by Sanja Crnkovic-Pozaic
Abstract
In the countries of Central and Eastern Europe, the minimum wage was a key variable in the wage floor for the wage tariff and a barrier to severe poverty, even though average wages were close to the minimum wage. And both were low, in part because of the high ratio of non-wage to wage remuneration, and in part simply because wages and productivity were remarkably low.
The problem was that the way the minimum wage was set or used under the former system was inappropriate for a market-oriented economy, and subsequent events demonstrated that it was not adapted to meet the extraordinary crises into which the emerging labour markets of the region were plunged. Tragically, for millions of workers and their families, the minimum wage became a means by which their impoverishment was intensified. Daniel Vaughan-Whiteheads` paper presents a comparative analysis of minimum wage trends in the countries of Central and Eastern Europe, showing that it no longer constitutes an anchor for social protection and that, deliberately or otherwise, it has become an instrument for controlling wage growth. Emerging from the analysis are clear policy prescriptions that deserve to be given high priority by all those concerned with the plighty of the "working poor" and with those dependent on income support at the lower end of the labour market, whether in employment or not. For those outside the region, it might also be instructive to realise that the minimum wage has played a more pervasive role in the countries of Central and Eastern Europe than in Western Europe.
Table of Contents
Preface
1. Introduction
2. Downward pressure on minimum wage
3. Social implications
4. Problems of efficiency and productivity
5. Minimum wage and employment
6. Labour force fragmentation
7. Disconnection from the wage scale
8. Disruption of the income structure
9. Adverse effects on consumption and savings
10. Reforming the minimum wage policy
11. Conclusion
Appendix
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