...Economics & Market Update 2 May 2012 Minimum Wage Labour Day “Gift” Another SRI delivered. PM Najib announced the country’s minimum wage policy on the eve of Labour Day. The National Minimum Wage Policy is part of the Strategic Reform Initiatives (SRI) for Human Capital Development under the Economic Transformation Programme. The minimum wage is set at MYR800-MYR900 per month with some allowances or fixed cash payments allowed to be considered in the calculation for minimum wage. It will be enforced six months from the date the Order is gazetted and will benefit 3.2m private sector workers (26%) out of the 12.3m total employment in the country. Impact on inflation should be gradual. Labour costs account for 9% of total production costs for the whole economy. But with only 26% of workers to benefit from the minimum wage, this group, at most, constitutes only 2.4% of total production cost, we estimate. According to a World Bank study in 2011, Malaysia’s wage growth (2.6% p.a.) was slower than productivity growth (6.7% p.a.), implying the capacity to implement minimum wage without causing excessive inflation rate pressures. We expect a gradual impact on inflation and maintain our inflation rate forecasts of 2.7% for 2012 and 3.3% for 2013. Gradual implementation to help manage the impact. The impact on other macroeconomic variables like employment and investment can only be gauged after some time since this is the first time an economywide minimum wage is being implemented. The Government...
Words: 6964 - Pages: 28
...EXECUTIVE SUMMARY This report is highly recommended for companies planning to go international. The basis of selecting a suitable location for a new factory is great importance towards the success and survival of company in the long run. Selecting of a good location for the factory enables employers to spend less money but still increase profitability for the company. The cost of manufacturing a product can be reduced through a proper factory location selection by considering such factors as minimum wage, employment insurance, government pension plan and other taxes which will be discussed later in this report. Location that offers lower cost always attracts more companies and investors. And in this report, Bloomington will be more attractive to company since it offers lower minimum wage and employment insurance, pension contribution and other taxes. After calculating the total cost to open new plant in Bloomington and Toronto, the supply chain analyst’s final decision will be made based on those costs. TABLE OF CONTENTS INTRODUCTION 2 BACKGROUND 2 DISCUSSION 2 Minimum Wage 2 Government Pension Plan 3 Other factors 3 CONCLUSION 4 Works Cited 5 INTRODUCTION As a supply chain analyst, it is very important to consider some factors which might impact positively or negatively in location of a new factory. By analyzing such factors as minimum wage paid, employment insurance, government pension plan and other taxes, the report will be helpful for the employer...
Words: 1026 - Pages: 5
...Landslide Limousines Employment Law Compliance Plan University of Phoenix Bradley Stonefield is looking to start a limousine service in Austin, Texas by the name of Landslide Limousines, which will provide first-class transportation to clients and customers. The first step in providing Human Resources advice and support to Stonefield is to research employment laws to determine how Landslide Limousines will stay in compliance, as well as any non-compliant issues that might come about. In the state of Texas, many of the employment laws follow Federal Law. For instance, Federal minimum wage is $7.25/hour, which is the wage that Texas has chosen to adopt. Assuming the Stonefield will be paying his drivers an hourly wage, one law he must be aware of is the Texas Minimum Wage Act. This law states that all non-exempt employees are entitled to at least $7.25/hour and are not prohibited from bargaining for a higher wage. It is possible that was specified restrictions, an employer may be able to apply tips to the hourly minimum wage. However, written verification of any employees pay must be documented (likely in the form of a paystub) to provide proof of correct wages in accordance with the Texas Minimum Wage Act. In the event that Landslide Limousines is incompliant with this law, employees will have up to two years to file legal charges against the employer or report the employer to the Texas Workforce Commission which will lead to the employer paying liquidated damages and fees...
Words: 799 - Pages: 4
...Abolishing the Minimum Wage ENGL 101 / Janet Stallard Carla Woods American Public University Abolishing the Minimum Wage Many Americans think of the minimum wage as a means of raising the income of the working people. However, the minimum wage is not the best way to combat poverty. In fact, the minimum wage does more harm than good. The list of its negative effects is a long one: it causes unemployment; it prevents unskilled workers from getting the on-the-job training they need; it encourages teenagers to drop out of school; it promotes the hiring of illegal aliens; and it increases welfare dependency. For all of these reasons, the minimum wage should be eliminated. To evaluate the minimum wage, we must first understand why it was originally created and what its historical effects have been. The minimum w age was introduced in 1938 by President Franklin Roosevelt. According to Dr. Burton W. Folsom (1998), a senior fellow in economic education for the Mackinac Center for Public Policy, the driving force behind this new legislation was not the plight of the working poor but the political might of the highly paid textile workers of New England, who were trying to protect their jobs as they faced competition from Southern textile mills. The Southern mills were able to produce cloth of equal quality more cheaply than their counterparts in the North because of the lower cost of living in the South, which allowed Southern factories to pay lower wages to their workers. In response...
Words: 1834 - Pages: 8
...Introduction Minimum wage refers to the lowest hourly, daily or monthly wage an employee is legally entitled to when working. Minimum wage is in effect in a range of different jurisdictions with differences in the views on the advantages and disadvantages being disputed by people. Supporters claim minimum wage increases the standard of living for workers whilst reducing poverty. Opposite views are that if it is high enough to be effective then it increases unemployment, particularly among workers who are inexperienced or handicap, thus harming the lesser skilled workers to benefit the better skilled workers The effect on employment rates due to minimum wage rates is a highly contested policy within economics. The introduction of minimum wage into the market can lead to competitive employers cutting employment; this depends on the rate of the wage rises require to comply with the current minimum wage according to the “standard textbook model”. Other models have also been suggested in which a decline in the employment rate may not occur and in fact employment may increase. During my research I found a wide range of literature on minimum wages, particularly on the effects of a minimum wage policy in place. Though a lot of informative research was concluding I also found the argument between weather the effects and positive of negative on employment, both sides of the disagreement present a large amount of information supporting the theories. Research before the 1990’s mostly...
Words: 2611 - Pages: 11
...Roles of State & Federal Governments in Employment Regulation Angela McIntosh Sullivan University Employment Law HRL404 Abstract This paper will provide an overview of the State and Federal regulations in employment and discuss relevant employment regulations. The findings will explain on how in today work environments that the business climate of companies seem to subject to a wide variety of laws and regulations. With these components in dealing with the regulated in benefits for employees that has become a particularly crucial issue in the past several years. State and Federal regulations play a large role in how a company treats its employees while at work. These laws ensure that those workers that report in dealing with the wrong doing of their employees are not discriminated. In concluding the State and Federal government have made sure that protection to the interest of the workers to carrying out their duties in a prudent manner and refrain from conflict of interest transactions specifically prohibited by law. The enforcement of the federal and the state minimum wage law to be enforced in the working field. The Federal Government has set up specific laws that apply to the regulation of unions and allows workers to join unions. The National Labor Relations Act allows the workers the option of joining an association. The government established the National Labor Relations Board...
Words: 1706 - Pages: 7
...Introduction This critical literature review will focus on the impact of the National Minimum Wage on employment. This is an area we have had to familiarise ourselves with more and more throughout the last ten years because of the controversial effect of its instalment in April 1999 and its ever increasing minimum wage amount which causes most concern. The application of a few statistics should help summarise the ever increasing minimum wage and the sheer scale of people affected by its introduction. The national minimum wage has increased by a staggering 59% in the last ten years; from £3.60 in April 1999 to £5.73 in October 2008. (HRM, 2008) According to George Sayers Bain (1999) as from April 1999, the year of its instalment , “some two million low paid workers will gain. To put that into a different context is one in twelve employees; one in three house workers; one in five part time workers. The obvious reason for its introduction was to reduce poverty pay levels while at the same time decreasing the wage differentials of the minimum wage to the median wage of all workers. This is known as ‘the bite’ and is commonly used to assess the effectiveness of the minimum wage. (LPC, Low Pay Commission, 2007) As stated above the intention of this review is to firstly establish the effect of the National minimum wage on employment; justifying it as a positive, negative or mutual effect. Secondly to help incarcerate the purpose even more the retail sector will be focused on...
Words: 2214 - Pages: 9
...right to food in a country where approximately thirty percent of the population is below the poverty line and the only economic assets it owns is labor power, value-adding profitable employment is very important. NREGA The National Rural Employment Guarantee Act (5th September 2005), according to the Legislative Department of the Ministry of Law and Justice – ‘An Act to provide for the enhancement of livelihood security of the households in rural areas of the country by providing at least one hundred days of guaranteed wage employment in every financial year to every household whose adult members volunteer to do unskilled manual work and for matters connected therewith or incidental thereto’. The Panchayat or program officer validates applications at the village level, and the government provides a valid applicant with an employment within five kilometers and fifteen days. NREGA, UPA’s brainchild, started in two hundred districts in February 2006, spread across the country in two and a half years and now to over six hundred and twenty six districts. This was aimed towards benefitting the Indian economy and society where more than nine percent of the total labor force was unemployed. NREGA was brought into existence with an aim of - * Reducing unemployment in India by augmenting wage employment * Equally improving the purchasing power...
Words: 2691 - Pages: 11
...ENG 111 10 March 2014 The Reasons Why Federal Minimum Wage Is Raised U.S. President Barack Obama signed an executive order on February 12, 2014 to raise the minimum wage for federal contract workers to $10.10 an hour starting next year and encouraged employers nationwide to increase wages for their workers. The president also announced during his State of the Union address last month that he intended to take executive action to raise wages for federal contract workers (Mason). Order to understand this issue, we are going to understand what the Federal Minimum Wage is and when started it in the U.S.A. According to the United States Department of Labor (USDL), early in the administration of the Fair Labor Standard Act (FLSA), it started to be apparent that the use of the legal minimum wage was prone to producing undesirable efforts upon the financial systems of Puerto Rico and also the Virgin Island if put on all their covered industries. As a result, on June 26, 1940, an amendment was passed prescribing the establishment of special industry committees to find out, and problem through wage orders, the minimum, wage levels relevant in Puerto Rico and also the Virgin islands. The rates established by industry committees might be under the legal rates relevant elsewhere within the United States. In 1949, the minimum wage was elevated from 40 cents an hour or so to 75 cent an hour so for those employees and minimum wage coverage was extended to incorporate employees in mid-air...
Words: 1800 - Pages: 8
...MINIMUM WAGES ACT, 1948 Background A tripartite Committee Viz., "The Committee on Fair Wage" was set up in 1948 to provide guidelines for wage structures in the country. The report of this Committee was a major landmark in the history of formulation of wage policy in India. Its recommendations set out the key concepts of the 'living wage', "minimum wages" and "fair wage" besides setting out guidelines for wage fixation. Article 39 states that the State shall, in particular, direct its policy towards securing (a) that the citizen, men and women equally shall have the right to an adequate livelihood and (b) that there is equal pay for equal work for both men and women. Article 43 states that the State shall endeavour, by suitable legislation or economic organization or in any other way, to give all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure, and social and cultural opportunities. Enactment of the Minimum Wages Act Historical Backdrop * The initiative started with the resolution placed by one Shri. K. G. R. Choudhary in 1920 for setting up Boards for determination of minimum wages in each industry. * The International Labour Conference adopted in 1928 Convention No.26 and Recommendation No. 30 relating to wage fixing machinery in trades or parts of trades. * On the recommendation of the Standing Labour Committee and Indian Labour Conference, a Labour Investigation Committee...
Words: 2630 - Pages: 11
...austerity measures that financial markets are now pressing on most advanced industrial nations. But rather than being rewarded for its actions, though, Ireland has been penalized. Industrial Relations are about the balance of power and control between the employers and employees. The Industrial Relations climate is changing very fast, with many strikes than any time since the 1970's. The cause is that we are in the middle of an economic crisis. Towards 2016, partnership, with it linked incremental percentage wage increases, can be described as ambition. Unemployment rate in Ireland stands at 14.8 per cent, from 4 per cent.” The EU-IMF-ECB troika described levels of joblessness as “unacceptably high, especially among the youth” in its latest review of the State’s bailout programme last week.” (Minihan, 2012). ‘During the recent crisis, it says that increases in youth unemployment were “significantly higher” in countries with high minimum wages than in countries where minimum wage was below the median.’ ( Sheehan 2012). “Employers would be paid four-figure cash incentives to retain interns and recruit long-term unemployed people under two new schemes being considered by Ministers for announcement on budget day.” ( Minihan, 2012) It is argued, that “industrial relations is increasingly being dominated and reshaped by legal processes while concerns about the dynamics of collective bargaining and gradually being pushed to one side”.(Tim...
Words: 2115 - Pages: 9
...Initially minimum wage was set at $0.25 in 1938 by President Franklin Delano Roosevelt. It has been increased 22 times by congress, when I went from $6.55 to $7.25 an hour. Many people who are working for a higher minimum wage claim that $7.25 is not enough to live off of and they believe that if it were to increase, it would help create more jobs in the community and grow the economy. Although there are some with other opinions, and say that some businesses cannot afford to pay more and might have to lay off workers, reduce hiring, or even close down due to low expenses. Increases have been shown to make it more difficult for low-skilled workers with little or no work experience to find jobs or become upwardly mobile. In 1939 the Women's Party of Connecticut argued that while the minimum wage law covering women and minors was designed to protect them, it was actually harmful and the conditions placed on their employment made them less employable than men. The National Industrial Recovery Act (NIRA), the first piece of legislation that attempted to establish a federal minimum wage, was passed by congress and signed by President Roosevelt in 1933. NIRA was declared unconstitutional by the Supreme Court in 1935 as it was deemed an "unconstitutional delegation of legislative power." Elements of the NIRA, such as minimum...
Words: 722 - Pages: 3
...obesity, and the minimum wage Chad Cotti a, Nathan Tefft b,* a b Department of Economics, University of Wisconsin Oshkosh, Oshkosh, WI 54901, USA Department of Economics, Bates College, Lewiston, ME 04240, USA A R T I C L E I N F O A B S T R A C T Article history: Received 1 August 2011 Received in revised form 22 March 2012 Accepted 9 April 2012 Available online 15 April 2012 Recent proposals argue that a fast food tax may be an effective policy lever for reducing population weight. Although there is growing evidence for a negative association between fast food prices and weight among adolescents, less is known about adults. That any measured relationship to date is causal is unclear because there has been no attempt to separate variation in prices on the demand side from that on the supply side. We argue that the minimum wage is an exogenous source of variation in fast food prices, conditional on income and employment. In two-stage least-squares analyses, we find little evidence that fast food price changes affect adult BMI or obesity prevalence. Results are robust to including controls for area and time fixed effects, area time trends, demographic characteristics, substitute prices, numbers of establishments and employment in related industries, and other potentially related factors. ß 2012 Elsevier B.V. All rights reserved. JEL classification: I18 J38 H20 Keywords: Fast food prices Obesity Body mass index Minimum wage 1. Introduction ...
Words: 11767 - Pages: 48
...cohesion. Project Nr. 290657 Hermine Vidovic vidovic@wiiw.ac.at Vienna Institute for International Economic Studies www.wiiw.ac.at Please cite as: Vidovic H., (2013), ’Labour Market Developments and Social Welfare’, GRINCOH Working Paper Series, Paper No. 4.01 Labour Market Developments and Social Welfare Abstract Employment and activity rates in the new EU Member States (NMS) declined significantly up to the early 2000s and started to increase along with strong GDP growth thereafter. Job losses following the outbreak of the economic and financial crisis varied substantially across countries and have not been offset yet. Overall, the low educated and the young people are very disadvantaged on the NMS labour markets. With the exception of Poland and Slovenia, non-standard types of employment are uncommon in the NMS, following the pattern of Southern EU countries. Employment protection legislation has been adjusted to ‘European standards’ in the entire region. Union density and consequently the impact of trade unions on wage setting and employment in the NMS fell dramatically. In all NMS unemployment insurance schemes as well as minimum wage regulations were introduced at the beginning of the 1990s, but are less generous than in the EU-15. Content...
Words: 16363 - Pages: 66
.............. 3 What is NREGA / MGNREGA .............................................................................................................. 3 WHAT ARE THE GENERAL BENEFITS RTW / MGNREGA ..................................................................... 4 HOW IS THE PROGRAM FINANCED? .................................................................................................. 4 Financing pattern ............................................................................................................................... 4 Release of funds ................................................................................................................................. 4 Comparison : RTW/MGNREGA Vs other government based employment schemes ........................ 5 Impact of RIGHT TO WORK / MGNREGA ........................................................................................... 5 Increase in GDP .................................................................................................................................. 5 Effect on Inflation .............................................................................................................................. 6 Recommendations ............................................................................................................................. 7 REFERENCES ...................................................................................................................................
Words: 2277 - Pages: 10
