Abstract

A minimum wage is the lowest wage that employers may legally pay to workers. The purpose of minimum wages is to protect workers against unduly low pay and they are essentially labour market interventions used by governments either as instruments of political macroeconomics or as social tools. Governments introducing minimum wage policy and legislations basically aim to protect low-income workers through the introduction of minimum wages based on country specific factors. In case of Ethiopia the new labour proclamation which is entered into force in 5th September, 2019 for the first time provide establishment of minimum wage board that will periodically revise minimum wages based on different factors. Since the new minimum wage board in Ethiopia is a new conception it is not perfect in addressing all issues and problems that exist in the implementation of the purpose intended by the government. So this article has employed different sources and explores the minimum wage system in Ethiopia special focusing on new labour proclamations by consulting other countries better experience in tackling those unseen problem and for having strong minimum wage system in the country.