Fixing Minimum Wages: Issues and Challenges

Minimum wages are considered essential for ensuring that workers receive a “fair” wage for their work, and are one of the preconditions of ensuring decent work and workers’ well-being. This chapter examines the criteria of setting minimum wage in light of the ILO Conventions and its distributive justice function, since one of its objectives is to overcome poverty and to ensure the satisfaction of the needs of all workers and their families. Although there is diversity in approaches to setting minimum wage, it is essential that minimum wage is set at a level that is adequate to maintain a reasonable standard of living for workers. The effectiveness of minimum wages depends on many factors such as broad coverage, adequate level, compliance, and monitoring of such compliance. The Bangladesh Labor Act 2006 establishes the sector-wise minimum wage. However, a large number of sectors are still out of the purview of the minimum wage structure in Bangladesh, and very often, minimum wages are not enough to fulfill the basic needs of the workers. Even the existing minimum wages are not properly implemented due to weak enforcement, lack of monitoring, and lack of accountability of employers and they are not regularly adjusted to reflect the rising cost of living. This chapter argues that minimum wages require periodical adjustment with an increase in the general level of prices and the cost of living.