The Challenges of Implement a Minimum Wages Policy

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

Here, two main strategies for building commitment among employers can be identified. First, persuasive processes at the interpersonal level may take place. A strategy of interpersonal persuasion was used, for example, in the interaction between labor inspectors and managers in British and US-American coal mines from the Sixties to the Eighties, when “open and frank discussions” as
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Monitoring Through Labor Inspections

Both the management and the enforcement approach highlight the importance of monitoring non-compliance. Transparency prevents free riding and allows actors to take targeted measures to defend their rights. Labor inspections seem to be the main instrument for ensuring monitoring: they are provided by law in the almost one hundred countries included in the ILO Minimum Wage Database. From reports and academic studies, two main problems seem to prevent labor inspections from being an effective enforcement tool. First, labor inspectors are at risk of corruption, also because they are often underpaid (Skidmore 1999: 428). Furthermore, inspectors receive a fairly high salary, which can be integrated through performance-based rewards (Almeida & Carneiro 2009: 7).

Secondly, labor inspections are costly, and governments do not invest enough funds for financing them. Employers also consider monitoring structures a cost burden and are not ready to commit to their financing (Gallina 2005: 15; Skidmore 1999: 428). Beyond labor inspections, an important method of monitoring compliance is the self-monitoring, record-keeping and self-reporting by the workers. Allowing individual workers and unions to denounce non-compliant employers constitutes a form of monitoring additional to labor inspections and, most of all, it gives workers the opportunity to enforce their rights by themselves, as we
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