The Politics of ‘Minimum Wage’ Welfare States: The Changing Significance of the Minimum Wage in the Liberal Welfare Regime

Abstract

AbstractIt is an indisputable reality that the English‐speaking welfare states have retreated from their distinct postwar welfare state compromises in ways that prompt many to wonder what is still liberal about the liberal welfare states. Considering developments in minimum wage institutions and politics in five liberal welfare states, this article argues that the apparent renewed politicization of the minimum wage – driven by legislative action and activist campaigns from below – is an inevitable consequence of the twin policies of labour market deregulation and workfare‐centred social policies. A larger electorate of low‐paid workers, including those in full‐time work, combined with rising concerns from the public about the extent and injustice of poverty wages are important factors drawing renewed attention to the politics and policy of minimum wages. However, I also show that policymakers have additional incentives to embrace higher minimum wages: the economic orthodoxy in favour of low minimum wages has steadily lost credibility, and legislating for wage increases enables a predistributive strategy with the potential to shift the burden of addressing inequalities from fiscally‐strained governments to employers. Drawing on policy and political developments from across Australia, Canada, New Zealand, the UK and the USA, I make the claim that the politicization of minimum wages offers genuine insight into the future battles over what is ‘liberal’ about the liberal welfare states.