In the last decade minimum wage showed a high growth while average labor income suffered a fall. This apparently incoherent result motivated this article on the evolution of labor income in 1995/2006 and the estimation of the elasticities of labor income in relation to minimum wage. It was verified that minimum wage kept its representation as legal minimum reference in the period. There was no fall in the percentage of workers receiving exactly one minimum wage. However it was verified an increase in the percentage of workers from the informal sector below its level. When disaggregating workers according to its occupation position, it was noticed that the elasticities are systematically higher for income levels around the value of the minimum wage. Therefore, the increase of minimum wage had a strong influence for many workers of low income. However, when moving away (up and down) from the value of minimum wage, the elasticities decrease, being usual to become negative when considered the two extremities of the labor income distribution. The findings of this article for the recent period of high growth of minimum wage corroborate results found by other authors in previous periods, strengthening the importance of the role of minimum wage for the improvement of the labor income distribution.
Minimum wage; Wages; Labor revenue; Income distribution; Income elasticities
