Chapter IV. Criteria for fixing and adjusting minimum wages

274. Minimum wages are fixed and adjusted on the basis of certain criteria. The conclusions of the Meeting of Experts convened by the Governing Body to examine the problem of minimum wage fixing identified four basic criteria which should be taken into account: (a) the needs of the worker; (b) the employers' capacity to pay, in relation to the national economy as a whole; (c) a comparison of the standard of living of various social groups; and (d) the requirements of economic development. (Endnote 1) These four criteria are mentioned in more recent studies as basic elements used in fixing minimum wage rates. (Endnote 2) The first three of the criteria mentioned above may be considered as traditional principles used in fixing the levels of minimum wages. (Endnote 3) As regards the requirements of economic development, the importance of this criterion in fixing minimum wage rates came to be emphasised subsequently as a social and economic framework for the fixing of minimum wages. (Endnote 4) In addition, other criteria can be useful; the Meeting of Experts also mentioned the general level of wages paid for work of comparable character, the wages fixed by collective agreements for identical or similar work, and the value of the service rendered. (Endnote 5) It is also interesting to note that the experts who met to examine the question of minimum wage fixing did not draw any distinction between the criteria used for fixing minimum wages and the criteria used for adjusting them. (Endnote 6) Nevertheless, it is generally not feasible to take all these criteria into account each time minimum wage rates are adjusted; consequently, simplified criteria are widely used for this purpose. (Endnote 7)

275. The Committee will examine first the criteria related to the needs of workers and their families, and secondly, the criteria related to the economy, indicating, as appropriate, where the criteria used in adjusting minimum wage rates differ from those used in fixing them. Nevertheless, the following examination of criteria used in fixing and adjusting minimum wages is not limited to the content of such criteria, but also analyses when and how minimum wages are adjusted in the event that adjustment procedures differ from those for fixing minimum wages, as noted in Chapter II; and the difficulties encountered in fixing or adjusting minimum wages owing to changes in the national and international economic situation.

A. Criteria related to the needs of workers and their families

1. Definition of the criteria contained in the instruments

276. Although Conventions Nos. 26 and 99 contain no provisions concerning the criteria to be taken into account in fixing minimum wages, Recommendations Nos. 30 and 89 both envisage that in fixing the minimum rates of wages the wage-fixing body should in any case take account of the necessity of enabling the workers concerned to maintain a suitable standard of living (Recommendation No. 30, Part III, and Recommendation No. 89, Part I, Paragraph 1). This is the only criterion which the Conference was able to adopt; from the outset, it was envisaged as a provision to be included in a Recommendation, and was not viewed as a sufficiently specific or satisfactory basis for guaranteeing minimum wage protection. (Endnote 8) Given the difficulty of determining objectively and generally what such a suitable standard of living should be, the instruments also identify factors which may be used in such a determination. Recommendation No. 30 provides that: "For this purpose regard should primarily be had to the rates of wages being paid for similar work in trades where the workers are adequately organised and have concluded effective collective agreements, or, if no such standard of reference is available in the circumstances, to the general level of wages prevailing in the country or in the particular locality" (Part III). As can be seen, two different factors are recommended, but the instrument specifies that the first one (i.e. a comparison with rates of wages paid for similar work in trades where effective collective agreements exist) will be sufficient where such a comparison is possible, while the second factor should be used only in the absence of the first one. The wording of this provision of Recommendation No. 30 acknowledges the relative nature of the concept of a "suitable standard of living"; this standard must be assessed in the light of the standard of living of the general population, from the standpoint of both equity and overall economic and social policy. (Endnote 9)

277. Recommendation No. 89, which refers also to the necessity of guaranteeing a suitable standard of living for agricultural workers, stipulates that "Among the factors which should be taken into consideration in the fixing of minimum wage rates are the following: the cost of living, fair and reasonable value of services rendered, wages paid for similar or comparable work under collective bargaining agreements in agriculture, and the general level of wages for work of a comparable skill in other industries in the area where the workers are sufficiently organised" (Part I, Paragraph 2). Unlike Recommendation No. 30, Recommendation No. 89 does not set priorities among these criteria. Moreover, it adds two additional factors, namely the cost of living, and the fair and reasonable value of services rendered.

278. Convention No. 131 contains provisions on the criteria to be used in determining the level of minimum wages. It provides that the needs of workers and their families, together with economic factors, shall be taken into account in determining the level of minimum wages, in so far as possible and appropriate in relation to national practice and conditions, and in the light of the general level of wages in the country, the cost of living, social security benefits, and the relative living standards of other social groups (Article 3(a)). Social security benefits, which must be taken into account when considering the needs of workers and their families, are introduced as a new criterion, not mentioned in earlier Recommendations. In addition, the instrument insists on the need to consider the relative living standards of other social groups. On the other hand, this Convention drops any reference to the fair and reasonable value of services rendered, and to the wages paid for similar or comparable work under collective bargaining agreements. Recommendation No. 135 adds only a reference to changes in the cost of living (Part II, Paragraph 3) to the criteria listed in Convention No. 131.

279. The Committee draws attention to the fact that the consideration of social criteria, such as the needs of workers and their families, cannot be independent of certain economic conditions. Therefore, these criteria must be taken into account in close association with the economic factors mentioned in Convention No. 131 and Recommendation No. 135 (respectively, Article 3(b), and Part III, clause (f)). In this connection the Committee recalls that it has had occasion, in comments addressed to governments, to point out that, when determining minimum wage levels, consideration must be given to social as well as economic criteria, and to the close relationship between the two. (Endnote 10)

280. Moreover, Recommendation No. 135 states that "Minimum wage rates should be adjusted from time to time to take account of changes in the cost of living and other economic conditions" (Part V, Paragraph 11), and that "To this end a review might be carried out of minimum wage rates in relation to the cost of living and other economic conditions, either at regular intervals or whenever such a review is considered appropriate in the light of variations in a cost-of-living index" (Part V, Paragraph 12). The Committee will review the question of the timing of minimum wage rate adjustments below; here, it will limit itself to examining the criteria to be used for the purposes of such adjustments. The criteria for fixing minimum wages may be identical to those used for adjusting them, although it may not always be feasible to examine all criteria each time minimum wage rates are to be adjusted. The provisions of Recommendation No. 135 concerning the adjustment of minimum wage rates seem to suggest the advisability of adopting criteria which, if not simple, are at least dynamic in nature and easier to evaluate. A more detailed study of this issue stated that: "Criteria such as the needs of workers and their families, capacity to pay and comparable wage and income levels are essentially ways of determining the most appropriate relative position for minimum wages in the wage and income hierarchy. Once fixed at this level the two dynamic criteria are a simplified means of ensuring that they remain at it with the passage of time." (Endnote 11) Thus, an examination of the criteria adopted in the national legislation and practice of different countries should draw a distinction based on when such criteria are applied, namely, in fixing or in adjusting minimum wages.

281. Finally, the Committee recalls that the minimum wage implies that such a wage must be sufficient for the subsistence needs of workers and their families. Thus, the meeting of subsistence needs are both a criterion of minimum wage fixing and one of the objectives of the Convention. Nevertheless, the needs of workers and their families cannot be considered in a vacuum; they must be viewed in relation to the country's level of economic and social development. (Endnote 12) Moreover, it is important to remember that the practical application of this criterion implies an evaluation which requires taking into account other elements, such as those listed in Recommendation No. 135 (Part I, Paragraph 3(b) to (e)).

282. The minimum wage fixing criteria specified in the various instruments in question do not represent precise models; nor do they pretend to give final and unequivocal answers to questions on how suitable minimum wage levels should be determined in a given situation to contribute as effectively as possible to the general welfare. The relative weight given to these elements, and to the anticipated impact of their interaction, is a subjective choice. Consequently, it is indispensable that information concerning these various elements be as complete and reliable as possible, and that it be fully accessible to all parties concerned, and especially to organisations of employers and workers in the context of minimum wage fixing and adjustment, thereby enabling them to make their observations which will surely contribute to clarifying the question.

2. Application of criteria

283. An analysis of available information shows that the criteria used in fixing minimum wage rates are in some cases identified in the relevant legislative texts, while in other cases they are determined by governments in the apparent absence of specific legislative provisions. The Committee will review all such criteria independently of whether they are contained in legislative texts or have simply been reported in the information communicated by governments.

284. National legislation or information furnished by the governments of some countries merely indicates that the social and economic needs of workers and their families are taken into consideration in the fixing, adjustment or review of minimum wages. (Endnote 13)

285. In other countries these needs are defined in greater detail. In the following countries, they may refer to material, social, moral or cultural needs, and concern housing, food, education, health, leisure, clothing, hygiene, transport, social security or the practice of sports. This is the case in Brazil; (Endnote 14) Canada, Province of New Brunswick; (Endnote 15) Chad; Dominican Republic; (Endnote 16) Guatemala; (Endnote 17) Honduras; (Endnote 18) Mexico; (Endnote 19) Nicaragua; (Endnote 20) Panama; (Endnote 21) Poland; Portugal; (Endnote 22) Romania; Syrian Arab Republic; (Endnote 23) Turkey; United Kingdom, as regards agriculture in Northern Ireland; (Endnote 24) United States (in the States of Arizona, (Endnote 25) California, (Endnote 26) Colorado, (Endnote 27) Kansas, (Endnote 28) New Jersey, (Endnote 29) New York, (Endnote 30) North Dakota (Endnote 31) and Wisconsin), (Endnote 32) and Yugoslavia. (Endnote 33)

286. Moreover, as regards these needs, the legislation of some countries, or the information on national practice furnished by governments, states that some or all of the elements mentioned in Convention No. 131 (especially the cost of living and changes in the same, and average wages) are taken into account. This is the case in Algeria; (Endnote 34) Austria; Bangladesh; (Endnote 35) Belgium; Benin; Botswana; (Endnote 36) Brazil; Bulgaria; Burundi; Canada, as regards federal practice and the Provinces of Newfoundland, Ontario, Quebec and Saskatchewan; Chile; Colombia; Czechoslovakia; Dominican Republic; (Endnote 37) Ecuador; Egypt; Fiji; France; (Endnote 38) Gabon; (Endnote 39) Ghana; Guatemala; (Endnote 40) Guinea; Equatorial Guinea; (Endnote 41) Guyana; Honduras; (Endnote 42) Hungary; India; Islamic Republic of Iran; Israel; Japan; (Endnote 43) Kenya; Luxembourg; Morocco; Mozambique; Myanmar; Nepal; Netherlands; New Zealand; Nicaragua; (Endnote 44) Nigeria; Pakistan; (Endnote 45) Panama; Peru; (Endnote 46) Philippines; (Endnote 47) Portugal; (Endnote 48) Qatar; Saudi Arabia; Spain; (Endnote 49) Sri Lanka; Swaziland; Syrian Arab Republic; (Endnote 50) Trinidad and Tobago; (Endnote 51) Tunisia; Turkey; United Kingdom, as regards agriculture in Scotland; United States (at federal level and in the States of California, (Endnote 52) North Dakota, (Endnote 53) Illinois, (Endnote 54) Michigan, (Endnote 55) New Hampshire, (Endnote 56) New Jersey (Endnote 57) and Washington); (Endnote 58) Yugoslavia; Zambia; and Zimbabwe.

287. In other countries the various needs of workers which serve as parameters in fixing minimum wages are expressed in the form of a "basic family basket". This is the case in Argentina; Belarus; Ecuador; Nicaragua; (Endnote 59) Panama and Yugoslavia. In Honduras this "basket" refers only to basic food needs.

288. Other criteria stipulated in legislation or used in national practice in the fixing of minimum wages include forms of work, (Endnote 60) the facilities made available to agricultural workers and the specific conditions of their work, (Endnote 61) the fact that some employers may be required to provide their workers with food and housing, (Endnote 62) the particular conditions of each region, (Endnote 63) the financial situation of enterprises, (Endnote 64) and the impact and effects of the minimum wage on the progression of other wages, (Endnote 65) the value of the materials and tools needed by the worker for his work, (Endnote 66) the mobility of labour in the different sectors of the economy, (Endnote 67) the fact that the minimum wage must guarantee social protection to vulnerable groups of workers such as domestic workers, workers in the informal sector and workers in rural areas, (Endnote 68) the average number of (adult) members of the family who are working. (Endnote 69)

289. The Committee draws attention to the fact that the information supplied by governments does not always specify whether the needs of the workers' entire family are taken into account. In the case of Czechoslovakia, according to information supplied by the Government, the minimum wage must guarantee only the satisfaction of the basic needs of the worker, but not those of his family. The satisfaction of the needs of family is assured by means of supplementary incomes, which, if they are insufficient, are increased with the aid of social assistance bodies. In Poland, according to information provided by the Government, the changes in the conditions of economic development in the country should enable not only the needs of workers to be taken into account, but also those of their families.

290. Finally, in some countries the body responsible for fixing minimum wages is free to decide which elements are taken into consideration in fixing the minimum wage (Endnote 70) or which elements are considered in addition to those established by law. (Endnote 71)

B. Criteria related to economic factors

1. Criteria contained in Convention No. 131 and in Recommendation No. 135

291. Convention No. 131 and Recommendation No. 135 provide that in determining the level of minimum wages, "economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment" should be taken into consideration so far as possible and appropriate in relation to national practice and conditions (Article 3(b), and Part II, Paragraph 3(f), respectively). In the texts proposed by the Office for the second discussion of the question at the 54th Session of the Conference, the provisions of the proposed Convention did not coincide with those of the proposed Recommendation. The former mentioned only the desirability of attaining and maintaining a high level of employment, while the latter called for account to be taken of economic development plans, the levels of employment, unemployment and underemployment, the capacity of employers in general to pay, the balance of payments and the rate of increase in productivity. (Endnote 72) Thus, although neither of the instruments in its final form mentions any of the other criteria which had been proposed, it should be noted that there is nothing to prevent these factors from being considered in fixing minimum wage levels; likewise, other economic factors may be taken into account. Nevertheless, the three factors specifically mentioned in Convention No. 131 and in Recommendation No. 135 must be taken into account to the extent possible and appropriate, in accordance with national practice and conditions.

292. In its conclusions, the Meeting of Experts of 1967 emphasised that, without ignoring the elements linked to the needs of workers and their families, "minimum wages cannot be set without taking account of the total social and economic context, including the amount of unemployment, the size of the peasant population and the existing relationship between peasant incomes and wages, both rural and urban (...) the process of wage determination must take into account the proper role of wages in creating markets for mass production of consumer goods, as well as the likely impact of wage changes on the volume of employment". (Endnote 73)

2. Application of the criteria

293. The above-mentioned criteria are sometimes mentioned in national legislation, but in other cases are simply applied in practice, without a basis in law. The Committee will review both kinds of application of the criteria without distinction, reflecting the information communicated by governments.

294. In certain countries national legislation or national practice, as reported by the governments, calls for the criteria listed in Convention No. 131 and Recommendation No. 135 to be taken into account. (Endnote 74) In other cases, countries indicate in general that they take into consideration the situation or level of the country's economic and social development, including the requirements of such development, at national level, and at regional or provincial level where appropriate. This is the case in Australia, where the Australian Industrial Relations Commission, when issuing a minimum wage award, takes account of the public interest and the situation of the national economy as well as the likely effects of the minimum wage rates on the level of employment and inflation. (Endnote 75) Economic difficulties led to the introduction in 1987 of a new system of wage adjustment and revision. In the states, the public interest (Endnote 76) and economic factors (Endnote 77) are also taken into account by the minimum wage fixing bodies. Criteria related to the general economic situation of the country are also taken into account in Bangladesh, (Endnote 78) Bulgaria, Canada, in the Provinces of New Brunswick (Endnote 79) and Saskatchewan, Colombia, (Endnote 80) Cuba, (Endnote 81) Guinea, Mexico, Morocco, Pakistan, (Endnote 82) Panama, Peru, (Endnote 83) Portugal, Romania, Spain, Syrian Arab Republic, Turkey, (Endnote 84) and Yugoslavia (in respect of each republic). Moreover, the following countries also report that, in general, consideration is given to the economic situation of the economic sector in question, the capacity of the industry to pay, or market conditions: Austria, Colombia, (Endnote 85) Honduras, Mexico, Netherlands, Panama and United Kingdom. (Endnote 86)

295. The following countries indicated, with reference to the provisions of the instruments under examination, that they take account, in the determination of minimum wage levels, of employment-related criteria: Canada (in the Provinces of New Brunswick, (Endnote 87) Ontario and Quebec (Endnote 88)), Chile, Czechoslovakia, Guinea, Honduras, Hungary, Mexico, Netherlands, New Zealand, Panama, Philippines, Portugal, Syrian Arab Republic, United States, (Endnote 89) and Zimbabwe.

296. In Bulgaria, Cuba, (Endnote 90) Guinea, Honduras, Hungary, Portugal, Romania, Spain, Yugoslavia (Endnote 91) and Zimbabwe productivity levels or trends are taken into account as criteria in fixing minimum wages.

297. In addition, certain countries take into account such specific factors as: the level of government and European Community subsidies in United Kingdom; (Endnote 92) income redistribution and investment policy in Panama; or the concept of a reasonable return on private investment in Canada (Endnote 93) and the Philippines; (Endnote 94) the suitability of minimum wages to income and price policies in Portugal; the increase in workers' participation in national income in Spain.

C. Minimum wage adjustments

1. The timing and frequency of adjustments

298. The instruments examined here establish various criteria as regards the timing and frequency of the adjustment of minimum wages. In this connection, the Committee points out that these instruments seem to use the terms "adjustment", "review" and "revision" interchangeably. Recommendations Nos. 30 and 89 use the terms "review" and "revise" (Part III and Paragraph 7, respectively), while Convention No. 131 and Recommendation No. 135 use the term "adjust"/"ajuster" in the English and French versions (Article 4(1), and Part II, Paragraph 11, respectively); the Recommendation, however, also uses the term "review" in the English version (Part V, Paragraph 12).

299. The Committee has observed that the legislation of certain States draws a distinction between adjustment and review. The term "adjustment" should be understood to refer to operations undertaken with a view to adapting minimum wage rates to economic changes, in order to maintain the purchasing power of workers' wages. The term "review" should be understood to denote operations which modify minimum wage rates, independently of their adjustment, with a view to increasing the purchasing power of the workers concerned. In this case, economic factors are not taken into account to adapt minimum wage rates to a new economic situation, but rather to make it possible to determine the extent to which the national economy allows or requires a real increase in minimum wages and, consequently, in the purchasing power of workers earning the minimum wage.

300. As the Committee has noted, the legislation of some States draws this distinction, while others do not, and use the term "review" to designate what are in fact "adjustment" operations, or vice versa. For present purposes, the Committee will in each case use the terminology employed in national legislation; where the terms "adjustment" and "review" are not explicitly used, the Committee will use the term that corresponds to the operation in question.

301. The Committee will refer separately to each of the criteria concerning the timing and frequency of adjustment or review operations stipulated in the instruments in question.

1.1. Review at the request of workers and employers or their organisations

302. Recommendation No. 30 stipulates that "Provision should be made for the review of the minimum rates of wages fixed by the wage fixing bodies when this is desired by the workers or employers who are members of such bodies" (Part III). This provision seeks to ensure that measures will be taken to proceed with a review, not automatically or periodically, but rather at the request of workers or employers who are members of minimum wage fixing bodies. (Endnote 95)

303. Though not stated explicitly in the Recommendation, a review of minimum wage rates may be undertaken at the request of workers' or employers' organisations, even if they are not members of the bodies responsible for fixing such rates.

1.2. Review at appropriate intervals

304. Recommendation No. 89 states that "Provision should be made for a procedure for revising minimum wage rates at appropriate intervals" (Part III, Paragraph 7). This provision leaves great leeway for setting the timing of minimum wage adjustments, for it specifies no frequency or procedures for initiating such adjustments, but leaves it to the competent authorities to undertake a review of minimum wage rates at intervals they judge to be appropriate.

1.3. Review from time to time

305. Convention No. 131 provides that "Each Member which ratifies this Convention shall create and/or maintain machinery adapted to national conditions and requirements, whereby minimum wages ... can be fixed and adjusted from time to time" (Article 4, paragraph 1). Recommendation No. 135 also stipulates that "Minimum wage rates should be adjusted from time to time to take account of changes in the cost of living and other economic conditions" (Part V, Paragraph 11). These two provisions, and especially the latter one, reflect the conclusions of the Meeting of Experts convened by the Governing Body to examine the question of minimum wage fixing machinery. (Endnote 96) In addition, there is clearly a link between the need to take into account certain criteria for the adjustment of minimum wage rates and the time at which such adjustments should take place. In this connection, Recommendation No. 135 suggests that "... a review might be carried out of minimum wage rates in relation to the cost of living and other economic conditions, either at regular intervals or whenever such a review is considered appropriate in the light of variations in a cost-of-living index" (Part V, Paragraph 12). At any rate, none of the above-mentioned provisions call for automatic adjustments.

1.4. National legislation and practice

306. An analysis of available information again leads to a distinction between countries in which the adjustment or review of minimum wages is expressly provided for in their legislation, and other countries in which such adjustment or review is carried out independently of any legal provision. In this section the Committee will refer to the manner in which member States proceed with such operations, independently of whether or not there is legislation on the subject.

307. In Angola, according to information supplied by the Government, wages are not adjusted periodically, but about one year after the entry into force of the current wage scale wage rates were adjusted by up to 20 per cent in conformity with the national legislation. (Endnote 97) In Algeria the national guaranteed minimum wage is adjusted whenever account has to be taken of changes in the cost of living and of other economic circumstances in the country. In Argentina national legislation calls for the basic minimum wage to be set periodically, and also provides for the possibility of modifying the minimum wage prior to the expiry of the period during which it is to be in force, at the request of any of the sectors represented on the National Basic Minimum Wage Board, whenever there is a variation of 15 per cent in the cost-of-living index. Nevertheless, such modifications may not be carried out at intervals of less than 180 days. (Endnote 98) In Australia, at the federal level, minimum wages are adjusted by decisions of the Australian Industrial Relations Committee, known as "National Wage Cases"; this is normally done once a year. In its 1987 decision, the Commission established the framework within which minimum wage rates are to be fixed and adjusted: a two-tier wage system was introduced under which an overall increase in wages was decided during a first phase and, during a second phase, additional increments were granted on the basis of certain principles established by the Commission. Under this system, at the first level, wages are not adjusted all at once, but intervals may be fixed between the adjustments. In its decision of April 1991 the Commission decided that adjustments should be made at four intervals of six months. From the second to the fourth interval, however, the adjustments would not be automatic, but it would be necessary to request the amendment of the relevant award. (Endnote 99) At a second level a "structural efficiency adjustment" was approved, to which parties meeting certain conditions established by the Commission are entitled. (Endnote 100) In the states of Australia wage adjustments are made taking into account National Wage Cases of the Australian Industrial Relations Commission.

308. In Austria, according to information furnished by the Government, the collective agreements which fix wages remain in force for a period ranging from 12 to 14 months. Negotiations cannot take place without the approval of the Wages Subcommittee, an agency of the Joint Wages and Prices Committee, are normally held in the spring and autumn. In Bangladesh, the Minimum Wages Board must review its minimum wage recommendations whenever there are changes in the economic situation or the cost of living, or as required by other relevant developments. However, minimum wage reviews may not take place earlier than one year or later than three years after the date of the last review, except where special circumstances so require. (Endnote 101) In Pakistan wage reviews are conducted in the same fashion. (Endnote 102) In Belgium wages in general, and in particular the average minimum monthly wage fixed by the National Labour Council, are adjusted automatically to reflect changes in the cost of living. The amount of the minimum guaranteed monthly wage is adjusted on the basis of the arithmetic average of the consumer price index for the last four months, unless a collective agreement, negotiated within the framework of a joint committee, provides otherwise. (Endnote 103) The frequency of modifications depends on the form of wage adjustment. Depending on the branch of the economy in question, the frequency may be monthly, bi-monthly, quarterly or other, or may be tied to the consumer price index. In general, the joint committees negotiate remuneration every two years. In Botswana the national legislation provides that minimum wages may be adjusted when the Minister of Labour and Home Affairs considers this necessary in the light of changes in the cost of living or of any other relevant change. (Endnote 104) According to information supplied by the Government these adjustments are made annually.

309. In Brazil, the Constitution stipulates that the minimum wage shall be adjusted periodically to safeguard its purchasing power. (Endnote 105) The relevant national legislation calls for a Technical Committee to define the basic needs of workers and their families as regards housing, food, education, health, leisure, clothing, hygiene, transport and social welfare, as well as the methodology to be used monthly in measuring the cost of these products and services. On the basis of proposals prepared by the Committee, the Executive branch submits to Congress a Bill which sets forth the applicable rules regarding the adjustment and gradual increase of the minimum wage. (Endnote 106) In Bulgaria, according to information supplied by the Government, the minimum wage is revised when there are changes in all the factors which were taken into account in fixing it. However, a decision still needs to be taken on a policy for the indexation of wages following consultation of the representative organisations of the employers and workers concerned. In Canada, according to information furnished by the Government, the minimum federal wage is adjusted sporadically in the light of social and economic factors. Nor is there a specific frequency in the provinces. (Endnote 107)

310. In Chile, according to information furnished by the Government, the amount of the minimum income is adjusted by law at least once a year, in the light of economic and social conditions. National legislation also stipulates that statutory readjustments shall not apply to the remuneration and benefits stipulated in collective labour agreements, or in arbitration awards in connection with collective bargaining. (Endnote 108) In Columbia, according to information furnished by the Government, the statutory minimum wage is decreed annually. In Côte d'Ivoire, the occupational organisations may ask the Minister of Employment and the Civil Service to convene an advisory labour committee to submit conclusions to the Government with a view to deciding whether the guaranteed minimum inter-occupational wage should be increased. If it is decided to revise the wage rates, the Government will also revise the minimum wages of workers in occupations not governed by collective agreements, such as agricultural workers. In Cuba, the Government has indicated that minimum wages are not adjusted with any pre-established frequency. In practice, the minimum wage is adjusted as needed, according to studies carried out for that purpose, taking into account the possibilities afforded by the country's level of economic and social development. In the Dominican Republic the national legislation provides that minimum wage rates for each economic activity are to be revised ex officio by the National Wages Committee at least once every three years, and that the Committee may in no case consider any request for revision by employers or workers before the rates have been in force for one year. (Endnote 109) However, if either of the parties demonstrates that the application of a wage rate is prejudicial to it and that this prejudice is affecting the national economy, the National Wages Committee may revise the rate before this period has elapsed, changing it at the request of either or both of the parties concerned. According to information supplied by the Government, in practice the Committee has found it necessary to establish two minimum wage rates in one year at the request of the different social partners or of any of its members (employer, worker or government sector).

311. In France the frequency of minimum wage (SMIC) adjustments is linked to trends in the national consumer price index. The index is approved by decree of the Council of Ministers, acting on the recommendations of the National Collective Bargaining Committee. The SMIC is adjusted whenever the index shows a variance of 2 per cent or more with respect to its level on the occasion when the SMIC was last adjusted. In such a case, the minimum wage is adjusted automatically and in proportion to the real price increase. (Endnote 110) In addition, in order to ensure that lowest income wage-earners share in the benefits of the country's economic growth, the Government may, after consulting the National Collective Bargaining Committee, make additional annual adjustments (on 1 July) to the SMIC. (Endnote 111) Lastly, during the course of the year or in connection with the annual balance, and after consulting the above-mentioned Committee, the Government may set the SMIC at a higher rate than would result from the straightforward application of the adjustment machinery described above. (Endnote 112) It should be mentioned that legislation prohibits the inclusion in collective agreements of clauses which call for the adjustment of wages as a function of or by reference to changes in the SMIC. (Endnote 113) It would seem that this prohibition aims at ensuring the effectiveness of the policy of increasing low wages, and at avoiding a destabilisation of automatic adjustments. (Endnote 114) In Spain the minimum inter-occupational wage is normally reviewed each year. (Endnote 115) In addition, minimum wage rates must be reviewed semi-annually where the forecasts for the consumer price index prove to be inaccurate. (Endnote 116) In this connection, the Trade Union Confederation of Workers' Committees (CCOO) states in its observations on the situation of national law and practice regarding minimum wages, that the Government has been failing to comply with its obligation to undertake such semi-annual reviews whenever its consumer price index forecasts prove inaccurate. Similarly, the General Union of Workers (UGT) states that the Government has failed to proceed with semi-annual reviews in any of the recent years in which official estimates of price increases have underestimated actual increases.

312. In Guatemala national legislation provides for the periodic fixing of the minimum wage, but does not specify the frequency. (Endnote 117) According to information furnished by the Government, the minimum wage must be reviewed every six months. In addition, workers and employers in a given intellectual, industrial, agricultural, livestock or commercial activity, representing at least 10 employers and 25 workers, may request the competent joint minimum wage committee to review the minimum wage specified in a current agreement. (Endnote 118) In Honduras national legislation provides that minimum wages shall be reviewed at least once every three years from the date they were fixed or last revised. (Endnote 119) However, according to information furnished by the Government, in practice these wages have been revised at intervals ranging from six months, (Endnote 120) to eight years and six months (Endnote 121) between the first revision to the sixth. In India, the national legislation provides that the appropriate government shall review at such intervals as it may think fit, such intervals not exceeding five years, the minimum rates of wages and revise them if necessary. (Endnote 122) However, according to the information supplied by the Government, the central Government and most of the states follow the recommendations of the Labour Ministers' Conference of 1980, according to which minimum wage rates should be reviewed every two years or when the consumer price index reaches 50 points.

313. In Israel the minimum wage is adjusted once each year so as to ensure that it corresponds to 45 per cent of the average of wages in the country, and also during the year to take account of changes in the cost of living. (Endnote 123) In Italy the national legislation stipulates the method of calculation to be applied for national collective agreements providing for machinery for the automatic adjustment of wages with reference to the cost of living. (Endnote 124) In Luxembourg minimum wages are increased every two years and adapted periodically with reference to variations in the cost of living. A two-and-half point increase or decrease in the cost-of-living index within the past six months entails a corresponding change in these wage rates. (Endnote 125)

314. In Mexico minimum wages are fixed every year and enter into force on 1 January of the following year. The minimum wages may be revised at any time during the time they are in force, provided that the revision is justified by economic circumstances. This revision may come at the initiative or request of the Secretary of Labour and Social Welfare, addressed to the President of the National Minimum Wage Commission, or at the request of trade unions and federations and confederations of workers or of employers, subject to compliance with certain statutory requirements. (Endnote 126) In Nicaragua the minimum wage is fixed periodically and may be reviewed on the request of at least ten employers or 25 workers or two trade union organisations in the same economic activity. The National Minimum Wages Commission adjusts the minimum wage in line with changes in the exchange rate or in the economic and social conditions prevailing at the time the rate was fixed. (Endnote 127) In Panama the legislation provides that the minimum wage shall be fixed periodically, at least once every two years. (Endnote 128) In addition, during the life of the decree which fixes the minimum wage, requests for adjustments to the minimum wage may be addressed to the National Minimum Wage Commission. (Endnote 129) In Peru the Constitution provides that the minimum living wage is to be adjusted periodically by the State with the participation of the representative organisations of workers and employers when circumstances require. (Endnote 130) When there are substantial changes in the factors used as a basis for its determination, the National Committee on the Minimum Living Wage decides on new levels at which this wage is to be fixed. (Endnote 131)

315. In the Netherlands, according to information furnished by the Government, minimum wages are adjusted two times a year, on 1 January and 1 July, based on changes in the wage rates of private sector collective agreements. In addition, every three years consideration is given to the need for a real increase in minimum wages, based on general wage trends and in the light of special reasons which would justify such an increase. Nevertheless, the Government reports that it has submitted a Bill to Parliament which would modify this wage adjustment machinery without, however, explaining the reason for the proposal or describing its substance. In Norway, collective agreements in which minimum wages are fixed are negotiated annually. In Portugal the guaranteed minimum wage must be reviewed annually. (Endnote 132) In the United Kingdom, as regards industry and trade, according to information furnished by the Government with respect to Great Britain, most wage councils meet once or twice a year. The first meeting is held to formulate proposals on minimum wage rates, while the second is held to examine any comments received in this connection. As regards agriculture, according to information furnished by the Government, the competent agricultural wage boards for England and Wales, Scotland and Northern Ireland meet once a year to fix minimum wages.

316. In the Philippines wages are not generally reviewed until a year after they have been in force. However, under special conditions such as an increase in the price of petroleum products and basic goods and services, it may be necessary to review the wage before this period has elapsed. In Sri Lanka, according to information supplied by the Government, minimum wages are adjusted with reference to increases in the cost of living; this may be done every year or every two years. The private sector generally follows the Government's decisions on wage increases. The rates of minimum wages payable to workers in shops and offices may not be reviewed before one year has elapsed since the date on which they were last fixed. (Endnote 133) In Suriname a collective agreement may not be made for more than three years at a time, but it may be extended on condition, however, that the parties do not remain bound by the agreement for more than three consecutive years from the date on which the extension was granted. (Endnote 134) In the Syrian Arab Republic the national legislation provides that minimum wages in the agricultural sector are to be adjusted each year; where necessary, extraordinary sessions of the competent committees are convened by the Minister or muhafez. (Endnote 135) Minimum wages in industry and commerce are normally adjusted each year. (Endnote 136) In exceptional circumstances, such as an economic crisis, monetary inflation or a considerable rise in the cost of living, the Minister may convene all the committees to a general assembly to discuss changes in wages. (Endnote 137)

317. In Czechoslovakia the general agreement provides that minimum wages shall be adjusted in the same proportion as the average increase in the cost of living whenever this increase is greater than 5 per cent. (Endnote 138) The Government also states that the question of indexing the minimum wage will be reexamined with the social partners. In Ukraine, according to information supplied by the Government, wages, including the minimum wage, are adjusted with reference to the increase in retail prices. The Government also states that draft legal texts are being prepared governing minimum wages and the indexation of incomes with reference to rates of inflation in the prices of goods and services. In Yugoslavia, according to information supplied by the Government, all general collective agreements concluded at the level of the republics provided for a wage increase of 0.5 per cent per annum. Moreover, in the event of economic difficulties, it is possible to pay a wage lower than the level fixed in the collective agreement, but not less than 80 per cent of this level.

318. Mention may also be made of other cases in which the information supplied by governments or national legislation is limited to indicating that minimum wages are reviewed or adjusted from time to time, either regularly or whenever the competent authority deems it necessary; (Endnote 139) that these reviews or adjustments may be made every three months; (Endnote 140) every six months; (Endnote 141) each year; (Endnote 142) every two years; (Endnote 143) every three years; (Endnote 144) or with no periodicity. (Endnote 145)

2. Research, surveys and statistics

2.1. Provisions of the instruments

319. The fixing or adjustment of minimum wage rates must be based on certain specific economic and social criteria. Consequently, it is essential to have reliable information, particularly as regards national economic conditions. The report of the Meeting of Experts on minimum wage fixing and related problems highlighted the importance of undertaking surveys as regards such conditions to show when a rise in minimum wage rates would be compatible with development objectives. (Endnote 146) It is not sufficient to define the factors or elements which are to serve as the basis for fixing or adjusting minimum wages if specific and current information on such factors and elements is not available.

320. Unlike the Conventions, the three Recommendations under consideration provide, each in its own way, for research and surveys. Recommendation No. 30 provides that, whatever form minimum wage fixing machinery may take, it should operate "... by way of investigation into the relevant conditions in the trade or part of trade concerned and consultation with the interests primarily and principally affected, that is to say, the employers and workers in the trade or part of trade ..." (Part II, Paragraph 1). Recommendation No. 89 contains a similar provision which states that "minimum wage fixing machinery in agriculture should operate by way of investigation into conditions in agriculture and related occupations, and consultation with the parties who are primarily and principally concerned, namely employers and workers, or their most representative organisations, where such exist" (Part II, Paragraph 3). Finally, Recommendation No. 135 provides that "in order to assist in the application of Paragraph 11 of this Recommendation, periodical surveys of national economic conditions, including trends in income per head, in productivity and in employment, unemployment and underemployment, should be made to the extent that national resources permit", and that "the frequency of such surveys should be determined in the light of national conditions" (Part V, Paragraph 13). In addition, it recommends that "to the extent possible in national circumstances, sufficient resources should be devoted to the collection of statistics and other data needed for analytical studies of the relevant economic factors, particularly those mentioned in Paragraph 3 of this Recommendation, and their probable evolution" (Part IV, Paragraph 10).

321. These instruments therefore contain recommendations concerning the fixing of minimum wages. However, only Recommendation No. 135 expressly advocates that surveys should be undertaken for the purpose of adjusting minimum wages. The Committee considers that surveys, research and the collection of statistical and other data should, in principle, be carried out whenever minimum wages are to be adjusted, with such adaptations as may be needed in connection with the fixing of minimum wage rates. In this connection, the Committee recalls that the Labour Statistics Convention, 1985 (No. 160), calls for the compilation and publication of data which are indispensable for the fixing of wages. The Committee takes this opportunity to call on governments to ratify this Convention.

2.2. National law and practice

322. Many States have legislation on the compilation of labour statistics, whether in application of the relevant international instruments, (Endnote 147) or for the State's own purposes. The Committee will refer exclusively to the information furnished by governments on this subject. Some governments mention legislative provisions concerning research, surveys and statistics in connection with minimum wages, while others merely refer to existing practice. The Committee will refer to both law and practice.

323. Surveys and studies and the compilation of statistical data on economic and social conditions are generally carried out by one or more administrative bodies, which may or may not be exclusively competent for such matters as statistical, economic, wage or labour matters in general. In Angola, the competent body is the Ministry of Planning; in Argentina, the National Basic Minimum Wages Board (Endnote 148) and the National Institute of Statistics and the Census; in Australia, the Australian Bureau of Statistics; in Belgium, the secretariat of the Central Economic Council; in Botswana, the Central Statistical Office and the Employment Policy Unit; in Brazil, the Brazilian Geography and Statistics Institute (IBGE); (Endnote 149) in Bulgaria, the National Statistical Service; in Chad, the Services of the Labour Inspectorate, Economic Affairs and Trade Unions; in Chile, the National Statistics Institute; in Côte d' Ivoire, the Directorate of Statistics and National Accounts; in Cuba, the State Statistics Committee; in Czechoslovakia, the Federal Statistical Bureau, the Czech Statistical Bureau and the Slovak Statistical Bureau; (Endnote 150) in Ecuador, the Central Bank, the National Institute of Statistics and the Census (INEC) and the National Institute of Employment (INEM); in Equatorial Guinea, the General Directorate of Statistics of the Ministry of the Economy, Commerce and Planning; in France, the Ministry of Labour and the INSEE; in Gabon, the Directorate of Statistics of the Ministry of Planning; in Germany, the Federal Statistics Office and the statistical offices of the various Länder; in Ghana, the Statistical Service; in Guatemala, the National Wage Department's economic studies section; in Guinea, the National Statistical Service of the Ministry of Planning and International Co-operation, the National Directorate of Labour and Social Legislation and the National Employment and Manpower Bureau; in Honduras, the General Directorate for Wages; (Endnote 151) in India, the Labour Bureau; in Israel, the Central Bureau of Statistics; in Japan, the Prefectural Labour Standards Office; in Luxembourg, the Common Social Security Centre; in Mexico, the Technical Office of the National Minimum Wage Committee; (Endnote 152) in Myanmar, the Central Statistical Organisation; in the Netherlands, the Central Statistics Office; in Nicaragua, the National Commission on the Cost of Living, the Directorate of Wages and Employment of the Ministry of Labour, the Nicaraguan Institute of Statistics and the Census (INEC), the Department of Social Welfare of the General Inspectorate of Labour and other similar bodies; (Endnote 153) in Pakistan, the Federal Bureau of Statistics; in Peru, the National Institute of Statistics and Computer Science; (Endnote 154) in the Philippines, the National Statistics Office and the Bureau of Labor and Employment Statistics; in Poland, the Central Statistical Office; in Portugal, the Permanent Social Concertation Council; (Endnote 155) in Romania, the National Statistical Commission and the Departmental Statistical Commissions; in Spain, the National Statistics Institute, which comes under the Ministry of the Economy; in Sri Lanka, the Department of Labour, Census and Statistics, the Ministry of Policy Planning and the Statistical Department of the Central Bank of Sri Lanka; in Sudan, the Higher Wages Council; in the Syrian Arab Republic, the Directorate of National Accounts and the Directorate of Social and Population Statistics of the Central Statistical Bureau; in Tunisia, the Ministries of Planning and Social Affairs and the National Statistical Institute; in Turkey, the State Institute of Statistics of the Prime Ministry; in Uganda, the Ministry of Planning and Economic Development; in the United Kingdom, the Ministry of Employment and, as regards agriculture, the Ministry of Agriculture, Fisheries and Food (MFF), (Endnote 156) the Department of Agriculture for Northern Ireland, and the Economics and Statistics Unit of the Scottish Office of the Agriculture and Fisheries Department; in the United States, at the federal level, the Bureau of Labour Statistics and the Employment Standards Administration of the Department of Labor; in Zambia, the Prices and Incomes Commission.

324. In some countries bodies other than public agencies undertake studies, research and surveys, and compile statistical data. In Brazil these bodies are found among trade union and employer circles. In Mexico information may also be obtained from trade union organisations as well as private social and economic research institutions, chambers of commerce and industry, and other similar institutions. (Endnote 157) In Tunisia the trade unions send information to the National Commission on Guaranteed Minimum Wages.

325. In countries where minimum wage fixing machinery includes the participation of wage boards or commissions, joint commissions or other similar bodies, it is common for such boards, commissions or bodies to undertake investigations, studies and surveys on the situation in a given industry, requesting information from enterprises and persons concerned, as well as trade union and employers' organisations. This is the case in Bangladesh, Guatemala, Malta, Pakistan, the Philippines and the United Kingdom (as regards industry and trade).

326. As regards the content and type of studies, research and surveys, national legislation and practice vary considerably. In Belgium, Guatemala, Mexico, Portugal and Romania national legislation or information furnished by the governments shows only that the information collected is economic or social in nature. In other countries, legislation or government replies contain greater details as regards the content and type of studies and surveys, as well as statistical data. These refer in general, but not exclusively, to workers' incomes or trends in income (Argentina, Germany, Ghana, Israel, Mauritius, Pakistan, Spain, Syrian Arab Republic, United Kingdom and United States (Endnote 158)), the average level or trends in wages or purchasing power of the minimum wage (Argentina, Brazil, Chile, France, Hungary, Japan, Morroco, Netherlands, New Zealand, Nicaragua, Philippines, Spain, Sudan, United Kingdom and United States (Endnote 159)), price trends (Argentina, Brazil, Chile, Côte d'Ivoire, France, Gabon, Guinea, Hungary, Japan, Spain, Syrian Arab Republic, United States (Endnote 160)), conditions of employment or trends in the labour market (France, Ghana, Guinea, Honduras, (Endnote 161) Israel, Morocco, Mozambique, Namibia, Pakistan, Philippines, United States (Endnote 162)) the cost or standard of living of the population (Argentina, Botswana, Cuba, Ghana, Honduras, Hungary, Nicaragua, (Endnote 163) Namibia, Peru, (Endnote 164) Philippines, Spain, Trinidad and Tobago, Tunisia, Turkey and United Kingdom), the proportion of workers earning the minimum wage (France), national accounts (Honduras), and the number of hours worked (Guinea, Japan, United Kingdom and United States (Endnote 165)), productivity (Ghana, Mauritius, Philippines, Syrian Arab Republic, United States (Endnote 166)), investments and returns (Philippines), poverty (Trinidad and Tobago) and the informal sector (Trinidad and Tobago).

D. Impact of national and international economic changes on minimum wage fixing and adjustment

327. One of the fundamental objectives of the instruments in question, aside from guaranteeing workers a minimum wage to meet their needs, is to preserve the purchasing power of that wage. Both the criteria set forth in the instruments as regards minimum wage fixing and adjustment, as well as the timing and frequency of this adjustment, help to achieve this objective.

328. The fixing and adjustment of minimum wages is contingent on several microeconomic and macroeconomic factors. Macroeconomic factors seem to have acquired a special importance in recent years, although it is true that Convention No. 131 had already recognised the links between macroeconomic variables and minimum wage fixing. (Endnote 167)

329. These macroeconomic factors have shaped a new reality which directly or indirectly affects minimum wage fixing and revision. It should be recalled that the drastic fall in the price of certain commodities at the international level led to a series of imbalances at the national level, thereby affecting the social policy of the countries concerned. At the same time, the problem of foreign debt grew more acute (more so in some countries than in others); the need to meet their financial obligations placed these countries under significant economic strain. The usual response to this situation was to seek national economic recovery through the so-called "structural adjustment" programmes; these programmes also had an impact on social policy, and on wage policy in particular, and, therefore, on the application of relevant Conventions. (Endnote 168)

330. In a trend that may be attributed to these problems, workers' organisations have for some years been notifying the Committee of Experts cases of the failure to apply, in whole or in part, the minimum wage Conventions in question; in reply, governments have often justified their position by citing their countries' economic situation, foreign debt, and structural adjustment policies. Some of these problems have been examined by the Committee as regards the application of the Employment Policy Convention, 1964 (No. 122); (Endnote 169) in other cases these problems have been brought before other supervisory bodies of the ILO as regards the application of other instruments, such as Convention No. 131. (Endnote 170)

331. In this connection, the Committee recalls its position that, in evaluating national law and practice in relation to the requirements of ILO Conventions, the Committee's function is to determine whether the requirements of a given Convention are being met, whatever the economic and social conditions existing in a given country. Subject only to any derogations which are expressly permitted by the Convention itself, these requirements remain constant and uniform for all countries. (Endnote 171) It is from this perspective that the Committee has examined and will continue to examine the question discussed in the foregoing paragraphs.

332. Questions concerning the consequences of mounting foreign debt, of structural adjustment or of economic recovery policies, have been raised on several occasions within the International Labour Conference. The Conference has adopted a number of resolutions which, in one form or another, concern the need to protect the income levels of workers and the purchasing power of their wages, and to improve the situation of the most disadvantaged groups. (Endnote 172) These resolutions have also recalled the obligation of member States which have ratified the instruments in question to comply with international labour standards concerning wages. In addition, a number of regional conferences have examined this issue. (Endnote 173)

333. The Committee notes that the Governing Body has examined this problem on several occasions. (Endnote 174) The Committee notes the Governing Body's statement once again at its 251st Session (November 1991) that a minimum wages policy should provide the wage floor of the wage structure, and serve also as a social safety net. (Endnote 175)

334. The review of information furnished by governments shows that few of them referred to the impact which structural adjustment programmes may have on wage policies and, in particular, on minimum wage fixing and adjustment; likewise, few governments referred to the difficulties which may arise from such structural adjustment programmes. Other States referred to this question indirectly, stating only that efforts have been made to protect minimum wages in structural adjustment processes, (Endnote 176) even when minimum wages have been kept at a low level in application of these processes (Endnote 177) or providing for moderate wages in conjunction with the services of the IMF. (Endnote 178) Other countries have spoken of an objective to be attained, expressing the hope that structural adjustment programmes will take account of the needs of workers and their families, among other things (Endnote 179) or remarking that they are aware of the problems in connection with the minimum wages of workers when structural adjustment programmes are embarked on. (Endnote 180)

335. The governments of certain countries (Endnote 181) have stated that they are preparing five-year plans which, in addition to the needs of workers and their families, take account of the exigencies of economic development and productivity, and that they have taken the necessary steps at the national level to guarantee the effective application of the provisions on minimum wages.

336. Certain governments have stated that minimum wages constitute an important aspect of policies aimed at eradicating poverty, (Endnote 182) or that minimum wage fixing should take account of the concept of the "poverty threshold" or "poverty wage". (Endnote 183) The governments of other countries state that provision is made within structural adjustment or reform programmes for the maintenance of minimum wage levels to ensure that workers and their families can effectively meet their basic needs, (Endnote 184) and at the same time that they take into account the needs arising from the maintenance of employment levels. (Endnote 185) Other governments report that they have a national development plan or programme which implies growth in economic activity and the existence of stable and well-paid jobs, through actions which protect employment and the real wages of workers, although they admit that they are considering measures to make minimum wages more flexible within the context of their adjustment programmes. (Endnote 186)

337. The governments of other countries where economic, social and political changes are taking place have stated that reform projects, which include a structural readjustment of the economy, have taken account of the needs of workers and their families, as well as the utilisation of existing production capacity, the maintenance of investment and the elimination of unemployment. They have also stated that, in order to strengthen the social protection of the workers in the period of transition to a market economy, laws have been adopted on minimum consumer budget levels and minimum wages, bearing in mind rates of inflation which result from the liberalisation of the prices of goods and services, among other things. (Endnote 187) Finally, one government (Endnote 188) considered that minimum wages should be regarded as an important part of social security in that they should help to compensate for the negative effects of the current economic reforms.

338. The governments of a number of countries expressed their concern at the repercussions that minimum wages could have on the labour market, in that they could be a factor causing unemployment, (Endnote 189) cause difficulties for certain enterprises (Endnote 190) or affect competitiveness on the international market. (Endnote 191) For this reason, one government indicated that rises in minimum wages have to be treated with a certain vigilance. At the same time, self-employment should be encouraged, activities developed which increase the mobility of manpower and involve employers' and workers' organisations. (Endnote 192) Other governments (Endnote 193) have stated that the implementation of structural adjustment programmes has not prevented minimum wages from rising.

339. The Committee observes that, according to information supplied by governments, practically all those which referred to this topic, whether directly or indirectly, stated that employers' and workers' organisations were consulted or were participating in the implementation of structural adjustment programmes and projects.

340. In referring to the observations formulated by workers' organisations from certain countries as regards this topic, the Committee has pointed that although the measures adopted by governments may tend to stabilise labour costs through a certain freezing of minimum wages, with a view to improving the national economy and raising employment levels and fighting unemployment, governments should nevertheless comply with and apply the provisions of Article 3 of Convention No. 131 when fixing minimum wage levels. (Endnote 194) Secondly, the Committee has emphasised the need to take into account the elements laid down in legislation in force, which give effect to the provisions of Article 3 of Convention No. 131, with a view to avoiding discrepancies between minimum wage levels and the criteria stipulated for fixing them, in particular when minimum wage levels do not keep pace with changes in the consumer price index. (Endnote 195)

341. Aside from the question of the impact of wage and minimum wage policies on the job market and on labour costs, and taking into account the principle which, as noted above, guides the Committee's activities, it would seem important to emphasise the need always to bear in mind the elements provided for in Article 3 of Convention No. 131 when fixing minimum wage levels, in order to guarantee that these levels will comply with the objectives which the various instruments have set for minimum wages. Likewise, it is important to recall that minimum wages play an increasingly important role in the social protection network, (Endnote 196) which means that minimum wages should maintain their purchasing power in relation to a basic basket of essential consumer goods. (Endnote 197)

Endnotes

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Cross references
Constitution: Article 19
Constitution: Article 22
Constitution: Article 35
Conventions: C160 Labour Statistics Convention, 1985