minimum wage in nepal

Minimum wage is the least amount of monetary reward that an employer is obliged to pay to its workers irrespective of their productivity levels. But, can minimum wage be justified? Why should an employer pay wages which are higher than the productivity levels of workers? However, is it again fair to suppress workers to a low market wage which does not even let them cross the poverty line? Furthermore, should the minimum wage be adjusted so that the real wage does not get eroded over time? These are the questions for a debate.

The issue of minimum wage has seen a lot of debates around the globe. While the salaries in government jobs have been fixed with little to no annual adjustments, the private payments have been largely based on personal judgments in Nepal. Some of the countries around the globe like United States have minimum wage laws that prohibit the employers from paying its workers below the prescribed minimum wage. There seems to be a long way to go before any such laws could be established in Nepal. However, is it worth the effort to bring minimum wage legislation into effect in Nepal?

There are both sides to the coin. Minimum wage can help check the monopoly power, the power through which the employers can solely determine the wage rates. However, minimum wage unnecessarily raises the price of a product as there will be inefficiency in production. Moreover, the effect of minimum wage on employment of low-skilled workers is even more catastrophic. So, it may be a good idea to train workers so that they can become more skilled and subsequently be able to bargain for higher wages rather than think about establishing minimum wage in Nepal.

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