The previous article presents the minimum wage dilemma. Eventhough many middle-class and low-income group may favour a minimum wage policies, goverments of emerging economies (a.k.a. developing countries) may delay introducing a minimum wage policies due to the fact "As an emerging country, the pressure to maintain low wage policies has been considered as an unfortunate – but necessary — outcome in order to achieve low unemployment rates and steady job growth. Overseas manufacturing-based industries will automatically seek out the most efficient labour market for their plant locations. Thus, we should not misguide and sacrifice workers’ wages in a “race to the bottom” and compensate with foreign direct investment inflow. "
Goverments with no minimum wage policies (low wages policies) are often seen good on the record with low unemployment rates and up-to-expected foreign direct investment inflow. The author of the previous article posted on this blog calls for "improving infrastructure, enhancing labour productivity and labour movements, establishing better vocational training, eliminating political influence over the minimum wage avoiding drastic increases, and implementing good governance policies."
In my opinion, minimum wage should be implemented with the objective of eradicating hardcore poverty and cushion the effect of stagnant wages and rising cost of living. There should be a general minimum wage policy, followed by fine-tuned conditions under it. For example, a labourer may have a lower minimum wage if lodging/ accomodation and/or meals/ and/or transportation are provided by the employer, reflecting the current rising cost of living.
Minimum wage policy should be determined by the purchasing power of the residents of the country/ state. (United States has a federal minimum wage, and state minimum wage which the higher wage is enforced). For example, a day's minimum wage (8 to 12 working hours) must exceed the ability of the employee to pay for three descent meals and other basic cost of livings. In a more detailed manner, for a month's minimum wage, an employee is able to pay for 5kg of rice, 2kg of flour, 500gm of sugar, 20 eggs, 2 chickens, 500gm of oil, 200 liter of crude oil and have at least 70% of the wages left for access to healthcare, education, family, savings, and accomodation.
It would be undeniable that by enacting a minimum wage policy (in a country without that policy) will lead to a higher unemployment rate because it means a higher production cost for the employers. By setting a minimum wage policy, a goverment may provide options for employers to implement the policy or face a higher corporate tax rate, which it's higher tax revenue will be used to improve workers' skills, vocational training, productivity and quality of education.
Remember, enacting a minimum wage policy is not a one-off solution to hardcore poverty and curb inflation but one of the crucial steps to prevent the poor getting poorer and offer an opportunity for hard-working people to improve their standard of living.
In the end,
1) a good government must serve its people!
2) if the government cannot serve its people, then it should be changed!
3) if a government said that a minimum wage will lead to higher unemployment permanently, then it is not thinking enough! Because the growing population of a country and the world will means a higher demand for food! clothes! education! healthcare! services! Don't tell me you cannot create job opportunities on these sectors, then it should be changed!
In Malaysia (year of 2012), I would said an employee without food, accomodation and logistic provided by the employer must get at least RM 1000 or USD$ 320 per month (Federal mimimum wage):,
1) RM 300 (Food, RM 10 a day for 30 days)
2) RM 200 (Accomodation, an average room rent-rate per month)
3) RM 90 (Healthcare, insurance)
4) RM 90 (Utility bills, communication bills)
5) RM 90 (Transportation: fuel, maintenance, tickets..etc)
6) RM 120 (Clothing, shoes, savings)
7) RM 110 (Deduction for Employee's Provident Fund for retirement)
+ Goverment must strengthen Welfare Insituitions/ Agencies to help poor families with dependent children or elderly, after all RM 1000 is only barely liveable for a single person with no debts or family responsibilities and would still be tough for those who lives in urban areas.
States/ Territories (year of 2012) like Penang, Selangor, Kuala Lumpur should have a State/ Council minimum wage of RM 1200 or USD$ 385 per month.
MINIMUM WAGE POLICY = OBJECTIVE TO ERADICATE POVERTY + CURB THE BURDEN OF RISING COST OF LIVING
That's all I have to say for now :)
God bless us all
Joshua
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