Wage regulation refers to attempts by a government to regulate wages paid to citizens.

Minimum wage

Minimum wage regulation attempts to set an hourly, or other periodic monetary standard for pay at work. A recent example was the U.K.

National Minimum Wage Act 1998 The National Minimum Wage Act 1998 creates a minimum wage across the United Kingdom.. E McGaughey, ''A Casebook on Labour Law'' (Hart 2019) ch 6(1) From 1 April 2022 this was £9.50 for people age 23 and over, £9.18 for 21- to 22-year-olds, £6 ...

. Germany is currently debating whether to introduce its own.

Collective bargaining

Collective agreements between

trade unions A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...

and employers can regulate wages of workers according to the needs of the business.

Arbitration

Arbitration involves makes collective agreements between trade unions and employers legally binding and mediated through a state appointed judge or magistrate.

Economic labour theory

An economic analysis of the law holds very simply that any intervention in a contract between two parties creates an inefficient labour market. Wages kept artificially high, by imposing any administrative or monetary costs on employers distorts the labour market equilibrium. For a national economy in a globalised world, that means jobs will go overseas and the

unemployment rate Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is people above a specified age (usually 15) not being in paid employment or self-employment but currently available for work during the refere ...

rises. Major proponents of this sort of labour economics include Nobel Prize winner from the University of Chicago, Professor

Gary Becker Gary Stanley Becker (; December 2, 1930 – May 3, 2014) was an American economist who received the 1992 Nobel Memorial Prize in Economic Sciences. He was a professor of economics and sociology at the University of Chicago, and was a leader of ...

. Professor Becker keeps a blog with well-known academic and judge,

Richard Posner Richard Allen Posner (; born January 11, 1939) is an American jurist and legal scholar who served as a federal appellate judge on the U.S. Court of Appeals for the Seventh Circuit from 1981 to 2017. A senior lecturer at the University of Chic ...

. Posner is a lawyer and economist, and wrote a book called ''Economic Analysis of Law''. His starting assumption is that unions are the cartelisation of the labour market. Both would agree, that if its aim is to improve the living standards of society, wage regulation defeats itself. Posner says, “Economics is not a theory about consciousness. Behaviour is rational when it conforms to the model of rational choice, whatever the state of mind of the chooser.”Posner, Richard, (1998) ''Economic Analysis of Law'', 5th Edition, p.4 So any conscious attempt to improve working standards are impossible under this view.

References

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Regulation Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context. ...

Public economics Regulation

Minimum wage

Collective bargaining

Arbitration

Economic labour theory

See also

References