Raising the rate: An evaluation of the uprating mechanism for the minimum wage

Abstract

Examines the issue of uprating the minimum wage. Argues that this issue is nearly as important as the level of the minimum wage, but one that has been relatively neglected. Maintains that Britain lacks an adequate uprating mechanism and outlines some consequences of this. Argues that increases in the UK have had an erratic pattern that may be related to the electoral cycle. Drawing upon experience in the USA, argues that the lack of an adequate mechanism may lead to: avoidable and intense political lobbying; greater instability and uncertainty for low paying firms; and unfairness to those on or near minimum wages, who are then held captive to the vagaries of the political process to maintain the value of their incomes. Considers the possible form of any uprating mechanism with an overview of the US and French experience. Argues that any uprating mechanism must not only maintain the value of the minimum wage in relation to inflation but also to those of more highly paid workers.

Citation

Sachdev, S. (2003), "Raising the rate: An evaluation of the uprating mechanism for the minimum wage", Employee Relations, Vol. 25 No. 4, pp. 405-415. https://doi.org/10.1108/01425450310483406