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Abstract
Modern minimum wage systems have operated for more than a century. Some Pacific countries were among the pioneers in establishing minimum wages. Minimum wage systems are used to achieve many aims, some of which conflict. These aims include promoting social justice, alleviating poverty, promoting economic development, setting benchmarks for other wages and social security payments, and controlling inflation. The Asia Pacific region has only a small number of countries with adequate minimum wage systems. There are many deficiencies in the various systems. They often do not cover all workers, are often set at unrealistically low levels, or are enforced inadequately.
Introduction
Minimum wage laws are a common feature of industrial relations systems in many countries. The main ILO convention on minimum wages, ILO Convention 26, has one of the highest ratifications by national governments. When this convention was adopted in 1928, the ILO' s concern was to provide 'fair wages' and ensure that global trade was not based on cheap labour. These are still key reasons for being concerned with maintaining adequate minimum wage systems, but other concerns have been addressed through minimum wage machinery too. These aims sometimes come into conflict with one another, which puts minimum wage systems in most countries under strain. The forces of globalization put further pressure on the minimum wage systems in both the developing countries and the advanced countries.
This paper examines some of these issues within the context of the Asia Pacific region. The main sections of the paper deal in turn with the history of minimum wage systems, the position of minimum wage systems within international law, the different objectives loaded onto minimum wage systems, the different forms of minimum wage system in practice, and a brief overview of minimum wages in the Asia Pacific region. The longest section of the paper addresses the problems of implementing effective systems: the issues of coverage, level, compliance, the pressures of globalization, and the role of the social actors, particularly government.
Origins and Early History
The concept of a fair wage or a minimum rate for particular occupations is not new. Mesopotamia's Hammurabi Code of 2000 BC (Starr, 1981) is probably the earliest intervention of this kind. The Statute of Apprentices introduced a system of minimum...