The Effectiveness of Minimum Wage Policy As a Policy Tool in Poverty Reduction

Abstract

The debate on the effectiveness of minimum wage policy between academics, economists, and legislators is going on in the world for several years, whereas in Pakistan very little work has been done on this issue. This study explores the effectiveness of minimum wage policy as a tool of poverty reduction. This study attempts to examine rich household survey data of industrial sector workers of Hyderabad through self-administered SEQOL questionnaire plus data collected from legal documentations, articles and research on the topic in Pakistan. It is descriptive analytical research analyzed data through descriptive statistics, tabulation, charts, figures, and used qualitative techniques for reporting reviews. The evidence shows that majority of the people are getting less than set minimum wage. Minimum wage is a useful policy in poverty reduction but not the only one tool to curtail poverty. It should be the top priority of minimum wage policy to protect living standard of the workers concerned with it.