Minimum wage

A minimum wage is the lowest hourly, daily or monthly wage that employers may legally pay to employees or workers. First enacted in Australia and New Zealand in the late 19th century, minimum wage laws are now in force in more than 90% of all countries.

The magnitude of the costs and benefits of minimum wage laws are not fully understood, and are debated. Many supporters assert that the minimum wage is a matter of social justice that helps reduce exploitation and ensures workers can afford what they consider to be basic necessities (cf. living wage). Supporters deny that the minimum wage adversely impacts employment, or argue that such an effect is modest and outweighed by the social benefit derived from higher wages. Detractors contend that a minimum wage increases unemployment among low-wage workers, harming rather than helping the poorest workers. Some also argue that it slows economic growth. Economist Milton Friedman argued that in the U.S. the minimum wage was used for racist intent; to put African Americans out of work to raise the income of white laborers in the north. Some who oppose mandatory minimum wages also point out that it does not allow freedom of contract since it does not allow an individual who is willing to work for less money to contract to do so.