What do you think is the most effective ? a wage bill federated or centralized?

Sandrine,

I think this depends on the type of wage bill being introduced.  When it comes down to basic foundational issues (equality practices, minimum pay, maximum hours for bas pay etc.) I believe that any type of wage bill should probably be contralized.

If the issues are more specialized then a federated approach is probably better.  Since wages can very dramatically based on local economies, industries and size of companies involved in specific areas, wage practices cannot only be dictated at a centralised level.

Did you have any specific situation in mind?

Sandrine,

In Australia we have a mixture of state and Federal (Central) wage fixing programs which are both expensive and time consuming for business as you need to keep track of up to 8 different regulatory systems.  Our previous Federal government (Liberal) introduced a more flexible wage fixing system but this was exploited by a small number of employers.  People became disenchanted with the system because they believed there was no protection for the lower paid employees and the Liberals lost office to Labor.

Labor are now introducing a more perscriptive wage fixing system again.

I think a better approach involves a federally based system that provides some form of pay floor for the lower paid, but also allows flexibility for employees and businesses to agree on higher pay according to their relevant operating conditions.

The trick is setting the floor at a level that is not too low or too high. There is much debate in Australia when the relevant Government body works through the process of taking submissions and setting the minimum wage as it is known.

This approach has much to do with the culture and history of wage fixing in Australia. Some countries would see this as too "socialistic".   Most times the best design that can be developed and accepted will depend on the culture of the country and its wage setting history.