Role of minimum wages in rebalancing the economy

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Abstract

Minimum wages can be a powerful tool for supporting decent work goals and can be a crucial component to the strengthening of social protection floors and poverty alleviation efforts. This paper argues that effectiveness of minimum wages depends on three aspects: first, on the legal coverage of minimum wage systems; second, the level at which minimum wages are set; and third, the ability to ensure compliance with legal minimum wage provisions, so as to ensure the goal of improving incomes and reducing inequality.

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