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Public Enforcement/Private Monitoring: Evaluating a New Approach to Regulating the Minimum Wage

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  • David Weil

Abstract

This paper examines compliance with federal minimum wage laws in the U.S. apparel industry and analyzes the impact of new methods of intervention designed to improve regulatory performance. Drawing on data from a randomized survey of apparel contractors, the author evaluates the impact of agreements between manufacturers and the government used to monitor contractor behavior as a means of improving compliance outcomes. Several non-regulatory variables predicted by theory to be important influences—the level of work skills, for example, and product market factors related to the elasticity of labor demand—are indeed found to be correlated with compliance. Nonetheless, stringent forms of contractor monitoring are associated with substantial reductions in violations of minimum wage standards. The results suggest that well-designed public/private monitoring efforts can lead to significant improvements in compliance with labor standards.

Suggested Citation

  • David Weil, 2005. "Public Enforcement/Private Monitoring: Evaluating a New Approach to Regulating the Minimum Wage," ILR Review, Cornell University, ILR School, vol. 58(2), pages 238-257, January.
    • Handle: RePEc:sae:ilrrev:v:58:y:2005:i:2:p:238-257
    DOI: 10.1177/001979390505800204
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    References listed on IDEAS

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    1. Chang, Yang-Ming & Ehrlich, Isaac, 1985. "On the Economics of Compliance with the Minimum Wage Law," Journal of Political Economy, University of Chicago Press, vol. 93(1), pages 84-91, February.
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    Citations

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    Cited by:

    1. Linxiang Ye & TH Gindling & Shi Li, 2015. "Compliance with legal minimum wages and overtime pay regulations in China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-35, December.
    2. Soundararajan, Vidhya, 2019. "Heterogeneous effects of imperfectly enforced minimum wages in low-wage labor markets," Journal of Development Economics, Elsevier, vol. 140(C), pages 355-374.
    3. Thomas A. Kochan, 2012. "Collective bargaining: crisis and its consequences for American society," Industrial Relations Journal, Wiley Blackwell, vol. 43(4), pages 302-316, July.
    4. Roberto PIRES, 2008. "Promoting sustainable compliance: Styles of labour inspection and compliance outcomes in Brazil," International Labour Review, International Labour Organization, vol. 147(2-3), pages 199-229, June.
    5. Ronconi, Lucas & Zarazaga S.J., Rodrigo, 2015. "Labor Exclusion and the Erosion of Citizenship Responsibilities," World Development, Elsevier, vol. 74(C), pages 453-461.
    6. Marco Caliendo & Carsten Schröder & Linda Wittbrodt, 2019. "The Causal Effects of the Minimum Wage Introduction in Germany – An Overview," German Economic Review, Verein für Socialpolitik, vol. 20(3), pages 257-292, August.
    7. Richard M. Locke & Ben A. Rissing & Timea Pal, 2013. "Across Boundaries: The Global Challenges Facing Workers and Employment Research 50th Anniversary Special Issue," British Journal of Industrial Relations, London School of Economics, vol. 51(3), pages 519-552, September.
    8. Feuerstein, Patrick & Herrigel, Gary, 2017. "The limits of global labor governance and an emerging perspective," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 18(2), pages 6-15.
    9. Ronconi, Lucas & Zarazaga S.J., Rodrigo, 2015. "Labor Exclusion and the Erosion of Citizenship Responsibilities," World Development, Elsevier, vol. 74(C), pages 453-461.
    10. Richard M. Locke & Fei Qin & Alberto Brause, 2007. "Does Monitoring Improve Labor Standards? Lessons from Nike," ILR Review, Cornell University, ILR School, vol. 61(1), pages 3-31, October.
    11. repec:ilo:ilowps:487848 is not listed on IDEAS
    12. Dinkelman, Taryn & Ranchhod, Vimal, 2012. "Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa," Journal of Development Economics, Elsevier, vol. 99(1), pages 27-45.
    13. David WEIL, 2008. "A strategic approach to labour inspection," International Labour Review, International Labour Organization, vol. 147(4), pages 349-375, December.
    14. Annette BERNHARDT & Siobhán McGRATH & James DeFILIPPIS, 2008. "The state of worker protections in the United States: Unregulated work in New York City," International Labour Review, International Labour Organization, vol. 147(2-3), pages 135-162, June.
    15. Berliner, Daniel & Greenleaf, Anne & Lake, Milli & Noveck, Jennifer, 2015. "Building Capacity, Building Rights? State Capacity and Labor Rights in Developing Countries," World Development, Elsevier, vol. 72(C), pages 127-139.
    16. Clemens, Jeffrey & Strain, Michael R., 2022. "Understanding “Wage Theft”: Evasion and avoidance responses to minimum wage increases," Labour Economics, Elsevier, vol. 79(C).

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