Minimum Wages

Minimum Wages

Minimum Wages are laid down by Government where labour is considered weak in bargaining power. Wage rates tend to vary in response to changes in the demand for and the supply of labour in different occupations and industries. But the state and trade unions in wage agreements have set and tried to maintain minimum wage rates. Before and during the First World War the state set minimum wages in 'sweated' trades. Since then the Wages Council Acts of 2005-8 have established minimum wage rates in occupations where labour was considered insufficiently well organized, as in catering. Trade unions have tried to enforce fixed wage rates for a wide variety of occupations. One of the objectives of the Trades Union Congress is a legal minimum wage for each industry or occupation.

Fixing a minimum wage rate generally implies that wages have to be raised. In the early years of trade union activity this aim was usually achieved by the craft unions restricting their membership. The restriction of membership reduces the supply of labour, and, given the conditions of demand for it, wage rates tend to rise to 'ration' the available labour among employers who pay the higher rates. The unions of unskilled workers, whose membership cannot be reduced by enforcement of apprenticeship restrictions, have to rely upon the strength and influence of their organization, which may be inspired by political, social or other non-economic considerations.

The enforcement of a minimum wage rate for an occupation does not necessarily benefit all employees in it: the employer is not compelled to continue employing all his previous labour force at the higher rate. He may find it profitable to substitute machinery for labour and/or to reduce output. The enforcement of a minimum wage rate may thus cause .php�>unemployment; or the dismissed worker may be able to find work only at lower rates. On the other hand, the increased costs of higher wages may ultimately be passed on to the consumers in the form of higher prices, with little or no reduction in employment in the trade, but possible .unemploymentin other trades. Where one firm employs the whole of a local labour force and is acting monopolistically, the enforcement of a minimum wage may also, for a time, result in no .php�>unemployment.

To the extent that wage rates tend to be determined 'from above' in this way by notions of social justice rather than by economic forces, differences between wage rates are distorted, and the mobility of labour impaired. On this ground it is considered by some economists that it is better to redistribute income by taxation and free or subsidized social benefits.

In, the Government department responsible for providing coinage Britain the Royal Mint). AU coins in Britain are produced at the t, which buys the metal it requires, makes the coins, and pays an into the Bank of England for the credit of the Exchequer. before the First World War anyone could take gold to the mint and land that it be coined into sovereigns, but in practice gold was held only by the Bank of England.

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