Minimum wage

Minimum wage regulation attempts to set an hourly, or other periodic monetary standard for pay at work. A recent example was the U.K. National Minimum Wage Act 1998

National Minimum Wage Act 1998

The National Minimum Wage Act 1998 creates a minimum wage across the United Kingdom, currently £6.08 per hour for workers aged 21 years and older, £4.98 per hour for workers aged 18–20...

. Germany is currently debating whether to introduce its own.

Collective bargaining

Collective agreements between trade unions and employers can regulate wages of workers according to the needs of the business.

Arbitration

Arbitration involves makes collective agreements between trade unions and employers legally binding and mediated through a state appointed judge or magistrate.

Economic labour theory

An economic analysis of the law holds very simply that any intervention in a contract between two parties creates an inefficient labour market. Wages kept artificially high, by imposing any administrative or monetary costs on employers distorts the labour market equilibrium. For a national economy in a globalised world, that means jobs will go overseas and the unemployment rate rises. Major proponents of this sort of labour economics include Nobel Prize winner from the University of Chicago, Professor Gary Becker

Gary Becker

Gary Stanley Becker is an American economist. He is a professor of economics, sociology at the University of Chicago and a professor at the Booth School of Business. He was awarded the Nobel Memorial Prize in Economic Sciences in 1992, and received the United States' Presidential Medal of Freedom...

. Professor Becker keeps a blog with well known academic and judge, Richard Posner

Richard Posner

Richard Allen Posner is an American jurist, legal theorist, and economist who is currently a judge on the United States Court of Appeals for the Seventh Circuit in Chicago and a Senior Lecturer at the University of Chicago Law School...

. Posner is a lawyer and economist, and wrote a book called Economic Analysis of Law. His starting assumption is that unions are the cartelisation of the labour market. Both would agree, that if its aim is to improve the living standards of society, wage regulation defeats itself. Posner says, “Economics is not a theory about consciousness. Behaviour is rational when it conforms to the model of rational choice, whatever the state of mind of the chooser.” So any conscious attempt to improve working standards are impossible under this view.