Minimum wage
Atomic claims
A minimum wage is the lowest remuneration that employers may legally pay workers.
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Minimum wages can be set by statute.
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Most countries have a minimum wage.
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Minimum wage levels vary widely among countries.
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The way minimum wage rates are set varies widely among countries.
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The effects of the minimum wage on employment are a long-running subject of empirical dispute in economics.
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The ILO defines a minimum wage as the minimum remuneration an employer must pay wage earners for work performed in a given period.
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According to the ILO, a minimum wage cannot be reduced by collective agreement.
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New Zealand's Industrial Conciliation and Arbitration Act 1894 is generally cited as the first national minimum wage law.
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Victoria, Australia, set up wages boards in 1896.
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The United Kingdom introduced trade-specific minimums under the Trade Boards Act 1909.
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The UK National Minimum Wage Act 1998 became effective in April 1999.
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Massachusetts passed the first US state minimum wage law in 1912.
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The US Supreme Court struck down a minimum wage law in Adkins v. Children's Hospital in 1923.
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The US Supreme Court reversed its stance on minimum wage laws in West Coast Hotel Co. v. Parrish in 1937.
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The Fair Labor Standards Act of 1938 set the first US federal minimum wage.
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The initial US federal minimum wage was set at $0.25 per hour.
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The US federal tipped cash wage is $2.13.
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Thirty US states set minimum wages above the federal rate.
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The District of Columbia sets a minimum wage above the federal rate.
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About 1 percent of US hourly-paid workers earned at or below the federal minimum wage in 2023.
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ILO instruments include Convention No. 26 (1928).
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About 90 percent of ILO member states have a minimum wage.
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An estimated 327 million wage earners globally are paid at or below the minimum wage.
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Germany introduced a statutory national minimum wage of €8.50 per hour on 1 January 2015.
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Denmark has no statutory national minimum wage.
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Denmark relies on collective bargaining for minimum wages.
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EU Directive 2022/2041 sets a framework for adequate minimum wages.
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EU Directive 2022/2041 does not fix a common minimum wage level.
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Denmark challenged EU Directive 2022/2041 in the Court of Justice.
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The Court of Justice ruled on Denmark's challenge (Case C-19/23) in November 2025.
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The Court of Justice is widely reported to have upheld most of EU Directive 2022/2041 while annulling certain provisions.
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The standard competitive model in economics predicts that a binding minimum wage reduces employment.
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Monopsony models in economics predict neutral or positive employment effects of a minimum wage over some range.
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A 1994 study by Card and Krueger found no employment decline in New Jersey fast-food restaurants after a 1992 minimum wage increase.
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Neumark and Wascher (2000) disputed Card and Krueger's findings using payroll data.
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A 2019 study by Cengiz et al. found little net job loss across 138 US state-level minimum wage changes.
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A 2022 study by Jardim et al. found reduced hours for low-wage workers after a minimum wage increase in Seattle.
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A 2022 study by Dustmann et al. found that Germany's 2015 minimum wage raised wages without lowering employment.
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The Congressional Budget Office estimated in 2019 that a $15 federal minimum wage by 2025 would raise pay for 17 million workers.
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Researchers disagree on how well minimum wages target poor households compared with tax credits.
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The EU Directive 2022/2041 references 60 percent of the median wage.
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Minimum wage laws were initially implemented at the national level in the late 19th century.
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The initial implementation of minimum wage laws was intended to protect vulnerable workers from exploitation in sweatshops.
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Minimum wage laws have become a standard labor market policy worldwide.
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The economic impacts of minimum wages regarding employment levels remain a subject of ongoing empirical research and theoretical debate among economists.
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The United States established its federal minimum wage in 1938.
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In 1928, the International Labour Organization (ILO) adopted the Minimum Wage-Fixing Machinery Convention (No. 26).
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The ILO Minimum Wage-Fixing Machinery Convention (No. 26) urged member states to implement minimum wage systems for trades where wages were exceptionally low.
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Minimum wage policies can be established by national statutes.
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Minimum wage policies can be established through binding collective bargaining agreements between trade unions and employers.
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According to the ILO, as of 2020, approximately 90% of member states have some form of minimum wage system in place.
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In standard neoclassical economic theory, a minimum wage acts as a price floor in the labor market.
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Standard neoclassical economic models predict that a minimum wage set above the market equilibrium wage will reduce the quantity of labor demanded by employers.
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In 1994, economists David Card and Alan Krueger conducted an empirical study examining fast-food restaurants in New Jersey and Pennsylvania.
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The 1994 Card and Krueger study catalyzed new empirical methodologies in labor economics.
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Economists continue to debate the extent to which minimum wage increases lead to job losses or reduced hours.
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The debate regarding minimum wage employment effects focuses particularly on low-skilled, entry-level, and teenage workers.
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Some empirical studies and meta-analyses show slight negative employment effects from minimum wage increases.
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Near-zero negative employment impacts suggest labor markets may have monopsony power.
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Near-zero negative employment impacts suggest employers adjust to minimum wage increases in ways other than reducing employment.
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The effectiveness of the minimum wage as an anti-poverty tool is contested.
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Proponents argue that minimum wage directly increases the baseline incomes of the working poor.
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Many minimum wage earners belong to non-poor households.
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There is disagreement over how businesses absorb the costs of minimum wage increases.
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Research varies on how much of the increased labor cost from minimum wages is passed on to consumers through higher prices.
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Whether minimum wages should track median wages is a normative and policy dispute.
Alternatives like the Earned Income Tax Credit (EITC) are more efficient at reducing poverty than the minimum wage.
External references: Wikidata Q186228