Conference Agenda

The current global context of high inflation, slow economic growth and stagnant earnings presents major obstacles to the goal of inclusive growth. Many developed and developing economies are experiencing prices rises across a range of basic commodities that have caused a major slump in real living standards, with especially large falls among the poorest (ILO 2023). A key institutional tool in combating the deterioration of real wages is minimum wage policy. However, country differences mean that minimum wage policy responsiveness to the current economic context varies significantly. Drawing on six country cases, this paper aims to shed light on the reasons for this inter-country variation and to draw policy lessons for inclusive growth of relevance to both developed and developing countries.

The research method consists of in-depth qualitative country case studies, involving original interviews with minimum policy-makers, social partners and country experts, secondary policy documentation and earnings data. The selected countries are Argentina, Chile, France, Germany, the UK and the US.

Building on recent theory (Bosch, Dingeldey, Grimshaw, Jacobs, Marinakis, Picot, Rubery, Schulten), the paper develops an original framework for comparing the responsiveness of minimum wage policy modes, involving features of technocracy, state politics and social partner power resources, considered in the wider context of labour market conditions. This framework is applied to each country with special attention to recent changes in the trajectory of minimum wage policy and gender equality. In each case it examines the performance of minimum wage policy with respect to inflation alongside three features of inclusive real wage growth: minimum wage solidarity (types of union strategies and campaigns to uprate the wage floor); minimum wage compliance (for formal work and also shadow compliance for informal work); and minimum wage catalyst (regarding wage ripple effects and gender pay effects, including via collective bargaining).

In doing so, this paper seeks to make two significant contributions to theory and policy. First, it seeks to improve our understanding about what characteristics of minimum wage policy prove to be particularly effective and dynamic under current macroeconomic conditions. Most minimum wage studies focus on relative success in avoiding job loss, but little is known about relative success in mitigating falls in real wages and living standards and the reasons for this, including the role of trade unions. Second, it seeks to contribute to building a new policy framework for inclusive growth, relevant to developing and developed countries.

National minimum wages (NMW) exist in 30 out of 38 OECD countries, and in recent years have become increasingly central to political and academic debates on the labour market and poverty. In Europe, in the last twenty-five years, there have been two very important cases of adoption of the minimum wage by countries with consolidated labor market regimes that did not provide for it: the United Kingdom in 1999 and Germany in 2015. Furthermore, some movement has recently occurred in two of the other outliers.

In Switzerland, a national referendum on the introduction of a NMW was held and voted down in 2014, and local minimum wages were introduced in several cantons. In Italy in the last decade there have been several legislative proposals on the subject.

Why at certain moments have these countries approached the turning point, or have they even introduced the NMW? Taken together, the British, German, Swiss and Italian cases, in contrast to the Nordic and Austrian ones, offer an interesting set of observations to try to grasp what are the conditions, which differ from country to country, in which openings can take place to such an important change for the various labor market regimes - in particular with respect to the balance between collective bargaining and the NMW as the boundary between a vision of labor market regulation more shifted towards the state role or the associative role (Meardi 2018 ).

This paper aims to analyze possible explanations - in functionalist (Dunlop 1958), power relations (Grimshaw and Johnson 2022) and institutional (Hauptmeier 2012) terms - to understand the evolution of countries that do not have NMWs and their position regarding at its introduction. Explanations that are tested in the cases of the United Kingdom, Germany, Switzerland and Italy, paying particular attention to the Italian case which is still open and which is particularly complex due to the particular institutional set-up of the country. In doing so, the paper intends to grasp some implications both for the institutional theory of industrial relations and for labor market policies. In particular, the contribution aims to contribute to a better understanding of what is at stake (in terms of consequences and impacts) for labor market policy and in particular for trade unions, in the transition from autonomous definition of the minimum wage through collective bargaining in the presence of the NMW.

Many countries have recently reacted to trends of de-unionisation and the spread of low-paid work by introducing statutory minimum wages or raising their level. But what exactly is the moral problem that minimum wages can claim to solve? There is very little normative work on the justification of minimum wages, and existing proposals are not convincing. In this paper, we argue that the most distinctive and strongest justification of adequate minimum wages is not that they contribute to fulfilling desirable overall social goals, such as minimising poverty or reducing economic inequality, nor that they increase generic social esteem for low-paid work. It is that they fulfil a central demand of recognizing economic citizenship. They express appropriate respect for individuals who fulfil their obligation to make a productive contribution to social cooperation by undertaking paid work (though other activities, such as unpaid care work, can fulfil this obligation, too). Developing this distinctive and robust justification for minimum wages matters not only because their increased use is, as noted, an important and widespread policy development, and we should want to know whether these policies are, normatively speaking, on the right track. It also matters for two further-reaching reasons. First, it reveals some general insights about the moral status of paid work in contemporary market economies. Second, on this basis, it also points to a set of additional measures and policies needed to recognise demands of economic citizenship more fully, such as participation in setting minimum-wage levels through collective bargaining, and setting upper bounds to permissible wages.

This is a paper in empirically informed and applied normative political theory. Its methodology is conceptual analysis (e.g., of respect, esteem, citizenship) and establishing wide reflective equilibrium (WRE). In WRE, the plausibility and coherence of normative hypotheses are tested not only against considered moral judgments and normative theories, but also against explanatory social theories and empirical findings (from comparative political science and economy). Thus, the paper contains two case studies of justifications used by policy makers in the UK and Germany, for introducing minimum wages, in addition to analysing the - sparse - normative scholarship on minimum wages.

The main contribution of this paper is the development an innovative justification of minimum wage guarantees with plausible wider implications for wage regulation, labour market justice, and contemporary ideas of democratic citizenship.