Minimum wage laws are measures that the governments set to prohibit employers against exploiting their workers by setting the lowest limit for salaries remuneration that can be paid. Many countries around the world normally have legislation meant to provide such protection for the employees against exploitation by their bosses on matters relating to salaries. Actually most nations previously regarded these rules and regulation as vital requirements.

In the past, many countries only used this legislation to protect women and children, but when the famous Great Depression took place most of these states agreed to extend these laws to cover the general work force. Nevertheless, even after this happened, only select industries were to be affected. An example is cited in the case of France which, as a country, allowed regulations set by the trade unions to be applied. US on its part had the labor laws that touched on every sector, but they regarded specific industrial wage restrictions as being against the constitution.

The move to set up legislation on wages did not commence on fixing a minimum that a worker should be paid. It allowed the stakeholders to institute boards and legislative councils that could help to deal with the conflicts relating to labor matters. Whenever there is possible conflict situation, the councils and boards helps to arbitrate so as to get solutions that can avert looming strikes.

There are benefits to the labor law that seeks to set minimum wages that can be paid to workers. It helps to close the gap that would allow for exploitation by some employers on their workers. Where there are rules and regulations to be adhered to, possible abuses can be prosecuted within the law and compensation to the exploited workers can be made.

The other advantage is increased living standards due to rise in income after the minimum earning is raised. When a country has not put measures to protect its citizens against bosses who demand a lot but pay less, people with lowest income will remain poor. However, once the lowest possible pay is raised people will have improved living standards.

Enforcing minimum wage bill as a country may have a number of drawbacks as well. For instance, most companies will want to outsource workers from less paying countries if the salary threshold set is beyond their budgets. Some companies will also regulate their job groups to make sure that the highest paid is not pocketing much, to the detrimental of employees.

Increasing the threshold on remuneration can also have side effects on the workers living standards. This is because once the threshold is raised; the cost of production will be high and even commodities become expensive for the citizens. It is common that people will want more in all sectors. Taxes too will basically go up and lowest paid workers remain in the poverty bracket.

Setting the minimum wage laws may also bring about high unemployment rate. This is because most companies will not be hiring additional workers whom they cannot pay well. Therefore, people who are seeking new employment opportunities will not find any. Other companies may also decide to retrench some of their workers to reduce the expenditure and raise profit. Reducing the number of workers will help them to maintain the income expenditure ration.

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