Global History of Minimum Wage

(graph from US Department of Labor)
When looking at the history of global wages, it is critical to assess the economic history of the nations around the globe. By looking at the economic history of some key regions or countries throughout the world, it is possible to see why wage conditions in the Current Situation article developed. Each continent can be grouped based on certain economic ideals and conditions. South America has been steeped in economic upheaval but many of the countries are beginning to modernize. In Africa, constant violence, government corruption, and lack of cohesive infrastructure has severely impaired economic growth there. Western Europe along with the rest of the European Union have grown into largely socialist countries with a high degree of commercial success. Lastly, Asia has been modernizing at a rapid pace due to the effects of the global market and globalization. Industrialization has become the primary interest of countries such as India, Indonesia and especially China. The economic development and climate of various world countries are the primary determining factor for their wages. Another factor could be social- prejudice for example. This view is detailed in comparison to productivity differences by Gernot Kohler in his Critique of the Global Wage System.

In China, and similarly in other Asian countries around it, Communism and its ideals of productivity influenced its wage development. Governments were strong enough to control their nations and institute reforms such as the Five Year Plan to start their countries on paths of rapid industrialization for the good of the state. Wages would remain low, but productivity would draw immense foreign investment. To support this productivity, wages would be set as low as possible, with globalization holding minimum wage growth back, as seen with IT technicians. This growth characterizes the economic development of many Asian countries based off industrial goals started by communist reform plans.

In Europe, mercantilist expansion starting during the Renaissance prove to be the backbone of the continental economy. Mercantilism allowed the Western European nations to flourish on a global scale, but their political philosophies began to shift toward a socialist angle. The prosperity of the various countries was spread amongst the populace through socialist reform. Taxes are extremely high, but this allows for much higher minimum wage that the United States and various other benefits such as medical treatment.

Lastly, the continents of Africa and South America have largely failed in many respects to establish a strong economic system and therefore the ability to set stable minimum wages. Internal strife and government corruption have left many of the countries without viable industrial growth or infrastructure. This originally arose with the advent of colonialism and the subsequent crippling of African and South American nations. Until Africa and South America can be stabilized, workers can be easily exploited and economic growth will be limited. A detailed essay of Africa's crippled economic history can be found here.