ideas.repec.org/p/cep/cepdps/dp0781.html |url-status=live |journal=Centre for Economic Performance |publisher=London School of Economics |archive-url=https://web.archive.org/web/20150921184859/https://ideas.repec.org/p/cep/cepdps/dp0781.html |archive-date=21 September 2015 |via=Ideas}}</ref> while the [[Low Pay Commission]] found that employers had reduced their rate of hiring and employee hours employed, and found ways to cause current workers to be more productive (especially service companies).<ref name="LPC 2005">Low Pay Commission (2005). [http://www.lowpay.gov.uk/lowpay/report/pdf/DTi-Min_Wage.pdf ''National Minimum Wage – Low Pay Commission Report 2005''] {{webarchive|url=https://web.archive.org/web/20130116084704/http://www.lowpay.gov.uk/lowpay/report/pdf/DTi-Min_Wage.pdf |date=16 January 2013 }}</ref> The [[Institute for the Study of Labor]] found prices in minimum wage sectors{{Efn|notably take-away foods, canteen meals, hotel services and domestic services}} rose faster than other sectors, especially in the four years after its introduction.<ref name=":1">{{Cite web |last=Wadsworth |first=Jonathan |date=September 2009 |title=Did the National Minimum Wage Affect UK Prices |url=ftp://repec.iza.org/RePEc/Discussionpaper/dp4433.pdf |url-status=dead |archive-url=https://web.archive.org/web/20170525162857/ftp://repec.iza.org/RePEc/Discussionpaper/dp4433.pdf |archive-date=25 May 2017 |access-date=8 June 2010}}</ref> Neither trade unions nor employer organizations contest the minimum wage, although the latter had especially done so heavily until 1999.

In 2014, supporters of minimum wage cited a study that found that job creation within the United States is faster in states that raised their minimum wages.<ref name="cepr.net" /><ref>{{Cite news |last=Neuman |first=Scott |date=19 July 2014 |title=States That Raised Minimum Wage See Faster Job Growth, Report Says |url=https://www.npr.org/blogs/thetwo-way/2014/07/19/332879409/states-that-raised-minimum-wage-see-faster-job-growth-report-says |url-status=live |archive-url=https://web.archive.org/web/20141025021348/http://www.npr.org/blogs/thetwo-way/2014/07/19/332879409/states-that-raised-minimum-wage-see-faster-job-growth-report-says |archive-date=25 October 2014 |work=NPR}}</ref><ref>{{Cite news |last=Rugaber |first=Christopher S. |date=19 July 2014 |title=States with higher minimum wage gain more jobs |url=https://www.usatoday.com/story/money/business/2014/07/19/us-states-with-higher-minimum-wages-gain-more-jobs/12879113/ |url-status=live |archive-url=https://web.archive.org/web/20170711172711/https://www.usatoday.com/story/money/business/2014/07/19/us-states-with-higher-minimum-wages-gain-more-jobs/12879113/ |archive-date=11 July 2017 |work=USA Today}}</ref> In 2014, supporters of minimum wage cited news organizations who reported the state with the highest minimum-wage garnered more job creation than the rest of the United States.<ref name="cepr.net" /><ref name="Bloomberg2">{{Cite news |last=Stilwell |first=Victoria |date=8 March 2014 |title=Highest Minimum-Wage State Washington Beats U.S. in Job Creation |url=https://www.bloomberg.com/news/2014-03-05/washington-shows-highest-minimum-wage-state-beats-u-s-with-jobs.html |url-status=live |archive-url=https://web.archive.org/web/20150110111227/http://www.bloomberg.com/news/2014-03-05/washington-shows-highest-minimum-wage-state-beats-u-s-with-jobs.html |archive-date=10 January 2015 |work=Bloomberg}}</ref><ref>{{Cite news |last=Lobosco |first=Katie |date=14 May 2014 |title=Washington state defies minimum wage logic |url=http://money.cnn.com/2014/05/14/smallbusiness/minimum-wage-washington-jobs/ |url-status=dead |archive-url=https://web.archive.org/web/20141025013846/http://money.cnn.com/2014/05/14/smallbusiness/minimum-wage-washington-jobs/ |archive-date=25 October 2014 |work=CNN}}</ref><ref>{{Cite web |date=5 March 2014 |title=Did Washington State's Minimum Wage Bet Pay Off? |url=http://www.ibtimes.com/minimum-wage-washington-after-16-years-state-highest-minimum-wage-maintains-lower-unemployment |url-status=live |archive-url=https://web.archive.org/web/20141120115641/http://www.ibtimes.com/minimum-wage-washington-after-16-years-state-highest-minimum-wage-maintains-lower-unemployment |archive-date=20 November 2014 |website=[[International Business Times]]}}</ref><ref>{{Cite news |last=Meyerson |first=Harold |date=21 May 2014 |title=Harold Meyerson: A higher minimum wage may actually boost job creation |url=https://www.washingtonpost.com/opinions/harold-meyerson-a-higher-minimum-wage-may-actually-boost-job-creation/2014/05/21/463bd80e-e112-11e3-9743-bb9b59cde7b9_story.html |url-status=live |archive-url=https://web.archive.org/web/20170718224448/https://www.washingtonpost.com/opinions/harold-meyerson-a-higher-minimum-wage-may-actually-boost-job-creation/2014/05/21/463bd80e-e112-11e3-9743-bb9b59cde7b9_story.html |archive-date=18 July 2017 |newspaper=The Washington Post}}</ref><ref>{{Cite web |last=Covert |first=Bryce |date=3 July 2014 |title=States That Raised Their Minimum Wages Are Experiencing Faster Job Growth |url=http://thinkprogress.org/economy/2014/07/03/3456393/minimum-wage-state-increase-employment/ |url-status=live |archive-url=https://web.archive.org/web/20141025022719/http://thinkprogress.org/economy/2014/07/03/3456393/minimum-wage-state-increase-employment/ |archive-date=25 October 2014 |website=[[ThinkProgress]]}}</ref><ref>{{Cite web |last=Nellis |first=Mike |title=Minimum Wage Question and Answer |url=http://www.raisetheminimumwage.com/pages/qanda |url-status=dead |archive-url=https://web.archive.org/web/20141025024423/http://www.raisetheminimumwage.com/pages/qanda |archive-date=25 October 2014}}</ref>

In 2014, in Seattle, Washington, liberal and progressive business owners who had supported the city's new $15 minimum wage said they might hold off on expanding their businesses and thus creating new jobs due to the uncertain timeline for implementing the wage increase.<ref>{{Cite web |last=Wang |first=Deborah |date=24 October 2018 |title=Minimum Wage Limbo Keeps Small Business Owners Up At Night |url=https://kuow.org/stories/minimum-wage-limbo-keeps-small-business-owners-night/ |access-date=14 February 2023 |website=kuow.org |language=en}}</ref> However, subsequently at least two of the business owners quoted did expand.<ref>{{Cite web |title=Seattle Magazine, March 23, 2015 |url=http://www.seattlemag.com/article/cupcake-royale-owner-and-pastry-chef-launch-3-new-ventures |url-status=dead |archive-url=https://web.archive.org/web/20210225021153/https://www.seattlemag.com/article/cupcake-royale-owner-and-pastry-chef-launch-3-new-ventures |archive-date=25 February 2021 |access-date=1 February 2016}}</ref><ref>[http://komonews.com/archive/15-minimum-wage-a-surprising-success-for-seattle-restaurant-11-21-2015 $15 minimum wage a surprising success for Seattle restaurant] {{webarchive|url=https://web.archive.org/web/20160726215335/http://komonews.com/archive/15-minimum-wage-a-surprising-success-for-seattle-restaurant-11-21-2015 |date=26 July 2016 }}, KOMO News, 31 July 2015</ref>

Concerning the economic effects of introducing minimum wage legislation in Germany in January 2015, recent developments have shown that the feared increase in unemployment has not materialized; however, in some economic sectors and regions of the country, there has been a decline in job opportunities, particularly for temporary and part-time workers, and some low-wage jobs have disappeared entirely.<ref>C. Eisenring (Dec 2015). [http://www.nzz.ch/wirtschaft/wirtschaftspolitik/gefaehrliche-mindestlohn-euphorie-1.18669322?extcid=Newsletter_29122015_Top-News_am_Morgen Gefährliche Mindestlohn-Euphorie] {{webarchive|url=https://web.archive.org/web/20160101063214/http://www.nzz.ch/wirtschaft/wirtschaftspolitik/gefaehrliche-mindestlohn-euphorie-1.18669322?extcid=Newsletter_29122015_Top-News_am_Morgen |date=1 January 2016 }} (in German). ''Neue Zürcher Zeitung''. Retrieved 30 December 2015.</ref> Because of this overall positive development, the [[Deutsche Bundesbank]] revised its opinion, and ascertained that "the impact of the introduction of the minimum wage on the total volume of work appears to be very limited in the present business cycle".<ref>{{Cite web |last=Janssen |first=R. |date=September 2015 |title=The German Minimum Wage Is Not A Job Killer |url=http://www.socialeurope.eu/2015/09/the-german-minimum-wage-is-not-a-job-killer/ |archive-url=https://web.archive.org/web/20151109094251/http://www.socialeurope.eu/2015/09/the-german-minimum-wage-is-not-a-job-killer/ |archive-date=9 November 2015 |access-date=30 December 2015 |website=Social Europe}}</ref>

A 2019 study published in the ''[[American Journal of Preventive Medicine]]'' showed that in the United States, those states that have implemented a higher minimum wage saw a decline in the growth of [[Suicide in the United States|suicide]] rates. The researchers say that for every one-dollar increase, the annual suicide growth rate fell by 1.9%. The study covers all 50 states for the years 2006 to 2016.<ref>{{Cite news |last=Rapaport |first=Lisa |date=19 April 2019 |title=Higher state minimum wage tied to lower suicide rates |url=https://www.reuters.com/article/us-health-suicide-wages/higher-state-minimum-wage-tied-to-lower-suicide-rates-idUSKCN1RV17R |access-date=27 April 2019 |work=[[Reuters]]}}</ref>

According to a 2020 US study, the cost of a 10% minimum wage increase for grocery store workers was fully passed through to consumers as a 0.4% increase in grocery prices.<ref>{{Cite journal |last1=Renkin |first1=Tobias |last2=Montialoux |first2=Claire |last3=Siegenthaler |first3=Michael |date=30 October 2020 |title=The Pass-Through of Minimum Wages into US Retail Prices: Evidence from Supermarket Scanner Data |url=https://doi.org/10.1162/rest_a_00981 |journal=The Review of Economics and Statistics |volume=104 |issue=5 |pages=890–908 |doi=10.1162/rest_a_00981 |hdl=20.500.11850/448658 |issn=0034-6535 |s2cid=202621766 |quote=This paper estimates the pass-through of minimum wage increases into the prices of US grocery and drug stores. We use high-frequency scanner data and leverage a large number of state-level increases in minimum wages between 2001 and 2012. We find that a 10% minimum wage hike translates into a 0.36% increase in the prices of grocery products. This magnitude is consistent with a full pass-through of cost increases into consumer prices. We show that price adjustments occur mostly in the three months following the passage of minimum wage legislation rather than after implementation, suggesting that pricing of groceries is forward-looking. |hdl-access=free}}</ref> Similarly, a 2021 study that covered 10,000 [[McDonald's]] restaurants in the US found that between 2016 and 2020, the cost of 10% minimum wage increases for McDonald's workers were passed through to customers as 1.4% increases in the price of a Big Mac.<ref name="Princeton">{{Cite web |last1=Ashenfelter |first1=Orley |last2=Jurajda |first2=Štěpán |date=1 January 2021 |title=Wages, Minimum Wages, and Price Pass-Through: The Case of McDonald's Restaurants |url=https://dataspace.princeton.edu/bitstream/88435/dsp01sb397c318/4/646.pdf |url-status=dead |archive-url=https://web.archive.org/web/20210228050555/https://dataspace.princeton.edu/bitstream/88435/dsp01sb397c318/4/646.pdf |archive-date=28 February 2021 |access-date=3 February 2021 |quote=We use highly consistent national-coverage price and wage data to provide evidence on wage increases, labor-saving technology introduction, and price pass-through by a large low-wage employer facing minimum wage hikes. Based on 2016–2020 hourly wage rates of McDonald's Basic Crew and prices of the Big Mac sandwich collected simultaneously from almost all US McDonald's restaurants, we find that in about 25% of instances of minimum wage increases, restaurants display a tendency to keep constant their wage 'premium' above the increasing minimum wage. Higher minimum wages are not associated with faster adoption of touch-screen ordering, and there is near-full price pass-through of minimum wages, with little heterogeneity related to how binding minimum wage increases are for restaurants. Minimum wage hikes lead to increases in real wages (expressed in Big Macs an hour of Basic Crew work can buy) that are one fifth lower than the corresponding increases in nominal wages.}}</ref><ref name="MW_1">{{Cite news |last=Buchwald |first=Elisabeth |date=30 January 2021 |title=What minimum-wage increases did to McDonald's restaurants — and their employees |url=https://www.marketwatch.com/story/what-minimum-wage-increases-did-to-mcdonalds-restaurants-and-their-employees-11611862080 |work=[[MarketWatch]] |quote=They found that the higher cost of labor that results from increasing minimum wages gets passed on to consumers in the form of more expensive Big Macs. More specifically, they estimated that a 10% minimum-wage increase leads to a 1.4% increase in the price of a Big Mac.}}</ref> This results in minimum wage workers getting a lesser increase in their "real wage" than in their nominal wage, because any goods and services they purchase made with minimum-wage labor have now increased in cost, analogous to an increase in the sales tax.<ref name="NPR_2021-02-16">{{Cite news |last=Rosalsky |first=Greg |date=16 February 2021 |title=What McDonald's Shows About The Minimum Wage |url=https://www.npr.org/sections/money/2021/02/16/967333964/what-mcdonalds-shows-about-the-minimum-wage |work=[[NPR]] |quote=Ashenfelter says the evidence from increased food prices suggests that basically all of the "increase of labor costs gets passed right on to the customers". But because low-wage workers are also usually customers at low-wage establishments, this suggests that any pay raise resulting from a minimum wage increase might not be as great in reality as it looks on paper. In econospeak, the increase in their "real wage" — that is, their wage after accounting for the price of the stuff they buy — is not as high, because the cost of some of the stuff they buy, such as fast food, goes up too. ... "They still get a raise. They just don't get as big a raise as it may seem," he says. In effect, a minimum wage increase appears to be a redistribution of wealth from customers to low-wage workers. Ashenfelter says he thinks of it like a kind of sales tax.}}</ref>

According to a 2019 review of the academic literature by [[Arindrajit Dube]], "overall, the most up to date body of research from US, UK and other developed countries points to a very muted effect of minimum wages on employment, while significantly increasing the earnings of low paid workers."<ref name=":2">{{Cite web |last=Arindrajit |first=Dube |date=5 November 2019 |title=Impacts of minimum wages: review of the international evidence |url=https://www.gov.uk/government/publications/impacts-of-minimum-wages-review-of-the-international-evidence |url-status=live |archive-url=https://web.archive.org/web/20240117134420/https://assets.publishing.service.gov.uk/media/5dc0312940f0b637a03ffa96/impacts_of_minimum_wages_review_of_the_international_evidence_Arindrajit_Dube_web.pdf |archive-date=17 January 2024 |access-date=12 February 2021 |website=GOV.UK |language=en}}</ref>

According to a 2021 study, " The Minimum Wage, EITC, and Criminal Recidivism," a $0.50 increase in the minimum wage reduces the probability that an ex-incarcerated individual returns to prison within 3 years by 2.15%; these reductions come mainly from recidivism for property and drug crimes.<ref>{{Cite journal |last1=Agan |first1=Amanda Y. |last2=Makowsky |first2=Michael D. |date=12 July 2021 |title=The Minimum Wage, EITC, and Criminal Recidivism* |url=http://jhr.uwpress.org/content/early/2021/07/03/jhr.58.5.1220-11398R1 |journal=Journal of Human Resources |language=en |volume=58 |issue=5 |pages=1712–1751 |doi=10.3368/jhr.58.5.1220-11398R1 |issn=0022-166X |s2cid=239719925|url-access=subscription }}</ref>

== Surveys of economists ==
There used to be agreement among economists that the minimum wage adversely affected employment, but that consensus shifted in the early 1990s due to new research findings. According to one 2021 assessment, "there is no consensus on the employment effects of the minimum wage".<ref>{{Cite journal |last=Manning |first=Alan |date=2021 |title=The elusive employment effect of the minimum wage |url=https://researchonline.lse.ac.uk/id/eprint/107415/ |journal=Journal of Economic Perspectives |volume=35 |issue=1 |pages=3–26 |doi=10.1257/jep.35.1.3 |issn=0895-3309 |s2cid=156644487}}</ref>

According to a 1978 article in the ''[[American Economic Review]]'', 90% of the economists surveyed agreed that the minimum wage increases unemployment among low-skilled workers.<ref>{{Cite journal |last1=Kearl |first1=J. R. |last2=Pope |first2=Clayne L. |last3=Whiting |first3=Gordon C. |last4=Wimmer |first4=Larry T. |date=May 1979 |title=A Confusion of Economists? |journal=The American Economic Review |volume=69 |issue=2 |pages=28–37 |jstor=1801612}}</ref> By 1992, the survey found 79% of economists in agreement with that statement,<ref>{{Cite journal |last1=Alston |first1=Richard M. |last2=Kearl |first2=J. R. |last3=Vaughan |first3=Michael B. |date=May 1992 |title=Is There a Consensus Among Economists in 1990s? |journal=The American Economic Review |volume=82 |issue=2 |pages=203–09 |jstor=2117401}}</ref> and by 2000, 46% were in full agreement with the statement and 28% agreed with provisos (74% total).<ref>survey by Dan Fuller and Doris Geide-Stevenson using a sample of 308 economists surveyed by the [[American Economic Association]]</ref><ref name="Hall">{{Cite book |last=Hall |first=Robert Ernest |url=https://books.google.com/books?id=RdkFAAAAQBAJ&q=2000+survey+members+of+the+American+Economic+Association+agreed+that+minimum+wages+increase+unemployment+among+young+and+unskilled+workers&pg=PA384 |title=Economics: Principles and Applications |publisher=Centage Learning |year=2007 |isbn=978-1111798208}}</ref> The authors of the 2000 study also reweighted data from a 1990 sample to show that at that time 62% of academic economists agreed with the statement above, while 20% agreed with provisos and 18% disagreed. They state that the reduction in consensus on this question is "likely" due to the Card and Krueger research and subsequent debate.<ref name="Fuller">{{Cite journal |last1=Fuller |first1=Dan |last2=Geide-Stevenson |first2=Doris |year=2003 |title=Consensus Among Economists: Revisited |journal=Journal of Economic Education |volume=34 |issue=4 |pages=369–87 |doi=10.1080/00220480309595230 |s2cid=143617926}}</ref>

A similar 2006 survey by Robert Whaples polled PhD members of the [[American Economic Association]] (AEA). Whaples found that 47% respondents wanted the minimum wage eliminated, 38% supported an increase, 14% wanted it kept at the current level, and 1% wanted it decreased.<ref name="Whaples 2006">{{Cite journal |last=Whaples |first=Robert |year=2006 |title=Do Economists Agree on Anything? Yes! |journal=The Economists' Voice |volume=3 |issue=9 |pages=1–6 |doi=10.2202/1553-3832.1156 |s2cid=201123406}}</ref> Another survey in 2007 conducted by the University of New Hampshire Survey Center found that 73% of labor economists surveyed in the United States believed 150% of the then-current minimum wage would result in employment losses and 68% believed a mandated minimum wage would cause an increase in hiring of workers with greater skills. 31% felt that no hiring changes would result.<ref>{{Cite report |url=http://epionline.org/studies/epi_minimumwage_07-2007.pdf |title=2007 EPI Minimum Wage Survey of Labor Economists |last1=Fowler |first1=Tracy A. |last2=Smith |first2=Andrew E. |publisher=The University of New Hampshire Survey Center |access-date=16 August 2012 |archive-url=https://web.archive.org/web/20071108090912/http://www.epionline.org/studies/epi_minimumwage_07-2007.pdf |archive-date=8 November 2007 |url-status=dead}}</ref>

Surveys of labor economists have found a sharp split on the minimum wage. Fuchs et al. (1998) polled labor economists at the top 40 research universities in the United States on a variety of questions in the summer of 1996. Their 65 respondents were nearly evenly divided on whether the minimum wage should be increased. They argued that the different policy views were not related to views on whether raising the minimum wage would reduce teen employment (the median economist estimated a 1% reduction), but rather to value differences, such as income redistribution.<ref>{{Cite journal |last1=Fuchs |first1=Victor R. |last2=Krueger |first2=Alan B. |last3=Poterba |first3=James M. |date=September 1998 |title=Economists' Views about Parameters, Values, and Policies: Survey Results in Labor and Public Economics |journal=Journal of Economic Literature |volume=36 |issue=3 |pages=1387–425 |jstor=2564804}}</ref> [[Daniel B. Klein]] and Stewart Dompe conclude, based on previous surveys, "the average level of support for the minimum wage is somewhat higher among labor economists than among AEA members."<ref name="Klein & Dompe 2007">{{Cite journal |last1=Klein |first1=Daniel |last2=Dompe |first2=Stewart |date=January 2007 |title=Reasons for Supporting the Minimum Wage: Asking Signatories of the 'Raise the Minimum Wage' Statement |url=http://econjwatch.org/articles/reasons-for-supporting-the-minimum-wage-asking-signatories-of-the-raise-the-minimum-wage-statement |url-status=live |journal=Economics in Practice |volume=4 |issue=1 |pages=125–67 |archive-url=https://web.archive.org/web/20111213221725/http://econjwatch.org/articles/reasons-for-supporting-the-minimum-wage-asking-signatories-of-the-raise-the-minimum-wage-statement |archive-date=13 December 2011}}</ref>

In 2007, Klein and Dompe conducted a non-anonymous survey of supporters of the minimum wage who had signed the "Raise the Minimum Wage" statement published by the [[Economic Policy Institute]]. 95 of the 605 signatories responded. They found that a majority signed because it transferred income from employers to workers, or equalized bargaining power between them in the labor market. In addition, a majority considered disemployment to be a moderate potential drawback to the increase they supported.<ref name="Klein & Dompe 2007" />

In 2013, a diverse group of 37 economics professors was surveyed about their views on the minimum wage's impact on employment. 34% of respondents agreed with the statement, "Raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment." 32% disagreed, and the remaining respondents were uncertain or had no opinion. 47% agreed with the statement, "The distortionary costs of raising the federal minimum wage to $9 per hour and indexing it to inflation are sufficiently small compared with the benefits to low-skilled workers who can find employment that this would be a desirable policy", while 11% disagreed.<ref>{{Cite web |date=26 February 2013 |title=Minimum Wage |url=http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_br0IEq5a9E77NMV |url-status=live |archive-url=https://web.archive.org/web/20130821030142/http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_br0IEq5a9E77NMV |archive-date=21 August 2013 |access-date=6 December 2013 |publisher=[[IGM Forum]]}}</ref>

== Alternatives ==
Economists and other political commentators have proposed alternatives to the minimum wage. They argue that these alternatives may address poverty better than a minimum wage, as they would benefit a broader population of low-wage earners, not cause unemployment, and distribute costs more widely rather than concentrating them on employers of low-wage workers.

=== Basic income ===
{{main|Basic Income}}

A [[basic income]] (or [[negative income tax]] – NIT) is a system of [[social security]] that periodically provides each citizen with a sum of money that is sufficient to live on frugally. Supporters of the basic-income idea argue that recipients of basic income would have considerably more bargaining power when negotiating wages with an employer, as there would be no risk of destitution for declining employment. As a result, jobseekers could spend more time looking for a more suitable or satisfying job, or wait for a higher-paying one to appear. Alternatively, they could spend more time developing their skills (through education and training), which would make them better suited for higher-paying jobs and offer numerous other benefits. Experiments on Basic Income and NIT in Canada and the United States show that people spent more time studying while the program{{which|date=June 2019}} was running.<ref>{{Cite web |last=Dolan |first=Ed |date=25 August 2014 |title=A Universal Basic Income and Work Incentives. Part 2: Evidence |url=http://www.economonitor.com/dolanecon/2014/08/25/a-universal-basic-income-and-work-incentives-part-2-evidence/ |archive-url=https://web.archive.org/web/20140923224115/http://www.economonitor.com/dolanecon/2014/08/25/a-universal-basic-income-and-work-incentives-part-2-evidence/ |archive-date=23 September 2014}}</ref>{{request quotation|date=June 2019}}

Proponents argue that a basic income based on a broad tax base would be more economically efficient than a minimum wage, as the minimum wage effectively imposes a high marginal tax on employers, causing [[deadweight loss|efficiency losses]].<ref>{{Cite web |last=Holden |first=Tom |date=February 25, 2026 |title=Universal basic income as a tool for tax and benefit reform |url=https://www.socialliberal.net/universal_basic_income_as_a_tool_for_tax_and_benefit_reform |url-status=live |archive-url=https://web.archive.org/web/20250914002505/https://www.socialliberal.net/universal_basic_income_as_a_tool_for_tax_and_benefit_reform |archive-date=September 14, 2025 |access-date=February 25, 2026 |website=Social Liberal Forum}}</ref>

=== Guaranteed minimum income ===
A [[guaranteed minimum income]] is another proposed system of [[social welfare provision]]. It is similar to a basic income or negative income tax system, except that it is normally conditional and subject to a means test. Some proposals also stipulate a willingness to participate in the [[labor market]] or to perform [[community services]].<ref>{{Cite web |date=28 January 1972 |title=Suggestion: Raise welfare children in institutions |url=https://news.google.com/newspapers?id=67osAAAAIBAJ&pg=766,4664677&dq=guaranteed+minimum+income+labor+market&hl=en |access-date=19 November 2013 |website=Star-News}}</ref>

=== Refundable tax credit ===
A [[refundable tax credit]] is a mechanism whereby the tax system can reduce the tax owed by a household to below zero, resulting in a net payment to the taxpayer beyond their own payments into the tax system. Examples of refundable tax credits include the [[earned income tax credit]] and the additional [[child tax credit]] in the US, and [[working tax credit]]s and [[child tax credit]]s in the UK. Such a system is slightly different from a [[negative income tax]], in that the refundable tax credit is usually only paid to households that have earned at least some income. This policy is more targeted against poverty than the minimum wage, because it avoids subsidizing low-income workers who are supported by high-income households (for example, teenagers still living with their parents).<ref name="wbur">{{Cite news |last=David Scharfenberg |date=28 April 2014 |title=What The Research Says In The Minimum Wage Debate |agency=WBUR}}</ref>

In the United States, earned income tax credit rates, also known as EITC or EIC, vary by state—some are refundable, while others are not.<ref>{{Cite web |title=50 State Resources Map on State EITCs |url=http://www.stateeitc.com/map/index.asp |url-status=dead |archive-url=https://web.archive.org/web/20090423021254/http://www.stateeitc.com/map/index.asp |archive-date=23 April 2009 |access-date=16 June 2010 |publisher=The Hatcher Group}}</ref> The federal EITC program has been expanded by many presidents including Jimmy Carter, Ronald Reagan, George H.W. Bush, and Bill Clinton.<ref>{{Cite web |title=New Research Findings on the Effects of the Earned Income Tax Credit |url=http://www.cbpp.org/cms/index.cfm?fa=view&id=1649 |url-status=live |archive-url=https://web.archive.org/web/20100617180942/http://www.cbpp.org/cms/index.cfm?fa=view&id=1649 |archive-date=17 June 2010 |access-date=30 June 2010 |website=Center on Budget and Policy Priorities}}</ref> In 1986, President Reagan described the EITC as "the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress."<ref>{{Cite web |last=Furman |first=Jason |date=10 April 2006 |title=Tax Reform and Poverty |url=http://www.cbpp.org/cms/index.cfm?fa=view&id=134 |url-status=live |archive-url=https://web.archive.org/web/20131213060957/http://www.cbpp.org/cms/index.cfm?fa=view&id=134 |archive-date=13 December 2013 |access-date=7 December 2013 |publisher=Center on Budget and Policy Priorities}}</ref> The ability of the earned income tax credit to deliver larger monetary benefits to the poor workers than an increase in the minimum wage and at a lower cost to society was documented in a 2007 report by the [[Congressional Budget Office]].<ref>{{Cite web |date=9 January 2007 |title=Response to a Request by Senator Grassley About the Effects of Increasing the Federal Minimum Wage Versus Expanding the Earned Income Tax Credit |url=http://www.cbo.gov/ftpdocs/77xx/doc7721/01-09-MinimumWageEITC.pdf |url-status=live |archive-url=https://web.archive.org/web/20080731074250/http://www.cbo.gov/ftpdocs/77xx/doc7721/01-09-MinimumWageEITC.pdf |archive-date=31 July 2008 |access-date=25 July 2008 |publisher=Congressional Budget Office}}</ref>

The [[Adam Smith Institute]] prefers cutting taxes on the poor and middle class instead of raising wages as an alternative to the minimum wage.<ref>{{Cite press release |title=Comment: Minimum Wage rise risks harming workers; cut taxes on the poor instead |date=March 2019 |publisher=Adam Smith Institute |url=http://www.adamsmith.org/news/press-releases/comment-minimum-wage-rise-risks-harming-workers-cut-taxes-on-the-poor-instead |access-date=19 March 2014 |url-status=live |archive-url=https://web.archive.org/web/20140413142735/http://www.adamsmith.org/news/press-releases/comment-minimum-wage-rise-risks-harming-workers-cut-taxes-on-the-poor-instead |archive-date=13 April 2014}}</ref>

=== Collective bargaining ===
Italy, Sweden, Norway, Finland, and Denmark are developed nations where legislation stipulates no minimum wage.<ref name=":0" /><ref name="NYT-20141027-LA" /> Instead, minimum wage standards in different sectors are set by [[collective bargaining]].<ref>{{Cite news |date=2 March 1933 |title=Labor Criticizes |url=https://news.google.com/newspapers?id=sqBfAAAAIBAJ&dq=minimum%20wage%20standards%20collective%20bargaining&pg=4131%2C2944514 |work=Lewiston Morning Tribune |pages=1, 6 |agency=Associated Press}}</ref> Particularly the Scandinavian countries have very high union participation rates.<ref name="Olson">{{Cite web |last=Olson |first=Parmy |title=The Best Minimum Wages In Europe |url=https://www.forbes.com/2009/08/31/europe-minimum-wage-lifestyle-wages.html |access-date=14 February 2023 |website=Forbes |language=en}}</ref>

=== Wage subsidies ===
Some economists such as [[Scott Sumner]]<ref>{{Cite web |last=Sumner |first=Scott |title=TheMoneyIllusion " You can't redistribute income. . |url=http://www.themoneyillusion.com/?p=10232 |url-status=live |archive-url=https://web.archive.org/web/20170811222858/http://www.themoneyillusion.com/?p=10232 |archive-date=11 August 2017 |access-date=11 August 2017 |website=www.themoneyillusion.com}}</ref> and [[Edmund Phelps]]<ref>Phelps, Edmund S. "Low-wage employment subsidies versus the welfare state." ''The American Economic Review'' 84.2 (1994): 54–58.</ref> advocate a wage subsidy program. A wage subsidy is a payment made by a government for work people do. It is based either on an hourly basis or by income earned.<ref>{{Cite news |date=25 September 2015 |title=The Wage Subsidy: A Better Way to Help the Poor {{!}} Manhattan Institute |url=https://www.manhattan-institute.org/html/wage-subsidy-better-way-help-poor-7778.html |url-status=live |archive-url=https://web.archive.org/web/20170811230231/https://www.manhattan-institute.org/html/wage-subsidy-better-way-help-poor-7778.html |archive-date=11 August 2017 |access-date=11 August 2017 |work=Manhattan Institute}}</ref><ref>{{Cite web |last=Cass |first=Oren |date=19 August 2015 |title=A Better Wage Hike |url=https://www.usnews.com/opinion/economic-intelligence/2015/08/19/wage-subsidies-are-better-than-raising-the-minimum-wage |url-status=dead |archive-url=https://web.archive.org/web/20150820110346/http://www.usnews.com/opinion/economic-intelligence/2015/08/19/wage-subsidies-are-better-than-raising-the-minimum-wage |archive-date=20 August 2015 |access-date=11 August 2017 |website=US NEWS}}</ref> Wage subsidies lack political support from either major [[political parties in the United States|political party]] in the United States.<ref>{{Cite web |last=Smith |first=Noah |date=7 December 2013 |title=Noahpinion: Wage subsidies |url=http://noahpinionblog.blogspot.com/2013/12/wage-subsidies.html |url-status=live |archive-url=https://web.archive.org/web/20170811224635/http://noahpinionblog.blogspot.com/2013/12/wage-subsidies.html |archive-date=11 August 2017 |access-date=11 August 2017 |website=Noahpinion}}</ref><ref>{{Cite news |last=Drum |first=Kevin |date=3 December 2013 |title=Wage subsidies might be a good idea, but Republicans will never support it |url=https://www.motherjones.com/kevin-drum/2013/12/wage-subsidies-might-be-good-idea-republicans-will-never-support-it/ |url-status=live |archive-url=https://web.archive.org/web/20170811224733/https://www.motherjones.com/kevin-drum/2013/12/wage-subsidies-might-be-good-idea-republicans-will-never-support-it/ |archive-date=11 August 2017 |access-date=11 August 2017 |work=Mother Jones}}</ref>

=== Education and training ===
Providing education or funding for apprenticeships or technical training can serve as a bridge for low-skilled workers to move into higher-paying jobs. For example, Germany has adopted a state-funded [[apprenticeship]] program that combines on-the-job and classroom training.<ref>{{Cite web |date=16 October 2014 |title=Why Germany Is So Much Better at Training Its Workers |url=https://www.theatlantic.com/business/archive/2014/10/why-germany-is-so-much-better-at-training-its-workers/381550/ |website=[[The Atlantic]]}}</ref> Having more skills makes workers more valuable and more productive, but having a high minimum wage for low-skill jobs reduces the incentive to seek education and training.<ref>{{Cite web |last=Dowd |first=Mary |title=Alternatives to Raising Minimum Wage |url=https://work.chron.com/alternatives-raising-minimum-wage-18704.html |website=Chron – Work}}</ref> Moving some workers to higher-paying jobs will decrease the supply of workers willing to accept low-skill jobs, increasing the market wage for those low-skilled jobs (assuming a stable labor market). However, in that solution, the wage will still not rise above the role's marginal return and will likely promote automation or business closures.

== By country ==
{{further|List of countries by minimum wage}}

=== Argentina ===
[[File:Presidente Juan Domingo Perón (AGN 123768).jpg|thumb|[[President of Argentina]], [[Juan Perón|Juan Domingo Perón]], who introduced the minimum wage in 1945 as [[Secretariat of Labour, Employment and Social Security (Argentina)|Secretary of Labour]], and later reformed the [[Constitution of Argentina|Constitution]] to add the minimum wage]]
The minimum wage was introduced in [[Argentina]] in 1945, by [[Juan Perón|Juan Domingo Perón]], when he was [[Secretariat of Labour, Employment and Social Security (Argentina)|Secretary of Labour]] during the government of [[Edelmiro Julián Farrell|Edelmiro Farrell]].<ref>{{Cite journal |last1=Sánchez |first1=Carlos E. |last2=Ferrero |first2=Fernando |last3=Schulthess |first3=Wálter E. |last4=Sanchez |first4=Carlos E. |last5=Schulthess |first5=Walter E. |date=April 1979 |title=Empleo, desempleo y tamaño de la fuerza laboral en el mercado de trabajo urbano de la Argentina |journal=Desarrollo Económico |volume=19 |issue=73 |pages=53 |doi=10.2307/3466495 |issn=0046-001X |jstor=3466495|doi-access=free }}</ref> When Perón became president, he added it to the [[Argentine Constitution of 1949|Constitutional Reform of 1949]], however, the [[Revolución Libertadora|dictatorship that overthrew his government in 1955]] eliminated the constitutional hierarchy the minimum wage that obtained.

In 1964, the minimum wage was reincorporated by the [[Argentine National Congress|Congress]] in the Law 16.459<ref>{{Cite journal |last=Bacic |first=Uros |date=1 December 1964 |title=Algunas consideraciones sobre la Ley del Salario Vital Mínimo y Móvil |journal=Estudios económicos |volume=3 |issue=5/6 |pages=127–130 |doi=10.52292/j.estudecon.1964.1005 |issn=2525-1295|doi-access=free }}</ref>

In the [[1994 amendment of the Constitution of Argentina|Constitutional reform of 1994]], the minimum wage obtained once again constitutional hierarchy.

The minimum wage is set by the National Council for Employment, Productivity, and Minimum Vital and Mobile Wage, composed of Union representatives, business entities, and the government.

'''$1 = 1392.92ARS(Argentina Peso)[May 3, 2026]'''
{| class="wikitable"
!Year
!Monthly rates
!US dollar
|-
|March 2026
|ARS 352,400
|$252.99
|}

=== Armenia ===
The concept of the national minimum wage emerged in [[Armenia]] in 1995. Since then, it has been increasing, on average, every couple of years. The longest unchanged streak of the national minimum wage was between 1999 and 2003, when it was set at 5,000 [[Armenian Dram|AMD]], and between 2015 and 2019, when it was set at 55,000 AMD. In November 2022, the national minimum wage received its latest increase. It was set at 75,000 AMD.<ref>{{Cite web |title=Armenia – Minimum wages 2022 {{pipe}} countryeconomy.com |url=https://countryeconomy.com/national-minimum-wage/armenia |access-date=14 February 2023 |website=countryeconomy.com |language=en}}</ref><ref>{{Cite web |title=Minimum wage to rise in Armenia |url=https://news.am/eng/news/730308.html/ |access-date=15 November 2022 |website=news.am}}</ref>

=== Australia ===
{{main|Minimum wage in Australia}}

In Australia, the Fair Work Commission (FWC) is responsible for determining and setting the national minimum wage, the minimum wages in awards, and wage rates for particular occupations and industries. ''The Fair Work Act 2009'' establishes an Expert panel tasked with providing and maintaining a safety net of a fair minimum wage. The Expert panel consists of the panel president, three full-time commission members, and three part-time commission members. All members must have experience in workplace relations, economics, social policy, or business, industry, and commerce, and can inform their decision-making through commissioning a range of economic and social research.<ref>{{Cite web |title=Annual wage reviews {{!}} Fair Work Commission |url=https://www.fwc.gov.au/hearings-decisions/major-cases/annual-wage-reviews |access-date=2 May 2022 |website=www.fwc.gov.au}}</ref>

The legislative framework requires that, in setting minimum wages, the Expert Panel take into account the current state of the economy, including inflation, business competitiveness, productivity, and employment growth. In addition, the Expert panel must consider the social goals of promoting social inclusion, the standard of living of the low-paid, equal remuneration for work of equal or comparable value, and reasonable wages for junior employees, employees whose jobs have training requirements, and employees with disabilities.<ref name=":02">{{cite act|type=Act|index=Part 2-6|date=7 July 2009|article=Fair Work Act|article-type=Act|title=Fair Work Act 2009|trans-title=|page=284|url=https://www.legislation.gov.au/Details/C2017C00323|language=English}}</ref> See [[Fair Work Act 2009]] for more information.

The Expert panel conducts yearly wage reviews to determine if the minimum wage needs to be adjusted based on the economy's current and projected performance. The annual minimum wage review decisions in 2016–17 found, based on research tendered and submissions to the review, that moderate increases to minimum wages do not inhibit workplace participation or result in disemployment. This position was carried over to the 2017–18 and 2018–19 decisions<ref name=":02" /> and informed the decisions, including the 2018–19 decision, which delivered a 3% minimum wage increase when the corresponding headline rate of inflation was 1.3%.<ref>{{cite act|type=Decision|index=Annual Wage Review|date=30 May 2019|article=Fair Work Act|article-type=Act|title=Annual Wage Review 2019|trans-title=Decision|page=10|url=https://www.fwc.gov.au/documents/wage-reviews/2018-19/decisions/2019fwcfb3500.pdf|language=English}}</ref> In the annual minimum wage review decisions of 2019–20 and 2020–21, the FWC was considerably more constrained in setting minimum wages due to uncertain economic conditions during the [[COVID-19 pandemic]] and the 2020–21 decision noted the uncertainty of the impact of increases in the minimum wages for youth employment.<ref>{{cite act|type=Decision|index=Annual Wage Review|date=16 June 2020|article=Fair Work Act|article-type=Act|title=Annual Wage Review 2020|trans-title=Decision|page=10|url=https://www.fwc.gov.au/documents/decisionssigned/html/pdf/2021fwcfb3500.pdf|language=English}}</ref>

'''$1 = 1.39AUD(Australia dollar)[May 3, 2026]'''
{| class="wikitable"
!year
!hourly wage
!weekly wage(38 hour work week)
|-
|July 2025 ~ June 2026
|A$24.95($17.97)
|A$948.10($682.82)
|}

=== Lebanon ===
After two years of a financial meltdown, Lebanon, as of 2021, ranks among the 10 countries with the lowest minimum wages due to the collapse of the local pound following the Lebanese financial crisis that began in August 2019.<ref>{{Cite news |last=Xinhua |date=26 February 2021 |title=Lebanon ranks among countries with lowest minimum wages |url=http://www.xinhuanet.com/english/2021-02/26/c_139767728.htm |url-status=dead |archive-url=https://web.archive.org/web/20220416183921/http://www.xinhuanet.com/english/2021-02/26/c_139767728.htm |archive-date=16 April 2022 |access-date=16 April 2022 |publisher=Xinhua |issue=26 February 2021 |agency=Xinhua}}</ref>

The minimum monthly wage set at LBP 675,000, which valued US$450 before the crisis, is barely reaching US$30 nowadays.<ref>{{Cite news |last=WION Web Team |date=22 November 2021 |title=Lebanon families spending five times minimum wage on food alone |url=https://www.wionews.com/world/lebanon-families-spending-five-times-minimum-wage-on-food-alone-study-399497 |access-date=16 April 2022 |agency=WION Web Team}}</ref> The currency has lost nearly 90% of its value and drove three quarters of residents into poverty.<ref>{{Cite news |last=Goyeneche |first=Ainhoa |date=21 September 2021 |title=Lebanon's inflation rate is worse than Zimbabwe's and Venezuela's |url=https://www.aljazeera.com/economy/2021/9/21/lebanons-inflation-rate-is-worse-than-zimbabwes-and-venezuelas |access-date=16 April 2022 |publisher=AlJazeera |agency=AlJazeera}}</ref>

Article 44 of the Lebanese Code of Labor states that, "the minimum pay must be sufficient to meet the essential needs of the wage-earner or salary-earner and his family", and according to Article 46, "the minimum pay assessed shall be rectified whenever economic circumstances render such review necessary".<ref>{{Cite news |last=Ramadan |first=Tala |date=28 February 2021 |title=Lebanon's average salary plummets 84 percent over 12 months |url=https://english.alarabiya.net/News/2021/02/28/Lebanon-s-average-salary-plummets-by-84-percent |access-date=16 April 2022 |publisher=AlArabiya |agency=AlArabiya}}</ref>

=== Republic of Ireland ===
The national minimum wage was introduced in the [[Republic of Ireland]] in April 2000. Before this, minimum wages were set by industry-specific Joint Labour Committees. However, coverage for workers was low, and the agreements were poorly enforced; moreover, those covered by the agreements received low wages.

As of April 2000, the government introduced a national minimum wage of €5.58 per hour. The minimum wage increased steadily from 2000 to 2007, reaching €8.65 per hour in July 2007. As the global economic downturn hit the country in 2008, there were no further wage increases until 2016, when the minimum wage was increased to 9.15.

Before 2019, there existed specific categories of employees that earned sub-minimum wage rates, expressed as a percentage of the full rate of pay. Employees under the age of 18 were eligible to earn 70 per cent of the minimum wage, employees in the first year of employment were eligible to earn 80 per cent, employees in the second year of full employment were eligible to earn 90 per cent and employees in structured training during working hours were eligible to earn 75, 80 or 90 per cent depending on their level of progression. This framework has since been abolished in favor of one based on the employee's age.<ref>{{Cite journal |last=Redmond |first=Paul |date=May 2020 |title=Minimum wage policy in Ireland |url=https://www.econstor.eu/bitstream/10419/227618/1/1697722245.pdf |journal=Budget Perspectives |pages=1–2 |doi=10.26504/bp202102 |s2cid=218932373 |id=No. 2021/2 |access-date=27 April 2022}}</ref>

As of 1 January 2022, the minimum wage is €10.50. Those aged 20 and over are eligible to receive 100 percent of the minimum wage. Those under the age of 18 are eligible to receive 70 percent of the minimum wage, those aged 18 are eligible to receive 80 percent of the minimum wage and those aged 19 are eligible receive 90 percent of the minimum wage.<ref>{{Cite web |title=Minimum rates of pay |url=https://www.citizensinformation.ie/en/employment/employment_rights_and_conditions/pay_and_employment/pay_inc_min_wage.html |access-date=27 April 2022 |publisher=Citizens Information}}</ref>
{| class="wikitable"
!year
!hourly wage(over 20 years old)
!hourly wage(19 years old)
!hourly wage(18 years old)
!hourly wage(under 18)
|-
|2026
|€14.15($16.59)
|
|
|€9.91($11.62)
|}

=== South Korea ===
{{excerpt|Minimum wage in South Korea}}South Korea has special allowance which's called weekly paid allowance for all employees working more than 15 hours a week with perfect completion of employment a week

South Korea minimum wage table

'''$1 = 1,469.30원(Korean Won)[May 1, 2026]'''
{| class="wikitable"
!year
!hourly wage
!monthly wage(40 hour work week)
!reference
|-
|2023
|9,620원($6.51)
|2,010,580원($1,361.26)
|
|-
|2024
|9,860원($6.70)
|2,060,740원($1,402.53)
|
|-
|2025
|10,030원($6.82)
|2,096,270원($1,426.71)
|
|-
|2026
|10,320원($7.02)
|2,156,880원($1,467.96)
|
|}

=== Japan ===
Japan adapts new minimum wage on 1 October Yearly.

Minimum wage rates vary by regions, Tokyo has the highest rates and Okinawa, Gochi region have lowest.

normally indicates by average hourly wage nationwidely.

'''$1 = 156.66円(Japanese Yen)[May 1, 2026]'''
{| class="wikitable"
!year
!hourly wage
!average hourly rate
!reference
|-
|Oct 2024 ~ Sep 2025
|¥951 ($6.06) ~ ¥1,163($7.41)
|¥1,055($6.72)
|
|-
|Oct 2025 ~ Sep 2026
|¥1,023($6.53) ~ ¥1,226($7.83)
|¥1,121($7.16)
|
|}

=== China ===
[https://www.mohrss.gov.cn/SYrlzyhshbzb/laodongguanxi_/fwyd/202601/t20260112_565296.html china minimum wage website]

China sets minimum wages differently depending on the type (hourly wage, monthly wage) and regions<ref>{{Cite web |title=china minimum wage sheet |url=https://www.mohrss.gov.cn/SYrlzyhshbzb/laodongguanxi_/fwyd/202601/t20260112_565296.html |access-date=2026-05-03 |website=www.mohrss.gov.cn}}</ref>

capital regions such as Shanghai, Beijing, Guangzhou have highest rate While Xinjiang, Tibet regions have lowest

China sets minimum wage levels in 1 to 5 stages depending on the region., In the past, there were levels 1 through 7,<ref>{{Cite web |last= |title=china minimum wage 2011(level 1~7) |url=https://www.mohrss.gov.cn/ldgxs/LDGXqiyegongzi/LDGXzuidigongzibiaozhun/201201/t20120119_86795.html |access-date=2026-05-02 |website=www.mohrss.gov.cn}}</ref> but over time, the highest level has been lowered to level 4.

'''$1 = 6.83元CNY(Chinese Yuan) [May 1, 2026]'''
{| class="wikitable"
!year
!hourly wage(lower than 4 hours a day or 24 hours a week)
!monthly rate(lower than 40 hour work week or 8  hours a day)
|-
|January 2026 
|17.4元 ~ 27.7元($2.55~$4.06)
|1,750元 ~ 2,740元($256.23 ~ $401.19)
|}

=== Mongolia ===
'''$1 = ₮3,602.44(Mongolian Tugrik) [May 3, 2026]'''
{| class="wikitable"
!year
!Daily rates
!US dollar
|-
|Jan 2024
|₮660,000
|$183.21
|-
|April 2025
|₮792,000
|$219.85
|}

=== Thailand ===
'''$1 = ฿32.51(Thai Bhat) [May 3, 2026]'''
{| class="wikitable"
!year
!Daily rates
!US dollar
|-
|2025
|฿337 ~ ฿400
|$10.37 ~ $12.30
|}

=== France ===
{| class="wikitable"
!year
!hourly rates
!monthly wage(35 hour/week)
|-
|2026
|€12.02($14.09)
|€1,823.03($2137.57)
|}

=== Germany ===
{| class="wikitable"
!year
!hourly rates
|-
|Jan 2024
|€12.41($14.55)
|-
|Jan 2025
|€12.82($15.03)
|-
|Jan 2026
|€13.90($16.30)
|-
|Jan 2027
|€14.60($17.12)
|}

=== Spain ===
The Spanish government sets the "Interprofessional Minimum Wage" (SMI) annually, after consulting with the most representative [[trade union]]s and business associations, for both permanent and temporary workers, as well as for domestic employees. It takes into account the [[consumer price index]], national average productivity, the increase in labor's share in [[national income]], and the general economic situation.<ref>{{Citation |last=Jefatura del Estado |title=Real Decreto-ley 3/2004, de 25 de junio, para la racionalización de la regulación del salario mínimo interprofesional y para el incremento de su cuantía |date=26 June 2004 |issue=Real Decreto-ley 3/2004 |pages=23466–23472 |url=https://www.boe.es/eli/es/rdl/2004/06/25/3 |access-date=28 April 2023}}</ref><ref>{{Cite web |title=BOE-A-2015-11430 Real Decreto Legislativo 2/2015, de 23 de octubre, por el que se aprueba el texto refundido de la Ley del Estatuto de los Trabajadores. |url=https://www.boe.es/buscar/act.php?id=BOE-A-2015-11430 |access-date=28 April 2023 |website=www.boe.es}}</ref>

The SMI can be revised semi-annually if the government's predictions about the consumer price index are not met. The set amount is the minimum wage, so a collective or individual agreement with the company can exceed it. The revision of the SMI does not affect the structure or amount of professional salaries paid to workers who are above the established minimum wage. Finally, the SMI amount is non-seizable.

The minimum wage was introduced in Spain in 1963 through [[Decree]] [https://www.boe.es/diario_boe/txt.php?id=BOE-A-1963-1598 55/1963], proposed by [[Jesús Romeo Gorría]], the [[Minister of Labor]] during [[Francisco Franco]]'s IX Government. The purpose was to ensure fair remuneration for all workers, to adjust wages in line with labor and economic conditions, and to advocate for salary equity. It was set at 1,800 pesetas/month (25,200 pesetas/year, 12 monthly payments plus 2 extra payments, as it is customary in Spain to this day), equivalent to 10.80 euros at the time but only 400 euros in today's prices.

In the years following Franco's death in 1975, the minimum wage gradually increased, reaching 50.49 euros (8,400 pesetas) that year, which is equivalent to 657.23 euros in today's currency.<ref>{{Cite web |date=31 January 2023 |title=Así ha evolucionado el Salario Mínimo en España desde el franquismo hasta los 1.080 euros de 2023 |url=https://www.larazon.es/economia/20230131/72hnqi72p5bunfiuydcsut5pqe.html |access-date=28 April 2023 |website=www.larazon.es |language=es}}</ref> Over the years, the minimum wage continued to rise, with several revisions along the way. In 2022, the Spanish government set the minimum wage at 33.33 euros per day or 1,000 euros per month, effective from 1 January. This represents a 47% increase from the previous minimum wage set in 2018 at 735.90 euros.<ref>{{Cite web |title=BOE-A-2022-2851 Real Decreto 152/2022, de 22 de febrero, por el que se fija el salario mínimo interprofesional para 2022. |url=https://www.boe.es/buscar/act.php?id=BOE-A-2022-2851 |access-date=28 April 2023 |website=www.boe.es}}</ref>

There are several debates about the minimum wage in Spain that focus on its impact on [[employment]] and [[inflation]]. While some argue that raising the minimum wage can be a useful tool to raise the incomes of low-income families and reduce poverty, others doubt its effectiveness in achieving these goals.

For instance, an analysis conducted by [[Bank of Spain|BCE]] (Central Bank of Spain, by its initials in Spanish) in 2019 on the impact of the 2017 increase in the minimum wage showed a negative effect on the probability of maintaining employment among affected workers, which was particularly significant for older workers.<ref>{{Cite journal |last1=Lacuesta Gabarain |first1=A. |last2=Izquierdo Peinado |first2=M. |last3=Puente Díaz |first3=S. |date=2019 |title=Un análisis del impacto de la subida del salario mínimo interprofesional en 2017 sobre la probabilidad de perder el empleo. |url=https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosOcasionales/19/Fich/do1902.pdf |journal=Documentos Ocasionales |volume=1902 |via=Banco de España}}</ref>

Additionally, the 2022 minimum wage raise reignited the debate over the relationship between inflation and the SMI, with some arguing that the increase could contribute to inflation. The debate centres on whether it is a useful tool for maintaining the [[purchasing power]] of those who retain their jobs, or whether it is ineffective because it adds pressure on price growth and increases the likelihood of inflation becoming entrenched.<ref>{{Cite web |title=España {{!}} Luces y sombras de la subida del SMI {{!}} BBVA Research |url=https://www.bbvaresearch.com/publicaciones/espana-luces-y-sombras-de-la-subida-del-smi/ |access-date=28 April 2023 |website=www.bbvaresearch.com |language=es}}</ref>

Seasonal, Temporary job(not over period of 120 days contracts) sets higher than general workers.

Monthly wage's based on 30 day of daily rates(general) with weekly paid allowance(Saturday, Sunday)

'''$1 = €0.85 [May 1, 2026]'''
{| class="wikitable"
!Year
!Daily rate(general)
!Daily rate(seasonal)
!Monthly wage(40 hour work week)
!reference
|-
|2026
|€40.70($47.90)
|€57.82($68.03)
|€1,221($1,436.94)
|
|}

=== United Kingdom ===
{{Main|National Living Wage}}'''$1 = £0.74(Pound Sterling)[May 3, 2026]'''
{| class="wikitable"
!year
!Hourly rates(Over 21 years old)
!Hourly rates(18~20)
!Hourly rates(under 18 and apprentice)
|-
|April 2026
|£12.71($17.29)
|£10.85($14.76)
|£8.00($10.88)
|}

=== Switzerland ===
Switzerland's made a decision to intoroduce legal minimum wage ever since corona pandemic(Late 2020)<ref>{{Cite web |title=Switzerland minimum wage introduction |url=}}</ref>

Still no national minimum wage but Geneva canton's firstly set minimum wages and highest rates in Switzerland

'''$1 = CHF 0.78(Swiss franc)[May 2, 2026]'''
{| class="wikitable"
!year
!Hourly rates
!Us dollar
|-
|2026
|20.50 CHF ~ 24.59 CHF
|$26.24 ~ $31.48
|}

=== Luxembourg ===
{| class="wikitable"
!Year
!Hourly rates(Over skilled 18 years old)
!Hourly rates(over unskilled 18)
!Hourly rates(17~18)
!Hourly rates(15~16)
|-
|May 2025
|€18.75($21.99)
|€15.63($18.33)
|€11.89($13.94)
|€11.15($13.07)
|}

=== Estonia ===
{| class="wikitable"
!Year
!Hourly rates
!Monthly rates
|-
|Jan 2025
|€5.31($6.23)
|€886.00($1038.87)
|-
|April 2026
|€5.67($6.65)
|€946.00($1109.22)
|}

=== Slovenia ===
{| class="wikitable"
!Year
!Monthly salary 
!Us dollar
|-
|2026
|€1,481.88
|$1,737.56
|}

=== Poland ===
'''$1 = 3.63 PLN(Polish złoty) [May 4, 2026]'''
{| class="wikitable"
!Year
!Monthly salary 
!Us dollar
|-
|2025
|PLN 4,666
|$1,284.19
|-
|2026
|PLN 4,806
|$1,322.72
|}

=== Hungary ===
'''$1 = 309.94 HUF(Hungary Forint) [May 3, 2026]'''
{| class="wikitable"
!Year
!Monthly salary for Unskilled worker
!Monthly salary for Skilled or Graduates
|-
|2026
|HUF 322,800 ($1,041.48)
|HUF 373,200 ($1,204.09)
|}

=== Russia ===
'''$1 = 74.97₽(Russian ruble)[May 1, 2026]'''
{| class="wikitable"
!year
!Monthly rates
!US  dollar amount
!
|-
|2025
|22,440 ~ 32,916₽
|$299.31 ~ $439.04
|
|-
|2026
|27,093 ~ 39,730₽
|$361.37 ~ $529.93
|about 20.6% increase
|}

=== United States ===
{{Main|Minimum wage in the United States}}

{{excerpt|Minimum wage in the United States}}
{| class="wikitable"
!year
!hourly wage
!reference
|-
|2026
|$7.25 ~ $21.3
|Federal hourly wage $7.25, Seattle hourly wage $21.3(highest)
|}

=== Mexico ===
Mexico sets daily wage, computing monthly wage(6 day work week), multiplies 30.41(days for paid weekly allowance) by daily wage

All region has same minimum rates except for Northern Border Free Zone.

The Mexico government's announced to raise minimum wage rapidly to boost purchasing power from 2018 with 10~15% increase,

this represents president's will to make it better for individuals life quality.

This raise is part of a continued effort to boost worker income and represents a significant increase in purchasing power

Aiming their weekly work hours(48 hours) to reduce to 40 hours/week by 2030<ref>{{Cite web |last=Social |first=Secretaría del Trabajo y Previsión |title=Mexico weekly work  hour plan Reducción de la jornada laboral a 40 horas |url=http://www.gob.mx/stps/documentos/reduccion-de-la-jornada-laboral-a-40-horas-preguntas-frecuentes?state=published |access-date=2026-05-03 |website=gob.mx |language=es}}</ref>

'''$1 = 17.46MXN(Mexico Peso) [May 1, 2026]'''
{| class="wikitable"
!year
!Daily wage(8 hours/day)
|-
|2022
|172.87 Peso ~ 260.34 Peso($9.90 ~ $14.91)
|-
|2023
|207.44 Peso ~ 312.41 Peso($11.88 ~ $17.90)
|-
|2024
|248.93 Peso ~ 374.89 Peso($14.26 ~ $21.47)
|-
|2025
|278.80 Peso ~ 419.88 Peso($15.97 ~ $24.05)
|-
|2026
|315.04 Peso ~ 440.87 Peso($18.05 ~ $25.25)
|}

=== Brazil ===
Standard work hour's 44 hours a week, has bonus system(''Gratificação de Natal)''<ref>{{Cite web |title=Brazil Compensation & Benefits Overview {{!}} G-P |url=https://www.globalization-partners.com/globalpedia/brazil/compensation-benefits/ |access-date=2026-05-03 |website=www.globalization-partners.com |language=en}}</ref>

calculate monthly wage including a paid weekly allowance(44hours x 5 weeks)<ref>{{Cite web |title=Brazil monthly minimum wage calculate method Leaders League - Brazil Changes Labor Laws |url=https://www.leadersleague.com/es/news/brazil-changes-labor-laws |access-date=2026-05-03 |website=Leaders League |language=es-ES}}</ref>

'''$1 = R$14.95(Brazil Real) [May 2, 2026]'''
{| class="wikitable"
!year
!Monthly salary(220 hours a month)
!US dollar
|-
|1st Jan 2023
|R$1,302
|$262.82
|-
|1st Jan 2024
|R$1,412
|$285.03
|-
|1st Jan 2025
|R$1,518
|$306.43
|-
|1st Jan 2026
|R$1,621
|$327.22
|}

=== Bolivia ===
'''$1 = BOB6.93(Boliviano) [May 4, 2026]'''
{| class="wikitable"
!year
!Monthly salary
!US dollar
|-
|Jan 2024
|BOB 2,500
|$360.61
|-
|Jan 2025
|BOB 2,750
|$396.67
|-
|Jan 2026
|BOB 3,300
|$476.00
|}

=== Colombia ===
Standard 44 hour week, down to 42 hours by 15 July 2026

every year employees must provide additional 1-month wage of bonus(Prima de Servicios) to employees<ref>{{Cite web |last=Colombia |first=Larm |date=2020-12-14 |title=colombia bonus law Everything related to the bonus payment for your housemaid |url=https://www.larmcolombia.com/post/everything-related-to-the-bonus-payment-for-your-housemaid |access-date=2026-05-03 |website=Larm Colombia |language=es}}</ref>

'''$1 = 3,619.28COP(Colombia peso) [May 2, 2026]'''
{| class="wikitable"
!year
!Monthly wage rates
!Us dollar
!reference
|-
|2024
|1,462,000pesos(including travel allowance of 162,000pesoss)
|$403.95
|
|-
|2025
|1,623,500pesos(including travel allowance of 200,000pesoss)
|$448.57
|
|-
|2026
|2,000,000pesos(including travel allowance of 249,095pesoss)
|$552.60
|raised approximately 23.7%
|}

=== Ecuador ===
{| class="wikitable"
!Year
!Monthly salary
|-
|Jan 2024
|US$460 
|-
|Jan 2025
|US$470 
|-
|Jan 2026
|US$482 
|}

=== Uruguay ===
Monthly wage below

Legally 1 month bonus(Aguinaldo) mandatory yearly(mostly 50% in June, December)<ref>{{Cite web |title=Uruguay a month bonus system |url=}}</ref>

'''$1 = 40.30UYU(Uruguay Peso) [May 1, 2026]'''
{| class="wikitable"
!Year
!monthly wage(200 hour based)
|-
|July 2024
|22,751.22pesos($564.57)
|-
|2025
|23,604pesos($585.73)
|-
|2026
|24,572pesos($609.75)
|}

=== Seychelles ===
'''$1 = 13.75SCR(Seychelles rupee) [May 3, 2026]'''
{| class="wikitable"
!year
!Hourly rates
!Hourly rates(Casual)
|-
|2025
|SCR 40.95($2.98)
|SCR 47.19($3.43)
|}

=== South Africa ===
'''$1 = 16.67ZAR(South Africa Rand) [May 3, 2026]'''
{| class="wikitable"
!year
!Hourly rates
!USD
|-
|2025
|R30.23
|$1.81
|}

== Minimum to median wage ratio ==
{{excerpt |Kaitz index|only=paragraphs}}
{{Sticky header}}
{| class="wikitable sortable mw-datatable static-row-numbers sticky-header" style="text-align:left"
|- class=static-row-header
! Country
! Minimum to median<br />wage ratio in 2024<ref>{{Cite web |title=OECD Statistics (GDP, unemployment, income, population, labour, education, trade, finance, prices...) |url=https://stats.oecd.org/Index.aspx?DataSetCode=MIN2AVE |access-date=15 February 2021 |publisher=Stats.oecd.org}}</ref>
|-
| {{flaglist| Colombia}} || 0.92
|-
| {{flaglist| Costa Rica}} || 0.87
|-
| {{flaglist| Chile}} || 0.75
|-
| {{flaglist| Mexico}} || 0.74
|-
| {{flaglist| New Zealand}} || 0.69
|-
| {{flaglist| France}} || 0.62
|-
| {{flaglist| Slovenia}} || 0.61
|-
| {{flaglist| South Korea}} || 0.61
|-
| {{flaglist| United Kingdom}} || 0.61
|-
| {{flaglist| Portugal}} || 0.59
|-
| {{flaglist| Poland}} || 0.59
|-
| {{flaglist| Romania}} || 0.57
|-
| {{flaglist| Turkey}} || 0.56
|-
| {{flaglist| Luxembourg}} || 0.54
|-
| {{flaglist| Australia}} || 0.54
|-
| {{flaglist| Spain}} || 0.53
|-
| {{flaglist| Germany}} || 0.51
|-
| {{flaglist| Slovak Republic}} || 0.51
|-
| {{flaglist| Bulgaria}} || 0.51
|-
| {{flaglist| Canada}} || 0.50
|-
| {{flaglist| Israel}} || 0.50
|-
| {{flaglist| Belgium}} || 0.50
|-
| {{flaglist| Hungary}} || 0.50
|-
| {{flaglist| Ireland}} || 0.50
|-
| {{flaglist| Greece}} || 0.49
|-
| {{flaglist| Lithuania}} || 0.49
|-
| {{flaglist| Netherlands}} || 0.48
|-
| {{flaglist| Japan}} || 0.47
|-
| {{flaglist| Croatia}} || 0.47
|-
| {{flaglist| Latvia}} || 0.46
|-
| {{flaglist| Czech Republic}} || 0.45
|-
| {{flaglist| Estonia}} || 0.42
|-
| {{flaglist| United States}} || 0.25
|}

== See also ==
{{Portal|Business and Economics|Capitalism}}
{{Div col|colwidth=24em}}
<!-- Please alphabetize, thanks. -->
* [[Average worker's wage]]
* [[Corporatism]]
* [[Cost of living]]
* [[Economic inequality]]
* [[Employee benefits]]
* [[Family wage]]
* ''[[Garcia v. San Antonio Metropolitan Transit Authority]]''
* [[Labor law]]
* [[Living wage]]
* [[Minimum Wage Fixing Convention 1970]]
* [[Negative and positive rights]]
* [[List of countries by minimum wage]]
* [[Price controls]]
* [[Salary cap]]
* ''[[Scratch Beginnings]]''
* [[Thomas Sowell#Higher education and early career|Thomas Sowell]]
* [[Universal basic income]]
* [[Youth unemployment]]
* [[Walter E. Williams#Economic and political views|Walter E. Williams]]
* [[Working poor]]
{{div col end}}

== Notes ==
{{reflist|group=lower-alpha}}

== References ==
{{reflist}}

== External links ==
{{Commons category|Minimum wage}}
{{Wikiquote}}
{{Wiktionary}}
{{Library resources box|by=no|onlinebooks=no|others=yes lcheading=Minimum wage}}
* [http://www.ilo.org/public/english/support/lib/resource/subject/salary.htm Resource Guide on Minimum Wages] from the [[International Labour Organization]] (a UN agency)
* [http://www.bis.gov.uk/policies/employment-matters/rights/nmw The National Minimum Wage (U.K.)] from the official UK government website
* [https://www.dol.gov/general/topic/wages/minimumwage Find It! By Topic: Wages: Minimum Wage] U.S. Department of Labor
* [http://www.bls.gov/cps/minwage2009.htm Characteristics of Minimum Wage Workers: 2009] U.S. Department of Labor, Bureau of Labor Statistics
* [https://www.dol.gov/agencies/whd/minimum-wage/history History of Changes to the Minimum Wage Law] U.S. Department of Labor, Wage and Hour Division
* [https://purl.fdlp.gov/GPO/gpo46157 The Effects of a Minimum-wage Increase on Employment and Family Income] [[Congressional Budget Office]]
* [https://fas.org/sgp/crs/misc/R42973.pdf Inflation and the Real Minimum Wage: A Fact Sheet] {{Webarchive|url=https://web.archive.org/web/20210610092135/https://fas.org/sgp/crs/misc/R42973.pdf |date=10 June 2021 }} [[Congressional Research Service]]
* [http://www.databasece.com/en/statutory-minimum-wages Minimum Wages in Central and Eastern Europe] {{Webarchive|url=https://web.archive.org/web/20210301103043/https://www.databasece.com/en/statutory-minimum-wages|date=1 March 2021 }} Database Central Europe
* [http://libraryguides.missouri.edu/pricesandwages Prices and Wages] – research guide at the University of Missouri libraries

'''Support'''
* [https://web.archive.org/web/20100717034550/http://www.aflcio.org/issues/jobseconomy/livingwages/americaneedsaraise.cfm Issues about Minimum Wage] from the [[AFL–CIO]]
* [http://www.epi.org/publications/entry/issue_guide_on_minimum_wage/ Issue Guide on the Minimum Wage] {{Webarchive|url=https://web.archive.org/web/20110828120313/http://www.epi.org/publications/entry/issue_guide_on_minimum_wage|date=28 August 2011}} from the [[Economic Policy Institute]]
* [http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_351-400/WP373.pdf A $15 U.S. Minimum Wage: How the Fast-Food Industry Could Adjust Without Shedding Jobs] {{Webarchive|url=https://web.archive.org/web/20210618150038/http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_351-400/WP373.pdf |date=18 June 2021 }} from the [[Political Economy Research Institute]], January 2015.

'''Opposed'''
* [https://web.archive.org/web/20100626042415/http://www.cato-at-liberty.org/2009/07/24/reporting-the-minimum-wage/ Reporting the Minimum Wage] from [[The Cato Institute]]
* [https://web.archive.org/web/20090707030847/http://showmeinstitute.org/docLib/20070411_smi_study_2.pdf The Economic Effects of Minimum Wages] from [[Show-Me Institute]]
* [https://web.archive.org/web/20181018112729/http://steshaw.org/economics-in-one-lesson/chap19p1.html Economics in One Lesson: The Lesson Applied, Chapter 19: Minimum Wage Laws] by [[Henry Hazlitt]]
{{Employment}}

{{Authority control}}

{{DEFAULTSORT:Minimum Wage}}
[[Category:Minimum wage| ]]
[[Category:Income distribution]]
[[Category:Labor relations]]
[[Category:Labour law]]
[[Category:Law and economics]]
[[Category:Personal taxes]]
[[Category:Price controls]]