Global Pressure and Minimum Wages

Abstract

Examines the pressures for labour flexibility made on national governments by the global financial institutions and the political responses of workers and unions. Documents how orthodox neo-liberal advice from the IMF and from Australia led to the minimum wage in Papua New Guinea being reduced in half and examines the employment and distributional consequences. Contrary to the orthodox wisdom, employment does not seem to have increased and there has been a major shift from labour to capital in the distribution of national income.