Minimum wage is the least amount of monetary reward that an employer is obliged to pay to its workers irrespective of their productivity levels. But, can minimum wage be justified? Why should an employer pay wages which are higher than the productivity levels of workers? However, is it again fair to suppress workers to a low market wage which does not even let them cross the poverty line? Furthermore, should the minimum wage be adjusted so that the real wage does not get eroded over time? These are the questions for a debate.

Workers have been under the continuous pressure from rising inflation and falling real wages. However, minimum wage might act in an unintended way hurting the poor themselves.

There are both sides to the coin. Minimum wage can help check the monopoly power, the power through which the employers can solely determine the wage rates. However, minimum wage unnecessarily raises the price of a product as there will be inefficiency in production. Moreover, the effect of minimum wage on employment of low-skilled workers is even more catastrophic. So, it may be a good idea to train workers so that they can become more skilled and subsequently be able to bargain for higher wages rather than think about establishing minimum wage in Nepal.

What do you people think on this? Do you really think we should have it ? What about the consequences on employment and business?

summarized from: http://dreamnepal.wordpress.com