ECONOMICS

Economics

Economics

Why are there laws setting minimum wages for workers and maximum rents for housing?

A minimum wage is fixed in height in the form of smallest legally permissible wage rate for workers. They are determined by a statutory provision, by a commit in a generally binding collective agreement or implied by the prohibition of usury wage. A minimum wage can refer to the hourly rate or the monthly wage for full-time employment. In addition to national minimum wage, there are regional variations, relating for example to states or cities (Berlatsky, 2012).

The introduction of statutory minimum wages and collective bargaining was until after the Second World War used sparingly to reduce poverty. Only at the end of the war, the number of countries with minimum wages grew significantly again. The International Labor Organization (ILO), occupied a tripartite basis with representatives of unions, employers and the State decided now several International Labor Conventions on minimum wages.

For those in favor of this law, the minimum wage, as well as guaranteeing the right to a decent hourly wage for all workers, thus decreasing exploitation, provides an incentive for consumption for the poorest segments of the population, thus improving the economy. Proponents believe that the dignity of the worker and the person cannot be put in second place to the needs of the State budget and emergence of the underground economy (or the unpaid taxes, in this case those of the work), and that in any case the minimum wage if attached to a suitable level close to the minimum of the current market prices, does not generate certainly a burden on free enterprise (Berlatsky, 2012).

Why are there no laws setting maximum wages for workers or minimum rents for housing?

In the United States, the law on fair labor standards (Fair Labor Standards Act, FLSA) is a United States federal law. There is no law for setting a mximum wage rate because it regulates overtime and prohibits the employment of minors and children in hard labor. Where as the minimum wage applies to employees working in an enterprise engaged in commerce or production of goods for commerce. Workers without exception are entitled to a federal minimum wage of $ 7.25 an hour since 2009. The overtime is possible beyond the threshold of 40 hours per week; they are paid at 150%.

In subsidized housing intended for lease, the price to pay for the rent is limited to a maximum price of rent. This initial maximum income cannot be overcome although housing is furnished. Owners shall only charge amounts exceeding this maximum income if they relate to the actual cost of the services they enjoy the tenant (such as water, gas, electricity), and if they are paid by the landlord. In any case, the initial income may be updated annually in accordance with changes in the Consumer Price Index (CPI) published by the National Statistics Institute. This Initial Maximum Annual Income is calculated as a percentage of the Maximum Sale Price established by the Community of Madrid, by Order of ...