Minimum wage

The issue of the determination of a minimum wage is always complicated because it involves more parameters than one would at first think of.

In a country like the U.S., where the State guarantees the security of the private sector's properties and amenities, it is way easier to set a minimum wage and enforce it. But in emerging economies with weak states, it's not that easy. Let's take for example what just happened in Haiti and some African countries less than two weeks ago. Because of a humanitarian crisis and its resulting hunger, thousands of people get involved in bloody riots and while they were at it, destroyed hundreds of houses and businesses. This is something which happens quite frequently.

In such an environment, the private sector will always try to pay it employees the lowest possible wage, while trying to penalize its clients the more possible, because it needs to put soe money aside so it can get back to business after one of those violent riots. If the private sector doesn't do that, it will go out of business, and the first ones who will be hurt are those employees always claiming higher wages.