A new academic paper has looked at the role of minimum wages, tax and benefit policies in protecting workers against financial poverty in 21 European countries with a national minimum wage, together with three states in the USA.
Thus there seem to be limits to what minimum wage policies alone can achieve in the fight against in-work poverty. Such policies seem to be ‘inherently constrained’ – especially in countries where the distance between minimum and average wage levels is already comparatively small, and where relative poverty thresholds are mostly a function of dual-earner living standards.
The authors conclude that, in order to fight in-work poverty, new policy routes need to be explored. But they warn that ‘one size fits all’ policy solutions are unlikely to succeed.
Source: Ive Marx, Sarah Marchal and Brian Nolan, Mind the Gap: Net Incomes of Minimum Wage Workers in the EU and the US, Discussion Paper 6510, Institute for the Study of Labor, Bonn
Link: Report