minimum wage

The first national minimum wage law was enacted by the government of New Zealand in 1896, followed by Australia in 1899 and Great Britain in 1909. In the United States, statutory minimum wages were first introduced nationally in 1938^[2], and in the United Kingdom in 1999^[3]. In the European Union, 18 out of 25 member states currently have national minimum wages.^[4]

Supporters say that minimum wages reduce exploitation, help to ensure that everyone can afford to live, and do not have negative effects on employment. Detractors contend that minimum wage causes inflation and unemployment, thus harms rather than helps the poorest workers, and slows economic growth.^[5] Many countries, such as Sweden, Finland, Denmark, Belgium, Switzerland, Germany, Austria, Italy, and Greece have no minimum wage laws, but rely on the employer's organisations and their trade union's ability to set minimum earnings through collective bargaining.^[6]

One interpretation is that the minimum wage law makes it a crime for an employer to pay a worker less than the stated minimum. An alternative, though equally valid interpretation, is that the minimum wage law makes it a crime for a person to sell his labor at less than the stated minimum. For example, white labor unions in South Africa have pushed for minimum wage laws so as to exclude black workers from the labor market. By preventing the black workers from selling their labor for less than the white workers, the black workers are prevented from competing for white-held jobs.^[7]

Today, neither the International Labour Organization (ILO)^[1] nor the OECD^[8] believe that minimum wages can be directly linked to job losses in affected countries.

Legislation in the Western industrialized world

The first moves to legislate wages did not set minimum wages, rather the laws created arbitration boards and councils to resolve labour conflicts before the recourse to strikes.

• In 1896, New Zealand established such arbitration boards with the Industrial Conciliation and Arbitration Act
• In 1899, the state of Victoria, Australia established similar boards
• In 1907, the 'Harvester decision' was handed down in Australia. It established a 'living wage' for a man, his wife and two children to "live in frugal comfort"

The established similar boards

• In 1909, the Trade Boards Act was enacted in the United Kingdom, establishing four such boards
• In 1912, the state of Massachusetts, United States, set minimum wages for women and children
• In the 1960s minimum wage laws were introduced into Latin America as part of the Alliance for Progress; however these minimum wages were, and are, low.

In the United States and other countries, minimum wage laws were a common demand of labor unions.

Australia

• The notion of a 'basic wage' was first established in 1907 with the Harvester Judgement.
• The current minimum wage for full or part time employees of over 21 in Australia is $13.27 AUD (~$10.00 U.S. Dollars) per hour. For those under 21 it is $13.27 minus 10% for every year under 21. The rate is stabilised at 40% for those under 16. [1].
• In 2005, the Federal Government implemented significant changes to the nation's labour system. These changes do not explicitly lower the minimum wage (in nominal terms) but may slow its rate of increase. See also, Australian Industrial Relations Law Reform 2005

New Zealand

• The current minimum wage in New Zealand for adults aged 18 or over is $10.25 per hour. The current minimum rate for workers aged 16-18 or apprentices of any age is $8.20, or 80% of the adult rate

Canada

Main article: Minimum wages in Canada

Under the Constitution of Canada the responsibility for enacting and enforcing labour laws rests with the ten provinces, the three territories also having been granted this power by virtue of federal legislation. This means that each province and territory has its own minimum wage. The lowest general minimum wage in force as of July 2006 is that of New Brunswick ($6.70/hour), the highest is that of Nunavut ($8.50/hour). Some provinces allow lower wages to be paid to liquor servers and other tip earners, and/or to inexperienced employees. British Columbia allows employers to pay as little as $6/hour to an inexperienced worker.

The federal government could theoretically set its own minimum wage rates for workers in federal jurisdiction industries (railways for example). As of 2006 however, the federal minimum wage is defined to be the general adult minimum wage rate of the province or territory where the work is performed. This means, for example, that a railway company could not legally pay a worker in British Columbia less than $7/hour regardless of the worker's experience.

France

• The current (July 2006) minimum wage in France is set at 8.27€ (EUR) per hour (~10.46 US dollars). In 2004, 15% of the working population received the minimum wage.

Ireland

• Ireland's minimum wage was introduced in 2000, and is currently €7.65 an hour, although a complex set of exemptions means that some people may be paid as little as 70% of this (€5.36), and it may further be reduced by up to €7.73 a day if lodgings or food are provided as part of a job. Due to general difficulties in finding employees, virtually no jobs pay the minimum wage, with only 3.1% of employees receiving it in 2004.

United Kingdom

Municipal regulation of wage levels began in some towns in 1524. Later, the Trade Boards Act of 1909 initially created four Trades Boards that set minimum wages which varied between industries for a number of sectors where 'sweating' was generally regarded as a problem and where collective bargaining was not well established. This system was extended considerably after the Second World War; in 1945 Trades Boards became Wage Councils, which set minimum wage standards in many sectors of the economy, including the service sector as well as manufacturing. Wage Councils were finally abolished in 1993, having fallen into decline due, in large part, to Trades Union opposition. A lower limit of pay, or 'pay floor' was regarded as threatening the voluntary system of collective bargaining favoured in the UK. Government had first made a serious attempt to abolish Wage Councils in 1986, having abandoned existing legislation that tried to widen the scope of voluntary agreements to include those firms that had not taken part in negotiations, such as the Fair Wages Resolutions. These required that government contractors pay fair wages and respect the rights of their employees to be members of trades unions.

A national minimum wage was introduced for the first time by Prime Minister Tony Blair's Labour government in April 1999, at the rate of £3.60 (US$5.78 at 1st April 1999 rate) per hour for those workers aged 22 and over. This rate was set after the Low Pay Commission, an independent body the Government appointed in July 1997 to advise it on low pay, recommended the rate. The LPC exists to this day to maintain the national minimum wages, which are uprated following its recommendations each October. The LPC board consists of nine members - three trade unionists, three employers, and three labour market relations experts. The Commission is widely regarded as a successful example of a 'social partnership', and undertakes consultations each year in order to gather all available evidence before making its recommendations.

The current minimum wage in the UK for adults aged 22 or older is £5.35 ($10.01US), compared with $5.15 in the US. For workers between the ages of 18 and 21, or any workers who are in the first six months of their job and receiving accredited training, the minimum wage is £4.45 ($8.33US) per hour. The minimum hourly wage for all workers under the age of 18 (who are no longer of compulsory school age) is £3.30 ($6.18US). There is no minimum wage for those still of compulsory school age.

Some workers undertaking apprenticeships or accredited training can be exempted for a certain amount of time; this varies according to their age and the length of time they have been in employment. Other categories of worker who are exempt include Au Pairs, Share Fishermen, Clergy, those in the Armed Forces, Prisoners and some people working in family businesses.

There are some areas in which minimum wage legislation becomes complex, including the aforementioned exemptions for apprentices and trainees and cases where the accommodation offset applies.

Unlike other areas of employment rights legislation in the UK, the National Minimum Wage has compliance teams to support its enforcement. Workers who think they are being paid less than the minimum wage can either make a complaint directly to HM Revenue and Customs on 0845 6000678 or seek advice from another source such as their local Citizens Advice Bureau or the Scottish Low Pay Unit - this is particularly recommended if other employment rights issues are involved, as the HMRC can only deal with minimum wage enquiries.

See also: National Minimum Wage Act 1998

United States

The first attempt at establishing a minimum wage in the United States came in 1933, when a $.25-per-hour standard was set as part of the National Industrial Recovery Act. However, in 1935's Schechter Poultry Corp. v. United States (295 U.S. 495), the United States Supreme Court declared the act unconstitutional, and the minimum wage was abolished.

The minimum wage was re-established in the United States in 1938 (pursuant to the Fair Labor Standards Act), once again at $.25 per hour ($3.22 in 2005 dollars.) It had its highest purchasing value ever in 1968, when it was $1.60/hour ($9.12 in 2005 dollars.) The current federal minimum wage is now $5.15 an hour.

During his presidency, Bill Clinton gave states the power to set their minimum wages above the federal level. As of April 2006, 18 states had done so; while Michigan has increased its minimum wage rate as of October 1, 2006.^{[9] [10]} Community organizing efforts initiated by ACORN were responsible for the increases in some states such as Florida and Nevada. Some government entities, such as counties and cities, observe minimum wages that are higher than the state as a whole. Another device to increase wages, living wage ordinances apply only to businesses that are under contract to the local government itself. Santa Fe's $9.50-per-hour minimum wage is the highest in the nation, and there are plans to increase this wage to $10.50 in 2008.

Many progressive politicians in the United States advocate linking the minimum wage to the Consumer Price Index, thereby producing small annual increases rather than the larger hikes that tend to be adopted when legislation to do so is passed. Oregon has linked its minimum wage to the consumer price index. Oregon's minimum wage is now $7.50 per hour.

Minimum wage jobs rarely include health insurance coverage (as noted here and here), although that is changing in some parts of the USA where the cost of living is high, such as California, and at some companies. For instance, Trader Joe's supermarkets give part-time employees health coverage (link).

See also: List of U.S. state minimum wages

Other countries

• The current (2006) "monthly income for a full-time employee earning the national minimum wage" for twenty industrialised countries can be found here.

Debate over consequences of minimum wage laws

A minimum wage is usually different from the lowest wage determined by the forces of supply and demand in a free market, and therefore acts as a price floor, but it's not necessarily a living wage.

If the law is successfully enforced, and if they are high enough in real terms (or relative to the average wage), minimum wage laws are alleged to have various benefits and costs.

The costs and benefits arising from minimum wages are subject to considerable disagreement among economists, though the consensus among economics textbooks published in the USA, but not those in other nations, is that minimum wage laws should be avoided if the costs exceed the benefits.

A 2003 survey by Dan Fuller and Doris Geide-Stevenson reports that 46% of academic economists in the US agreed with the statement, "a minimum wage increases unemployment among young and unskilled workers", 28% partly agreed, and 27% disagreed. The authors of this study also reweighted data from a 1990 sample to show that at that time 62% of academic economists agreed with the statement above, while 19.5% partly agreed and 17.5% disagreed.^[11]

In the debate about minimum wage it is rarely mentioned by how much the quantity of labor demanded may fall if the minimum wage is raised. Research papers by the employer funded Employment Policies Institute^[12] and by the conservative National_Center_for_Policy_Analysis^[13] claim that increases of 10% in the minimum wage may reduce demand hours worked at the minimum wage by around 1% or 2% depending on circumstances.

According to a claim by the Mackinac Center for Public Policy^[14], a conservative think-tank, the passage of the first Federal mandated minimum wage in the United States in 1933 led to an estimated 500,000 blacks losing their jobs via replacement by higher skilled and more educated white laborers.

Costs and benefits

Supporters of the minimum wage claim it has these effects:

• Helps some people pay their bills and live better. Regardless of the macro-economic effects, some very poor, very needy people will have their salaries raised with the introduction or heightening of the minimum wage.
• Reduces exploitation (see wage slave).
• Forces employers to pay at least the wage society thinks human labor is worth, rather than low-balling potential first time employees with salary offers below their true worth. Employers know that first time employees don't really know how much they're worth and have little bargaining power because if they try to negotiate for a higher wage, the employer can just find another person who doesn't know how much he's worth and give him the job instead (with a caveat below).
• Stimulates consumption, and thus economic growth, by putting more money in the hands of poor people who spend their entire paychecks (with a caveat below).
• Stimulates economic growth by discouraging labor-intensive industries, thereby encouraging more investment in capital and training (with caveat below).
• Encourages some of those who would normally take low-wage jobs to stay in or return to school and thus accumulate human capital (with a caveat below).
• Increases the work ethic of those who earn very little, as employers demand more return from the higher cost of hiring these employees. This may increase productivity at the macro level and the individual level.
• Discourages illegal immigration. A minimum wage increases the desirability of low-wage jobs, which allows those positions to be filled by legal citizens instead of illegal immigrants, thus discouraging illegal immigration. Note that it is also argued that a minimum wage encourages illegal immigration (see below).

Opponents of the minimum wage claim it has these effects:

• Reduces demand for workers, since like everything else it follows the law of supply and demand. When the price of a good or service goes up, demand goes down. If wages are set by the government at a level that is above the rate that would prevail in a free market, there is a surplus of workers which means unemployment.^[15]
• Reduces profit margins of business owners employing minimum wage workers, causing businesses to cut costs by decreasing the number of minimum wage jobs, thereby increasing unemployment.
• Increases prices for customers of employers of minimum wage workers.
• Reduces the number of hours worked at minimum wage.
• Destroys those jobs that are naturally worth less than the minimum wage, thereby increasing unemployment and underemployment.
• Curbs economic growth by decreasing the supply of affordable labor.
• Discourages economic growth by decreasing research expenditures by decreasing income to investor and forcing them to allocate research monies toward new ways of eliminating human workers to lower costs.
• Increases inflation by making low-skill jobs more expensive to employers, thereby making goods produced more expensive to consumers.
• Decreases total consumption. With an increase in the minimum wage comes an increase in prices of good produced by workers which inevitably decreaes the actual value of the worker's paycheck, thereby reducing the purchasing power of those still working, and further eroding the purchasing power of those who are now unemployed.
• Decreases opportunities for low-skilled workers to gain the training and responsibility they need to move up the wage ladder.
• Increases the cost of government social programs due to assistance programs aiding the laid-off workers.
• Encourages more illegal immigrants from poorer places to enter the country because the pay differential between low-skill jobs in the two countries rises. This problem is particularly pronounced in the US, because the US-Mexico border is the longest developed/developing border in the world and is not well guarded.
• Reduces the quality of jobs near the margin as well as the quantity - with less room to negotiate on salary, employers will necessarily cut other key areas such as job training.
• Is less effective at reducing social exclusion than some other alternatives, for example training programs.
• Is less effective than the Earned Income Tax Credit at targeting the truly needy, and is more damaging to businesses.
• Forces employers to pay more for employees than what they are really worth
• Decreases human capital by discouraging people who would have stayed in school and attained higher education because they can earn enough without the extra cost (in time and money) of schooling.
• Increases outsourcing to other countries because the work is not viable due to the high cost of labor
• Not having a minimum wage in developing countries is beneficial to them, as it allows them to market their competitive advantage: cheap labor. If they had a minimum wage, fewer jobs would be outsourced to them and getting out of poverty would be a much more difficult task.

It should be noted that the aforementioned arguments, both pro and con, are largely empirical in nature. That is, their veracity can be established by examining data. By contrast, theoretical arguments (see below) are established via logic.

Some labor union contracts are based on the minimum wage; this produces a natural constituency to lobby for increases among union workers who typically earn far more than the minimum. Some public grants or taxes are also based on a multiple of the minimum wage, and this also can produce lobbying incentives in either direction. (For example, a worker may have an exemption if his earnings are below 2.5 times the minimum wage.)

Recent trends in the U.S.

Some idea of the empirical problems of this debate can be seen by looking at recent trends in the United States. The minimum wage fell about 29% in real terms between 1979 and 2003. Yet real wages have risen in the free market anyway, with real hourly earnings up by 7% since 1997. Some argue that a declining minimum wage might reduce youth unemployment (since these workers are likely to have fewer skills than older workers).^[16] Over all, there is no consensus between economists about the effects of minimum wages on youth employment, although empirical evidence suggests that this group is most vulnerable to too high minimum wages^[17].

Views of Card and Krueger

The more common debate is on changes to minimum wages. This unified view was challenged by empirical research done by David Card and Alan Krueger. In their 1997 book Myth and Measurement: The New Economics of the Minimum Wage (ISBN 0-691-04823-1), they argued the negative employment effects of minimum-wage laws to be minimal if not non-existent (at least for the United States). For example, they look at the 1992 increase in New Jersey's minimum wage, the 1988 rise in California's minimum wage, and the 1990-91 increases in the federal minimum wage. In each case, Card and Krueger present evidence ostensibly showing that increases in the minimum wage led to increases in pay, but no loss in jobs. That is, it appears that the demand for low-wage workers is inelastic. Also, these authors reexamine the existing literature on the minimum wage and argue that it, too, lacks support for the claim that a higher minimum wage cuts the availability of jobs.

Critics of this research, however, argue that their research was flawed^[18]. For example, Card and Krueger gathered their data by telephoning employers in Pennsylvania and New Jersey, asking them whether they intended to increase, decrease, or make no change in their employment. Subsequent attempts to verify the claims requested payroll cards from employers to verify employment, and ostensibly found that the minimum wage increases were followed by decreases in employment. On the other hand, data analysis by David Neumark and William Wascher, economists who are usually critical of minimum-wage increases, supported the Card/Krueger results.[2]

Agreement with Card and Krueger

Since the introduction of a national minimum wage in the UK in 1999, its effects on employment were subject to extensive research and observation by the Low Pay Commission. The bottom line there is, employment has not been reduced, productivity has increased in affected companies (especially service companies),^[19] and neither trade unions nor employer organisations contest the minimum wage, although especially the latter had done so heavily until 1999.

From the other side, some leading economists accept the Card/Krueger works and agree with their results [3].

Disagreement with Card and Krueger

According to the Joint Economic Committee of the United States Congress, Card and Krueger's work flies directly in the face of every piece of empirical research done on minimum wage laws within the United States within the past 50 years. ^[20] Minimum wage laws have been shown to cause large amounts of unemployment, especially among low-income, unskilled, black, and teenaged populations, as well as cause a host of other mal-effects, such as higher turnover, less training, and fewer fringe-benefits.

Theoretical arguments

The traditional economic argument views the labor market as largely competitive. In competitive markets, the market price settles to the marginal value of the product. Therefore, under the competitive assumption, absent a minimum wage, workers are paid their marginal value. As is the case with all (binding) price floors, minimum wage laws are predicted to result in more people being willing to offer their labor for hire, but fewer employers wishing to hire labor. The result is a surplus of labor, or, in this case, unemployment.

An alternate view of the labor market has low-wage labor markets characterized as monopsonistic competition wherein buyers (employers) have significantly more market power than do sellers (workers). Such a case is a type of market failure and results in workers being paid less than their marginal value. Under the monoposonistic assumption, an appropriately set minimum wage could increase both wages and employment, with the optimal level being equal to the marginal productivity of labor^[21]. This view emphasizes the role of minimum wages as a market regulation policy akin to antitrust policies, as opposed to an illusory "free lunch" for low-wage workers. Detractors point out that no collusion between employers to keep wages low has ever been demonstrated, asserting that in most labor markets, demand meets supply, and it is only minimum wage laws and other market interference which cause the imbalance.

EITC vs. minimum wage

If they do exist, it is clear that some of the adverse effects can only occur when minimum wages are implemented and successfully enforced by government fiat: either these effects are a consequence of the cost of wage regulation or they do not exist. If, however, a floor on wages is implemented indirectly by providing wage subsidies, it would not cause decreased employment. However, such a program must necessarily be funded by taxation; current taxes exert a significant excess burden on the economy.

When attempting to model complex systems of any sort, attributing a direct causal relationship with a single variable is difficult at best, especially with something that has as many factors as economics does.

While straightforward Pigovian subsidies would have funding problems, particularly when introducing them for the first time, there are other approaches. One was examined by Professor Kim Swales of the University of Strathclyde.^[22] This avoids funding problems by not having an actual subsidy but a virtual one — the funds flow is always from employers to the government, being netted off by the virtual subsidy before funds ever change hands. This may also be analysed by means of game theory (e.g "the prisoner's dilemma" or "the tragedy of the commons").

Alternatively, in the United States, many economists see the Earned Income Tax Credit (EITC, a wage subsidy) in the Federal income tax as providing the poverty-fighting benefits of the minimum wage without the non-budgetary costs, while being superior to most welfare state anti-poverty programs. One problem has been that many of the working poor (the target of this program) have a hard time with the tax forms needed to receive the EITC payment. There may also be long delays between when the money is needed and when the EITC payments are received. That is, a person might become eligible for the EITC in April but then get laid off for the rest of the year. But this person would not get help from the credit until nearly a year later (since Americans pay their taxes sometime between January and April). Further, like with the minimum wage, those people working at home taking care of children and other loved ones do not receive any benefits; only those doing paid labor are rewarded.

Finally, if these kinds of "complications" do not exist, it is possible that the benefit of the tax credit is received by the employer: assume that for low-skill workers the equilibrium market wage equals "X." Before the EITC is introduced, all of this wage is paid by their employers. After the EITC is instituted, the workers receive Y + Z, where Y is the new wage paid by employers and Z is the tax credit. If the labor market returns to the same equilibrium, then X = Y + Z. This means that the low-skill workers receive exactly the same amount as before the EITC was introduced and that the employer is paying less to the employees. This issue needs to be examined further, assuming that a model can be created that allows objectivity to control the experiment(s)rather than external factors.

See also

• 30 Days#1: Minimum Wage
• Garcia v. San Antonio Metropolitan Transit Authority
• Labor market
• Labour and employment law
• List of minimum wages by country
• List of U.S. state minimum wages
• Living wage
• Maximum wage
• Nickel and Dimed
• Positive rights
• Wage slave

References

1. ^ ^a b ILO 2006: Minimum wages policy (PDF)
2. ^ Staff (4 October 2005). SALAIRE GARANTI: MINIMUM WAGE (GUARANTEED). European Employment and Industrial Relations Glossaries. European Foundation for the Improvement of Living and Working Conditions. Retrieved on 22 June 2006.
3. ^ Staff (17 June 2006). History of the National Minimum Wage. Employment Matters. United Kingdom Department of Trade and Industry. Retrieved on 22 June 2006. Note: Date enacted was 1 April 1999
4. ^ Eurostat (2006): Minimum Wages 2006 - Variations from 82 to 1503 euro gross per month (PDF)
5. ^ http://www.house.gov/jec/cost-gov/regs/minimum/50years.htm
6. ^ Ehrenberg, Ronald G. Labor Markets and Integrating National Economies, Brookings Institution Press (1994), p. 41
7. ^ Williams, Walter (1989): South Africa's War Against Capitalism, Praeger Publishers
8. ^ OECD (2006): OECD Employment Outlook 2006 (read-only PDF)
9. ^ Minimum Wage Laws in the States - April 3, 2006. U.S. Department of Labor. Retrieved on 2006-09-17.
10. ^ Granholm signs law increasing minimum wage. Detroit Free Press. Retrieved on 2006-09-17.
11. ^ Fuller, Dan und Doris Geide-Stevenson (2003): Consensus Among Economists: Revisited, in: Journal of Economic Review, Vol. 34, No. 4, Seite 369-387 (PDF)
12. ^ "The Effect of Minimum Wage Increases on Retail and Small Business Employment", Employment Policies Institute, May 2006.
13. ^ "Minimum Wage Teen-age Job Killer", NATIONAL CENTER FOR POLICY ANALYSIS, May 20, 1999.
14. ^ "Great Myths of the Great Depression (page 10)", Mackinac Center for Public Policy, April 22, 2006.
15. ^ Tupy, Marian L. Minimum Interference, National Review Online, May 14, 2004
16. ^ "Minimum Wages and Youth Employment in France and the United States", Cornell, May 1997.
17. ^ Ghellab, Youcef (1998): Minimum Wages and Youth Unemployment, ILO Employment and Training Papers 26 (PDF)
18. ^ "Myth and Measurement: The New Economics of the Minimum Wage", Cato, April 22, 2006.
19. ^ Low Pay Commission (2005): National Minimum Wage - Low Pay Commission Report 2005 (PDF)
20. ^ http://www.house.gov/jec/cost-gov/regs/minimum/50years.htm
21. ^ Alan Manning (2003) Monopsony in motion: Imperfect Competition in Labor Markets (ISBN 0-691-11312-2)
22. ^ See: Swales, Kim; D R Holden, G Beacon (November 1995). Employment friendly VAT (The Employment Effect of Subsidies). Report to the Directorate General Employment, Industrial Relations and Social Affairs, Commission of the European Communities. Fax From Nowhere (faxFN). Retrieved on 1 July 2006.

External links

• Minimum Wage Issue Guide by the Economic Policy Institute
• [4] by Policy Matters Ohio
• EIROnline: Minimum wages in Europe
• Low Pay Commission in the United Kingdom
• UK Department of Trade and Industry - The National Minimum Wage
• U.S. Department of Labor statistics
• Raising the National Minimum Wage: Information, Opinion, Research
• Average U.S. farm and non-farm wages compared to the minimum wage (1981 - 2004)
• Impact of Proposed Minimum-Wage Increase on Low-income Families (PDF) by the Center for Economic and Policy Research
• Center for Policy Alternatives – Minimum Wage Policy Model
• Find It! By Topic: Wages: Minimum Wage U.S. Department of Labor
• Wagenet - Australian Working Conditions
• Measuring the Full Impact of Minimum and Living Wage Laws
• Economist Paul Krugman on Minimum Wage Regulation
• Economist Philip Lewis - Centre for Labour Market Research - on the relationship between unemployment and minimum wages
• Mythology of the Minimum Wage by DW MacKenzie - Mises Institute
• Minimum Wage Research, Studies and Resources by The Heritage Foundation