Regulating Low Wages

• Department of Political and Social Sciences

The Social Investment Working Group: Paper presentation and discussion on "Regulating low wages: : A comparison of policy approaches across OECD countries."

Abstract of the paper: 

Low wages have become a salient issue in advanced capitalist democracies. Yet, there is little comparative research on how states deal with the problem. The article addresses this gap. Starting from a new conceptual framework of state regulation of wages, we identify three main government tools: statutory minimum wages, supportive regulation of collective bargaining, and topping up low wages with public benefits (in-work benefits). We analyse, across 33 OECD countries and from 1960 to 2017, to what extent rich democracies use these policies and how they combine them. All countries either support collective bargaining or implement a statutory minimum wage, but none completely neglects the setting of a wage floor. Besides, the role of the state in low-wage regulation has increased substantially since 1960. Our findings imply a more nuanced assessment of the role of the state and democratic politics in an age of liberalisation.