Minimum Wage Differentiation: International Attitudes and EU Experience
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Abstract
International Labour Organisation's attitudes towards minimum wage determination and differentiation are analysed in the article. Comparative analysis of minimum wage determination, adjustment and differentiation in selected European countries as well as main conclusions about minimum wage differentiation possibilities in Lithuania are provided.
The analysis of the experience of States Members of the European Union shows that the practice of a differentiation of the minimum wage is applied in most of them, however, the criteria of such differentiation are different. In many states, the minimum wage is differentiated taking into account the age and experience of employees. Usually, a lower minimum wage is fixed for youth in order to encourage young persons to improve their skills. A lower minimum wage is also established for probationers, apprentices, and students during their practice, schoolchildren as well as employees on the start of their working activities.
The minimum wage is differentiated dependently on economical activities and regions of the state as well. Usually, a lower minimum wage is established for employees of the agricultural sector and home workers. The group of the most rarely used criteria of differentiation of the minimum wage includes the size of the enterprise, the number of dependents of the employee, his (her) health status.
However, the problem of differentiation of the minimum wage is urgent for states where the minimum wage is rather high, considerably exceeding the minimal living standard. Establishment of a lower minimum wage for some groups of employees is a measure of a short-time character and is applied upon certain economical or social conditions only. After an adoption of a decision on a differentiation of the minimum wage in Lithuania, an essential reduction of its level should be avoided. On increase of the general level of the minimum wage in the state, it may be frozen for certain groups of employees.
The analysis of the experience of States Members of the European Union shows that the practice of a differentiation of the minimum wage is applied in most of them, however, the criteria of such differentiation are different. In many states, the minimum wage is differentiated taking into account the age and experience of employees. Usually, a lower minimum wage is fixed for youth in order to encourage young persons to improve their skills. A lower minimum wage is also established for probationers, apprentices, and students during their practice, schoolchildren as well as employees on the start of their working activities.
The minimum wage is differentiated dependently on economical activities and regions of the state as well. Usually, a lower minimum wage is established for employees of the agricultural sector and home workers. The group of the most rarely used criteria of differentiation of the minimum wage includes the size of the enterprise, the number of dependents of the employee, his (her) health status.
However, the problem of differentiation of the minimum wage is urgent for states where the minimum wage is rather high, considerably exceeding the minimal living standard. Establishment of a lower minimum wage for some groups of employees is a measure of a short-time character and is applied upon certain economical or social conditions only. After an adoption of a decision on a differentiation of the minimum wage in Lithuania, an essential reduction of its level should be avoided. On increase of the general level of the minimum wage in the state, it may be frozen for certain groups of employees.
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Authors retain copyright of their work, with first publication rights granted to the Association for Learning Technology.
Please see Copyright and Licence Agreement for further details.
