Wage optimisation in SMES as an instrument for optimal economic policy and for goood corporate governance - case study of minimum wages in Denmark

Gasmi, Gordana and Dedeić, Predrag and Weber, Rolf (2016) Wage optimisation in SMES as an instrument for optimal economic policy and for goood corporate governance - case study of minimum wages in Denmark. The Review of International Affairs, LXVII. pp. 19-39. ISSN 0486-6096

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Abstract

The study is dealing with the issue of a wage optimization in SMEs as an instrument for optimal economic policy and for good corporate governance. The main idea of wage optimization in different economic conditions is, inter alia, the introducing of a law- based minimum wage in order to have the optimal economic policy, social justice and good corporate governance. The minimum-wage legislation now exists in more than ninety (90%) percent of all countries, although the laws vary greatly. In the European Union (EU), most Member States have national minimum wages. The social importance of minimum-wage derives from the need to ensure social safety for employed people and their dependents. Many companies have recently shifted to a fluctuating wage rate based upon productivity, but in no event shall the amount paid be lesser than minimum wage. The impacts of a minimum wage are the following: Employment impact, Economic impact and Productivity impact. Concluding remarks accentuate that it is necessary to set the minimum wage so as to provide a minimum acceptable standard of living for low-paid workers. It is recommendable not to extend sector collective agreements regarding minimum wages to non-participating employers, and to provide an “opt out” option for employers – especially small ones, i.e. small and medium enterprises, for whom it is too costly to comply with sector agreements. Such employers from small and medium enterprises should be bound only by the national minimum wage.

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