Is minimum wage a good policy for poor workers in Croatia?
Is minimum wage a good policy for poor workers in Croatia?

Summary/Abstract: Minimum wage is an instrument of the labour market introduced because of the principle of fairness and dignity for workers who are incapable of covering the basic personal and household needs. Today, the minimum wage policy has gone beyond the economic sphere and has become an economic, social and political issue. In this paper, the authors analyze the profile of the minimum wage worker in Croatia and trends in minimum wage coverage, which is brought into connection with the poverty of workers. The characteristics of minimum wage workers and their status on the labour market are the most significant components in the analysis of minimum wage because this is the starting point in the creation of policy according to the needs of its beneficiaries. One of the aims of the minimum wage is convergence towards the total elimination of poverty among the working population and it is, therefore, a priority to obtain information on the share and profile of poor workers. The analysis pointed out the poor efficiency of the minimum wage policy in the context of decreasing poverty, i.e. increasing the income of poor workers. Therefore, the authors present some alternative instruments which can be seen as complementary to the minimum wage policy. The combination of several instruments enables a more efficient and faster achievement of goals that the minimum wage fails to realize, before all a higher income for poor and low-wage workers. The government needs to be careful in designing the minimum wage policy and take into consideration the final aim which is the maintenance of a dignified wage threshold for the vulnerable groups of workers. It would be wise to create a combination of the minimum wage policy, the welfare policy and the fiscal policy with the aim of protecting the vulnerable groups of workers, as well as the unemployed, by stimulating employment, i.e. activity on the labour market.

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