In South Africa, there was a recent minimum wage raise, which attempted to improve the lives of the lower-class working citizens throughout the country. At first glance, minimum wage raises seem to be a wonderful and necessary change in order to give aid to the hard working people who aren't receiving the just treatment and payment that they deserve. This view, however, doesn't take into account the larger picture.
With the minimum wage raise in South Africa, as with other similar raises in other economically developing countries, the measures taken in an effort to help the lower class, ultimately serve to disrupt and decrease the lifestyles of the lower-class. Due to the lack of resources in many of the national industries such as manufacturing, many companies are forced to downsize, or to close their doors. In reality, these wage increases only serve to strengthen the middle class, and further marginalize those who had been struggling to scrape out a living on meager salaries, that they are no longer earning due to being let go.
South Africa already has one of the highest unemployment rates in the world, and with the recent wage increases, these unemployment rates are climbing. Along with higher unemployment comes higher crime rates, violence, and a greatly decreased standard of living throughout the country.
There was a similar situation in Honduras just a couple of years ago, when the then president Mel Zelaya opted to double the minimum wage. this resulted in hundreds of thousands of unemployed workers, because their employers were no longer able to pay them the new wages. Although this was certainly not the only factor, it helped to pave the way to the coup that would happen in Honduras later that year.
Minimum wage increases need to be taken in slow steps in order to secure improved conditions, but not at the expense of further oppressing the already downtrodden.
What can we as U.S. citizens do about this oppression? We can continue to support international aid programs, NGOs, and push our government to support these developing countries more than we already do. We, as a nation, certainly do give millions of dollars in foreign aid, and we also chose to support various markets with our imports from countries such as South Africa and Honduras. That being said, we also make choices that are made largely to further our own interests ONLY and do not take into account what negative effects these choices can have on the people in these countries.
For example, we chose to have a military presence in many of these countries, such as Honduras, but refuse to give them the real help that they need economically. We aer failing in our economic responsibility to be fair to the people of many of these countries. Under NAFTA and CAFTA, we are exploiting workers all over this hemisphere and creating working conditions that are ripe for minimum wage rage. As one of the world's economic superpowers, we have a responsibility to carry our fair trade which helps to give sustainable development to the most impoverished workers around the world.
Hopefully, we can keep our responsibilities in mind, and acknowledge that our actions as purchasers have power. Hopefully, we can make responsible decisions that positively affect the whole of humanity. Even choosing to buy fair trade coffee is a step in the right direction and can be a powerful symbol. A symbol for peace.
It's true, you're right about how when wages are raised it just ends up with more people losing their jobs and that sucks. and I think as a superpower we should help it really just depends on how much we should help. People here still don't have jobs from when the economy really started going down hill so it's kinda hard to say we need to help everyone else if we're not even helping ourselves.
ReplyDeleteSusan
Though I agree that minimum wage hikes cannibalize the job market, I actually believe in the fazing out of a minimum wage entirely.
ReplyDeleteI believe that a worker's wage is a contract between the employee and the employer. "Employers attempt to purchase the specific skills they need at the lowest available price, while individuals selling their labor attempt to find the highest-bidding employer."
This encourages workers to work harder, to obtain more education and learn new skills. This empowers the individual, rather than demeaning them to a government regulated salary that is rooted in political motivation rather than whats best for the people of this country.
The CATO Institute, a libertarian think tank, has some good stuff on this topic.
http://www.cato.org/pubs/pas/pa106.html
when minimum wage went up in America a few years back I thought "awesome more money"
ReplyDeletewhat I soon found out was that it meant everything went up in price.
exp: the Double Cheeseburger at Micky D's was taken off the dollar menu and in its stead we were given the sad replacement known as "the mcdouble"
for more on McDonald's and their ridiculous prices please see:
http://produmption.blogspot.com/2010/03/micky-ds-fees-adam.html
I think that Minimum Wage laws are crucial to the work force within the United States. It ensures an equal level of treatment (on some level) for people doing labor. I don't think that it would be wise to phase into a time without wage laws, Travis, because I feel like then our Capitalist machine fueled by endless greed would push even more people to the limits of marginalization. I think that the rich would become even richer, and the poor poorer.
ReplyDeletePeople are already motivated with higher paying jobs corresponding to higher education. The minimum wage laws help to serve as a security net to catch the nation's neediest individuals.
What I am trying to address in the article (though I apparently have not done so very well) is to describe the minimum wage increases in some other countries, how they are detrimental to their citizens, and how we as people of privelege can help.
Increase Minimum Wage = Increase Unemployment
ReplyDeleteThis is an open and shut case, the statistics are already out there and logically it makes sense. The article Trav posted from CATO is spot freaking on.
Alan, do you really think without minimum wage that the poor would become poorer? Wage laws don't make employers pay more income to employees, the market for their skills do.
For example, Company X has to pay a certain amount to someone or else they won't choose to work for them. They will choose to work for Company Y who will offer higher income to obtain their skills.
It in fact affects the poor negatively. If Company X has entry level positions they'd like to fill and only can invest $5/hour starting out, they are priced out if the Gov't sets minimum wage to $6/hour. They will choose not to hire at all, increasing unemployment. Which in the real world is exactly what happens.
Regardless as what you might see as "fair", having the Gov't intervene doesn't solve the problem, it compounds it. Pretty similar to almost all areas Gov't tries to dabble in actually
I feel like the gradual and steady increases that are incremented over a period of time, such as we have here in the U.S. does prevent the poor from becoming poorer.
ReplyDeleteYou are right, with increased minimum wage, there is an increase in unemployment. I guess my fear is then that without minimum wage, that employers will choose to pay people ridiculously low wages, and there will be people who choose to suffer through those conditions simply to eek out a living.
Migrant labor is a really good example of this. Migrant workers are so incredibly underpaid and over-worked it is ridiculous. They have no rights, and are trod on by Company X because Company X doesn't have to pay them a minimum wage.
I guess what I'm hoping for is some sort of grey area here that has to be met between a high minimum wage that takes jobs off the market and NO minimum wage, which would allow for exploitation of workers.
There was a time when we didn't have minimum wage and what Alan just described is exactly what happened. It didn't matter that people could work for either Company X or Company Y because both companies were paying next to nothing.
ReplyDeleteSearching for a gray area is exactly what we need to do. Extremes will never sustain a country. The government shouldn't control everything, but it shouldn't keep its nose out of everything either.
I don't see how increasing unemployment helps poor people.
ReplyDelete$5/Hr for an actual job > $6/Hr for an imaginary job
Continually increasing minimum wage is just another incentive for people to rely on the government for their well being. "Eh it doesn't matter let the govt handle it." Maybe taking minimum wage away will inspire people to do more, make them realize that in order to accomplish anything, they might need to make some changes. Find ways to develop skills and knowledge that are in high demand.
ReplyDeleteJust as a side note, if anyone is able to provide any statistics showing how much of the unemplyment% can be attributed to people who are too lazy to go out and find a job, that would be interesting to see.. There are plenty of jobs available when some effort is put into the search. You may have to make some sacrafices, financially or in other ways but the jobs are there.
hmm I was unaware that the original blog post was about minimum wage in America.... OH WAIT! It's not! It's about minimum wage in countries with unstable governments and a much bigger struggle with poverty than here in the U.S. Should America, being a superpower have to, or feel the need to help out these countries when thing like a raise in minimum wage causes lots of people to actually end up losing their jobs?
ReplyDeleteSusan
Although theoretically, allowing the market to regulate wages is phenomenal and makes the most logical sense, it just doesn't work in real life. It works relatively well for upper middle and upper class people who have access to good infrastructure and college degrees and so on, but not for the majority of the human population (both in the US and abroad), which are in fact, lower middle to lower class. Since the upper middle and upper class people make laws and since people who make laws check them against their own real life experience, it’s not shocking that our laws overwhelming favor upper management and deregulation of commerce.
ReplyDeleteBottom line is that market regulation of wages has been confirmed by real life experience; the problem is that it hasn’t been confirmed by EVERYONE’s real life experience.
We've tried it in various ways in various times throughout history and like Kacie and Alan said, the de-regulation of minimum standards for how we can treat people results in society treating people badly. Without minimum wage laws and basic labor laws, folks who grow our food and clean our toilets and pick up our trash would be ruined. Really, they would be ruined.
What's unfortunate is that in order to have this kind of safety mechanism (which is what the min wage is - it literally safeguards the lives of a certain subsection of folks in our society), the government has to constantly dance this fine line around how it effects those actually implementing the safety mechanisms (ie, mostly small businesses with tight budgets) versus how it effects those benefitting from the safety mechanism. It’s a dance where you can never avoid stepping on someone’s toes. Sure, min wage increases do cause job losses, but we often don't ask ourselves what does NOT increasing it lead to? In just one example, it may lead to single mothers who have to take 2 jobs to make ends meet, which takes away any time they might have had to actually be a parent and raise productive, healthy children. This manifests itself in cycles of crime, addition and poverty for that child down the road and costs society a lot of money in prison systems, crime control, etc.
The real question we should be asking about minimum wage laws is not if they are "good" or "bad," theoretically, but thoughtfully considering how to make balanced choices when weighing ALL societal consequences, instead of pulling one statistic out in isolation as if the world is separated out in silos like that. I think it's fine to say you don't want to raise min wage b/c of possible job loss, but then address the other side of that - how does society handle all the problems that come with single parents who must work 2 jobs, or teenagers who have to take out bigger loans for college, etc.? You can't just throw one stat on the table and then peace out of the conversation....
Minimum wages v. market regulation is like creationism v. evolution. People can argue either side, backed up by facts, personal experience, and history. But at the end of the day, both sides leave you wanting for more.
I think the Government should just try to update the minimum wage rate as closely and immediately as they can to the rate of inflation, if the minimum wage rate were moving similarly to the rate of inflation every working individual and the companies providing those jobs would be able to live comfortably.
ReplyDeleteThink about it, an increase in minimum wage = an immediate increase in market values and demand and in turn increases how much things cost until minimum wage isn't enough for how much living life costs. At that point the minimum wage is raised again to accomodate for those people who need it to get by to be able to get by. As inflation becomes to much to much for people to get by and they stop spending and start saving the companies they work for start losing money, their budgets tighten and they start letting people go because they can't accomodate all of their expenses in a stagnant economy and the salaries and jobs are the first to go. In turn there are more people are being unemployed when the higher minimum wage laws go into effect. By raising the wages there are immediate clearing outs in any business that can definitely not find room in their budget to keep the same number of people on at higher wages; so in the short term a lot of people are let go. Even though there is higher unemployment the employed now have more money and can slowly start restoring growth to the economy and businesses slowly get more profits to add to their bankrolls. What we are seeing happening in the US right now is the slow economic growth, people are slowly starting to spend more. Not enough businesses are making enough profits to start hiring back the jobs they lost, in fact, I would say most businesses are moving on more efficiently and will continue to hire at the smaller rate that they have been.
So what needs to happen is new job markets need to open so that the currently unemployed can enter new fields and for the time being the minimum wage rate needs to be linked to the rate of inflation which is something that changes daily and could help people a lot in the short terms of economic down fall.