International employment police and practice.

Introduction.

            The introduction of minimum wage has proved popular in very many countries.  In fact, over 90% of the countries in the world have a form of minimum wage.  This shows that such countries have realised the benefits that can be attributed to the introduction of minimum wage.  This paper aims at analysing the workplace environment in relation to minimum wage in UK and US.

Minimum wage.

            This refers to the lowest monthly, daily or hourly wages that employers are entitled to pay workers or employees, by the law.  It can also be described as the lowest wage rate that a workers or employee can sell labour.  This law was first passed in New Zealand and Australia during the late 1890s and has now been assimilated by 90% of countries in the world.  The aim of this law is to protect the workers against exploitation by the employers as well as help improve their welfare.

            In UK, the minimum wage was introduced in 1999 after comprehensive research on the issue by the Low Pay Commission (LPC).  The legislation that enforced minimum wage was introduced after the UK government realised that most lowly paid workers did not enjoy stable protection in relation to payments.  The only protection that such workers enjoyed was through collective bargaining, which was considered patchy and weak.  The proportion of workers who enjoyed protection from collective bargaining had also decreased from 75% to 40% from 1980 to 1998.  In 1993, the Wages Council was abolished and this left workers who worked in sectors which were low paying with no protection regarding minimum wages.  This is a situation that made the UK government consider introducing a minimum wage law so that it would ensure that the labour force was well motivated and achieved higher performance.  In the US, this regulation was introduced in 1938 and the first minimum wage rate was $0.25.  In 2006, President Bush said he would support the increase in minimum wage only if it was accompanied by tax breaks.  Most people were however opposed to the tax breaks, since they viewed this as being a form of punishment for the poor.   In 2007, the tax breaks were increased to $7.25 per hour.

Collective bargaining.

            According to Fields (2007: 45-49), this is an approach where workers hold discussions with the management in a bid to convince the management to improve their working environment.  The employees organise themselves, meet, hold conversations with the management, and finally agree with it on issues that concern their working environment.  In most countries, this agreement is binding and is enforceable through legal means.  Usually, representatives of workers’ unions negotiate with employers in order to come up with a collective agreement.  The issues usually addressed by these agreements include grievance procedures, working conditions, working hours and terms of employment among others.

United Kingdom.

            Collective bargaining was coined by the Beatrice Webb during the end of the nineteenth century.  The term was aimed at illustrating a situation that is opposite to individual bargaining between individual employees and the employer.  Allan Flanders portrayed collective bargaining as joint industry regulation achieved by rule-making.  Most people are of the opinion that there has to be negotiation in collective bargaining, so that there can be a distinction between it and consultation process.  The consultation process arrives at conclusions based on decisions made solely by the employer.   Collective bargaining has been dominant in the United Kingdom for several years in regulating the terms and conditions of the workers.  It has however decreased over the years due to the increased participation of the Review-Body in regulation of issues concerning workers.

            The Review Body is a government mechanism in United Kingdom and is intended for replacing the role of collective bargaining in specific categories of workers.  These include nurses and doctors in National Health Service.  This body gives recommendations which are independent, and based on evidence provided by the stakeholders who include the unions, employers and the government.  The body acts in good faith that unions will not strike, and that the government will implement recommendations provided.  The system of Review Body began in 1971 and caters for 26%s of overall dentists and doctors in the UK.  The Review Body also covers the prison service, armed forces, senior personnel and school teachers.  In the United kingdom, collective bargaining does not have statutory enforcement in fields of training and learning.  This has captured attention of nursing and trade union members who aim to expand collective bargaining such that it covers training and learning.

United States.

            In US, most of private sector collective acts are covered by National Labor relations Act.  The act prohibits employers from spying on, discriminating, retaliating or terminating employment of workers due to their affiliations with trade unions.  In places of work where employees have voted for representation by unions, union representatives and a committee of workers embark on negotiation with management, regarding a contract that is mutually agreeable by both parties.  Such contracts include details about hours, wages, terms and conditions, benefits among other details.  Upon agreement by the management and the committee of workers, the contract is then put up for vote by all employees.  If employees vote for it, it will be in operation for a fixed duration, according to the clauses in it.  After the period of operation lapses, the contract is renegotiated between management and the employees.  In case there is a dispute over the contract, the case is taken for arbitration.  According to Griffiths and Wall (2007: 55-67), most of these cases however involve situations where the employees feel that they were fired without just cause.  In such a case, a neutral arbitrator hears both sides of the argument and decides if the employee was fired without just cause.  If such a situation is found to have occurred, he or she orders for the correction of the situation.

            During these disciplinary hearings, most states in the US require that the workers incur costs for representation.  This happens in cases where the workers do not negotiate security clauses in the union, and the amount that they are expected to raise lies between 1% and 2%.  This is a negligible amount after considering that employees in unions raise 30% more on average, as compared to their counterparts who are not on unions.   Most south-eastern and south-central US states however prohibit these clauses.  This is because the clauses allow people who benefit from the contracts to avoid meeting their fair share of the contract negotiation costs.

Employers’ and union’s views on minimum wage rates.

            It is surprising that there is a consensus among the US and UK employers and unions regarding the issue of minimum wage rate.  In both countries, employers and unions support the minimum wage rates and there has been very few cases where there is opposition to this concept.  In the US, there has been tremendous support of this concept, which is in fact turning to a competition between states on offering the highest rates of minimum wage.  Washington DC tops the list with an hourly minimum wage rate of $8.55.  The support comes from the several benefits that minimum wage rate contributes to the country at large.       According to Marx (2007: 26-33), these benefits include encouraging and motivating workers to work hard, has no impact on government spending or private sector, since funds do not come from either source, it is simple to implement and increases the growths of payrolls for businesses.  This strategy is also popular, since unlike what many people previously thought, it has very a low effect on unemployment.  President-elect Barack Obama has pledged to increase the minimum wage rate and it is expected to be $9.50 by per hour by the end of the next four years.  He believes that in order for workers to effectively support their families and be able to afford basic need, increase in minimum wage rate is essential.

            In the UK and US, unions support the minimum wage rates since there is no evidence so far to suggest that the introduction of the minimum wage has had an effect on union membership.  Although the minimum wage real value has increased in UK since the introduction of union membership, the private sector union density has declined by about 14%.  There is however no evidence that links the decline in union membership to the introduction of the low minimum wage.  This is because the decline had began before the introduction of minimum wage, and is seen as continuing with this trend.  The public sector union membership is relatively stable during these years, further reinforcing the fact that the introduction of minimum wage has not adversely affected union membership.  The decline in union membership for the private sector can be attributed to challenges facing this sector, that are not related to introduction of minimum wage.

Minimum wage legislation.

United States.

            In the US, minimum wage at the federal state level is mostly regulated by the Fair Labor Standards Act (FLSA).  This act regulates most of the public and private employment and controls the overttime pay and minimum wage.  Since July this year, covered non-exempt employees receive a federal minimum wage of $6.55 per hour.  They are also entitled to receive overtime pay equivalent to 150% of the normal pay.  The act also restricts the working hours for children who are not over 16, and further prohibits the employing children not over 18, for employment opportunities that are viewed as very risky.  According to Andersen (2007: 76-88), majority of the individual states have laws that regulate the minimum wage.  In situations where both federal and state laws that govern minimum wage are applicable to a workers, he or she is entitled to the higher minimum wage among the two.  However, it is important to note that this law does not regulate promised or usual commissions or wages that exceed those regulated by FLSA.  These are usually regulated at the state level, by states which have such laws.

United kingdom.

            In the UK, the minimum wage act regulates the minimum wage rate that is applicable to each worker.  This law is applicable to workers who are above school leaving age, homeworkers and agency workers, overseas workers, House of Lords and House of Common staff, crown employees, agricultural workers, mariners among others.  The law does however not apply to self employed directors and office holders, share policemen, armed forces, voluntary workers, share fishermen, prisoners among others.

            According to Alan (2003: 65-69), the major details about the pay are usually made by the secretary of state and these details include tips, benefits, bonuses and others.  The secretary of state also has the power to set or exclude different rates for young persons, include new categories such as people on trainee basis, extend the bill to cover people who are not presently referred to as employees and order all workers to receive statements of pay in writing so that they can know if they are being exploited.  The secretary of state also has the powers to review these rates at any time and appoint officers for enforcing this law.

            In case there is any grievance by the workers, they are free to present their problem to civil courts or industrial tribunals.  According to Andersen (2007: 34-39), after the workers present their grievances to the civil courts or industrial tribunals, the burden of proof is carried by the employer.  The employer has to prove that he or she paid the worker minimum wage, or that the person should not receive the wage as he or she is not a worker.  It is a criminal offence to wilfully neglect or refuse to pay minimum wages.

Conclusion.

            It has been seen that many countries have embraced the issue of minimum wage all over the world.  Surprisingly, employers and unions are having a common consensus, a situation that is not experienced during most of the time.  It is important that enforcement of this law is not done in a manner that is discriminatory so that every unemployed person can be encouraged to join the workforce.  This will not only be beneficial to the workers but it will be to the whole country in general.  This is because every successful country needs a strong labour force.

Bibliography.

Alan, M. 2003. Monopsony in motion: Imperfect labor markets. New Jersey: Princeton   University press.

Andersen, E. G. 2007. Minimum Wage Policy in Great Britain and the United States.      Washington: Algora Publishing.

Andersen, E. G. 2007. Welfare States in Transition: National Adaptations in Global. New          York: SAGE.

Fields, G. 2007. The unemployment effects of minimum wage.  International Journal of             Manpower.

Griffiths, A.,  Wall, S. 2007. Applied Economics. New York: Financial Times Prentice Hall.

Marx, I. 2007. A New Social Question?: On Minimum Income Protection in the Postindustrial    Era. Denmark: Amsterdam University Press.

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