Minimum Wage History, and Why Countries without it Fare Better

Minimum wages have gone through a lot since capitalism took roots on earth, beginning from feudalism. A version of its history dates it back to England when the Black Death nearly extinguished the labour force landowners depended on. Law of demand and supply kicked, and the costs of laboir soared. Landowners offered wages so high so that King Henry had to protest. A maximum wage the followed. No labourer’s pay grade could offer anything beyond that cap. And when supply overwhelmed demand again, labour costs plummeted. Then a minimum wage followed—a floor below which no labourer offered his service.

Another version of the yarn put religious leaders at the forefront of the agitation—against the so-called Just Wages. The landowner couldn’t have been more unjust with the wages they paid. The complaint went like the peasant sweating away in the sun lacked the bargaining power to make the wages just.  A law eventually came into force to establish a minimum wage a labourer could earn. The paymasters eventually tied the value of the wages to food—what the labourers needed to earn their crust.

Today, with over supply of labour, and extreme capitalism thriving in a mixed market, minimum wage laws have only helped a pinch.

According to Minimum Wages. Org, over 200 countries have enacted the law. A number of states have yet to see reason for one. Ethiopia, Eritrea, Somalia—in Africa, according to ILO. Then Sweden, Norway, and Denmark, Finland, Iceland. Likewise Switzerland and Lichtenstein. Then there are Singapore, Hong Kong, and Austria. Saudi Arabia, too. And Germany

For the Nordic countries, they must have see a minimum wage law as unnecessary. The countries have strong labour unions who can hold their own in collective bargaining with employers. What do you expect—in countries with best human development indices around the world?

The African experience differs. Poor standards and high costs of living ravage the land. It gets worse in those countries with no minimum wage law. Ethiopia, for instance, has one of the lowest minimum wages—$22.