Imposing certain minimum wages is a globally-recognized way to reduce inequality. Low-paid workers risk to roll down in the relative poverty and decrease the overall well-being of the country. Anxious about their poverty levels, many countries take a course on increasing the minimum wage. Today this figure looks different all over the world.
According to the Organization for Economic Cooperation and Development, Australia and Luxembourg offer the most generous minimum wages that exceeded $9 per hour there. Belgium, France, Ireland, and Netherlands come straight after them offering their lowest-paid employees the minimum that slightly exceeds $8. Employers in New Zealand, Canada, Germany, and United Kingdom offer their workers $7 at the very least. The US with the federal minimum wage of $6.26 (after taxes in 2015) comes next. However, this figure differs from state to state, with some states planning to gradually increase the minimum wage up to $15. The increase takes the course on reducing the relative poverty, though many economists are rather critical of this approach.
While some organizations state that higher minimum wages stimulate inclusive growth, the increase often comes from the optimization of jobs. Fewer jobs mean higher wages for those who stay in business. Thus, the impact of minimum wages on poverty levels are questionable, especially if not all employers can pay as much as the minimum wage prescribes. Some economists address the Earned Income Tax Credit as a better decision for poverty as compared to minimum wages.