Model of setting the minimum wage preferred by employers and employees and its role

Abstract

This study examines the setting of minimum wages (MW) in Poland based on enterprise size. In this context a new theory of MW diversification is proposed, which explains the balance of benefits for employers, employees, the labour market, and the economy, which ultimately leads to maximizing the total added value resulting from differentiated MW rates. Based on research conducted between 2016 and 2023, the study presents the positive impact of MW on productivity, purchasing power, average wages, and GDP. This study also presents the results of surveys conducted among employees and employers in Poland to show their opinions on the needs and benefits of introducing differentiated MW rates. These studies confirmed that both employers and employees recognize this need and point to significant benefits for themselves, the labour market, and the economy as a whole.