Minimum wage as a tool for regulating the labor market: current challenges and prospects

Abstract

The aim of this research is to examine the role of the minimum wage as a tool for regulating the labor market, analyze the current challenges associated with its establishment amid economic instability, and explore the prospects for its effective use in ensuring social justice and promoting economic growth.

The relevance of studying the minimum wage as a labor market regulatory tool lies in its central role in shaping the state’s socio-economic policy. In today’s environment of economic instability, inflationary pressure, and rising income inequality, the minimum wage serves as a mechanism for safeguarding workers, reducing poverty among the employed, and stimulating economic activity. This research is particularly significant in light of contemporary challenges such as: rising living costs, the growth of informal employment, increased global labor market competition, and the need to adapt to Ukraine’s post-war reconstruction. The importance of the issue also stems from the necessity to strike a balance between raising the minimum wage, maintaining business competitiveness, and preserving employment levels. Consequently, this study aims to provide practical recommendations for enhancing the mechanisms regulating the minimum wage, ultimately contributing to improved living standards, reduced inequality, and greater labor market efficiency.