Employment as the Missing Link: Full Mediation of Minimum Wage Effect on Per Capita Income in Central Java

New Zealand has seen dramatic changes in minimum wage policies since 2000. The adult minimum wage has increased 75% in CPI-adjusted real terms. In addition, the youth minimum wage was abolished in two stages, resulting in a 125% increase in the real minimum wage for 16–19-year-old workers. We review the motivations for minimum wages and the changes and analyse how they have affected workers outcomes. We find that the minimum wage now strongly determines the wages of teenage workers, with the minimum wage now at the median wage of teenagers, and over half of 16–17-year-olds, and about 40% of 18–19-year-olds, earning at or below the minimum. Although we find no clear evidence that increases in the minimum wage have led to adverse employment effects, we expect there are downside risks for youth and low skilled workers’ employment. As minimum wage workers are broadly spread across the household income distribution, we conclude that minimum wages are largely ineffective as a redistributive income support policy

New Zealand has seen dramatic changes in minimum wage policies since 2000. The adult minimum wage has increased 75% in CPI-adjusted real terms. In addition, the youth minimum wage was abolished in two stages, resulting in a 125% increase in the real minimum wage for 16–19-year-old workers. We review the motivations for minimum wages and the changes and analyse how they have affected workers outcomes. We find that the minimum wage now strongly determines the wages of teenage workers, with the minimum wage now at the median wage of teenagers, and over half of 16–17-year-olds, and about 40% of 18–19-year-olds, earning at or below the minimum. Although we find no clear evidence that increases in the minimum wage have led to adverse employment effects, we expect there are downside risks for youth and low skilled workers' employment. As minimum wage workers are broadly spread across the household income distribution, we conclude that minimum wages are largely ineffective as a redistributive income support policy.

New Zealand has seen dramatic changes in minimum wage policies since 2000. The adult minimum wage has increased 75% in CPI-adjusted real terms. In addition, the youth minimum wage was abolished in two stages, resulting in a 125% increase in the real minimum wage for 16–19-year-old workers. We review the motivations for minimum wages and the changes and analyse how they have affected workers outcomes. We find that the minimum wage now strongly determines the wages of teenage workers, with the minimum wage now at the median wage of teenagers, and over half of 16–17-year-olds, and about 40% of 18–19-year-olds, earning at or below the minimum.Although we find no clear evidence that increases in the minimum wage have led to adverse employment effects, we expect there are downside risks for youth and low skilled workers' employment. As minimum wage workers are broadly spread across the household income distribution, we conclude that minimum wages are largely ineffective as a redistributive income support policy.

Abstrak - Upah minimum merupakan komponen penting bagi Masyarakat yang bekerja di sektor formal, saat ini Jawa Tengah dikenal sebagai wilayah dengan upah termurah di Pulau Jawa. Pada tahun 2023 Jawa Tengah ditetapkan sebagai daerah dengan upah minimum terendah di Indonesia yakni sebesar Rp 1.958.169,69. Penelitian ini bertujuan untuk mengetahui faktor-faktor yang mempengaruhi besaran Upah Minimum Kabupaten/Kota (UMK) di Provinsi Jawa Tengah khususnya pada periode 2000-2022. Studi ini melakukan uji regresi data panel (Fixed Effect Model) terhadap faktor-faktor yang mempengaruhi UMK yakni: pertumbuhan ekonomi, inflasi, pendapatan domestik regional bruto (PDRB), tingkat partisipasi angkatan kerja (TPAK), dan indeks pembangunan manusia (IPM). Data yang diolah merupakan data sekunder yang bersumber dari Badan Pusat Statistik. Berdasarkan hasil pengujian, didapatkan bahwa pertumbuhan ekonomi, PDRB per kapita, dan inflasi berdampak positif signifikan terhadap UMK sementara TPAK dan IPM memiliki dampak negatif. Hal ini berimplikasi pada perlunya peningkatan produktivitas penduduk Jawa Tengah agar terjadi peningkatan besaran upah minimum.Kata Kunci: Upah Minimum Kabupaten/Kota, Angkatan Kerja, Pendapatan Perkapita Abstract- The minimum wage is an important component for people working in the formal sector, and currently, Central Java is known as the region with the lowest wages on Java Island. In 2023, Central Java was established as the region with the lowest minimum wage in Indonesia, amounting to IDR 1,958,169.69. This study aims to identify the factors influencing the amount of the District/City Minimum Wage (UMK) in Central Java Province, specifically for the period 2000-2022. This study conducted a panel data regression test (Fixed Effect Model) on the factors influencing the UMK, namely: economic growth, inflation, gross regional domestic income (GRDP), labor force participation rate (LFPR), and human development index (HDI). The processed data is secondary data sourced from the Central Statistics Agency. Based on the test results, it was found that economic growth, per capita GRDP, and inflation have a significant positive impact on the UMK, while the LFPR and HDI have a negative impact. This implies the need to increase the productivity of the people of Central Java in order to increase the minimum wage. Keywords: District/City Minimum Wage, Workforce, Per Capita Income

Exposure to stressful life events (SLEs) before and during pregnancy is associated with adverse health for pregnant people and their children. Minimum wage policies have the potential to reduce exposure to SLEs among socioeconomically disadvantaged pregnant people. To examine the association of increasing the minimum wage with experience of maternal SLEs. This repeated cross-sectional study included 199 308 individuals who gave birth between January 1, 2004, and December 31, 2015, in 39 states that participated in at least 2 years of the Pregnancy Risk Assessment Monitoring Survey between 2004 and 2015. Statistical analysis was performed from September 1, 2022, to January 6, 2023. The mean minimum wage in the 2 years prior to the month and year of delivery in an individual's state of residence. The main outcomes were number of financial, partner-related, traumatic, and total SLEs in the 12 months before delivery. Individual-level covariates included age, race and ethnicity, marital status, parity, educational level, and birth month. State-level covariates included unemployment, gross state product, uninsurance, poverty, state income supports, political affiliation of governor, and Medicaid eligibility levels. A 2-way fixed-effects analysis was conducted, adjusting for individual and state-level covariates and state-specific time trends. Of the 199 308 women (mean [SD] age at delivery, 25.7 [6.1] years) in the study, 1.4% were American Indian or Alaska Native, 2.5% were Asian or Pacific Islander, 27.2% were Hispanic, 17.6% were non-Hispanic Black, and 48.8% were non-Hispanic White. A $1 increase in the minimum wage was associated with a reduction in total SLEs (-0.060; 95% CI, -0.095 to -0.024), financial SLEs (-0.032; 95% CI, -0.056 to -0.007), and partner-related SLEs (-0.019; 95% CI, -0.036 to -0.003). When stratifying by race and ethnicity, minimum wage increases were associated with larger reductions in total SLEs for Hispanic women (-0.125; 95% CI, -0.242 to -0.009). In this repeated cross-sectional study of women with a high school education or less across 39 states, an increase in the state-level minimum wage was associated with reductions in experiences of maternal SLEs. Findings support the potential of increasing the minimum wage as a policy for improving maternal well-being among socioeconomically disadvantaged pregnant people. These findings have relevance for current policy debates regarding the minimum wage as a tool for improving population health.

This study aims to examine the influence of socio-economic factors such as CPI, TPAK, GRDP, and per capita income on district/city minimum wages in Central Java Province from 2017 to 2021. The data used is secondary data with panel data from the Provincial Statistics Center Central Java. The linear regression analysis method was used with the Eviews 10 software. The study's results show that GRDP and per capita income have a big good effect on the minimum wage, while CPI and TPAK have a small effect. The government should maintain a good level of GDP growth and income per capita wage rates for workers in the Province of Central Java.

Federal, state and local departments of labor are managing the minimum wage levels. U.S. state minimum wage increases are positively associated with GRDP growth rates and education expenditure rates. Minimum wage increases are positively associated with economic capacities and human capital improvements. And U.S. state minimum wage increases are negatively associated with state citizen ideology scores. Thus, relatively conservative citizens are supporting the minimum wage increase and U.S. state governments/governors are reflecting these conservative citizen ideologies regardless of state governments' and state governors' ideologies. These are the strong evidences of state policy congruence in case of minimum wage policy. And politicians and public administrators should respect the evidence-based policy approaches. Specialist opinions, evaluation reports and experiences are excellent sources of evidence-based policy. Public policy decisions should be based on these evidence-based policy approaches. Especially, politicians and public administrators should manage the relationships between minimum wage policy and employment performances cautiously by using public performance measures and statistical research methods. And minimum wage policy should be harmonized with labor productivity improvement.

PurposeThis paper investigates the impact of quasi-exogenous and substantial increases in the minimum wage on child labor outcomes in Türkiye. The study aims to provide empirical evidence on how minimum wage policies affect child labor outcomes in a developing country context, with a focus on gender and age differences. It seeks to understand whether minimum wage increases lead to a reduction in child labor and whether the impact is different for various demographic groups.Design/methodology/approachThe research employs a difference-in-differences methodology using data from the 2012 and 2019 Child Labor Force Survey in Türkiye. The treatment group consists of children from households with minimum wage earners, while the control group comprises children from other households. Various labor market outcomes are analyzed, and robustness checks are performed.FindingsOur findings indicate that while the overall effect of minimum wage increases on child labor is statistically insignificant, there are notable heterogeneous impacts across different demographic groups and employment sectors. Specifically, we observe a significant reduction in the employment probability of girls under the age of 15 and unpaid family workers. Additionally, the likelihood of younger children being wage earners decreases, and the minimum wage increase reduces employment in the agriculture and services sectors for certain subgroups. The impact is also more limited for children in single-adult-worker households.Social implicationsThese results underscore the varying effects of minimum wage policies on child labor and highlight the importance of considering demographic and sectoral differences in policy formulation. Policymakers should complement such policies with income-generating programs and targeted education initiatives to address child labor issues more comprehensively and sustainably.Originality/valueThis study fills a critical gap in the limited international literature on the causal effects of minimum wage policies on child labor incidence. One notable exception, Menon and van der Meulen Rodgers (2018) have explored the impact of minimum wage on child labor in India using regional variation, our study uniquely analyzes the effects at the household level in Türkiye. This approach provides valuable insights into how minimum wage changes affect child labor outcomes in a developing economy context with a high prevalence of minimum wage earners. It also contributes to the broader economic understanding of child labor and household income dynamics.

In the 1990s, thirteen American states raised their minimum wage above the federal level, while the other thirty-five contiguous states retained the lower federal standard. An increased minimum wage should reduce employment among the lowest-paid workers, and therefore reduce their influx. Using individual-level data from the 5% Public Use Sample of the 2000 U.S. Census of Population, this research examines the effects of forty-eight contiguous U.S. states' minimum wage policies on the settlement choices of recently arrived Mexican and Central American immigrants. As predicted, the authors found that these Mexican and Central American immigrants were less likely to settle in states that implemented above-federal minimum wages during the 1990s as opposed to settling in states that retained the federal-level minimum wage during that decade. Conversely, states' minimum wage policies had no effect upon the influx of recent immigrants from other countries. These results suggest that states can influence the influx of low-wage immigrants by adjusting their minimum wage.

The labor market in Indonesia cannot absorb all of the labor force available, which allows employers to have greater bargaining power over employees. To protect and to increase labor welfare, the government issued minimum wages regulation. Although the purposes of the minimum wage policy were widely accepted, there is great disagreement about whether the minimum wage is effective in achieving its objectives. We found that the minimum wage policy in Indonesia has a positive impact on the average wage. 1 percent of the increase of the minimum wage will increase the average wage by 0.71-0.98 percent. The minimum wage has a negative impact on employment to the working age population ratio. 1 percent of the increase of the minimum wage will decrease the employment to population ratio by 0.62?0.76 percent. The minimum wage only affects total investment. Total investment will decrease 0.09% if the minimum wage increases by 1%.

Older adults may receive either or a combination of unpaid family/friend and paid caregiving. The consumption of family/friend and paid caregiving may be sensitive to minimum wage policies. We used data (n = 11,698 unique respondents) from the Health and Retirement Study and a difference-in-differences design to evaluate associations between increases in state minimum wage between 2010 and 2014 and family/friend and paid caregiving consumed by adults age 65+ years. We also examined responses to increases in minimum wage for respondents with dementia or Medicaid beneficiaries. People living in states that increased their minimum wage did not consume substantially different hours of family/friend, paid, or any family/friend or paid caregiving. We did not observe differential responses between increases in minimum wage and hours of family/friend or paid caregiving among people with dementia or Medicaid beneficiaries. Increases in state minimum wage were not associated with changes in caregiving consumed by adults age 65+.

BackgroundPoverty is associated with intimate partner violence (IPV), but whether exogenous increases in wage could reduce IPV among low-income women is still unclear. We examined whether the 2018 minimum wage...

This paper provides an overview of minimum wage policy in Ireland over the past 20 years, and survey the recent evidence on the economic impacts of a minimum wage. Drawing on this evidence, the report analyses the potential implications of the recent COVID-19 crisis on minimum wage employment in Ireland. The recent evidence shows that minimum wage increases in Ireland have not led to increased job loss among minimum wage workers, but have resulted in some reductions in hours worked among certain groups. Minimum wage increases have led to reductions in wage inequality and the minimum wage has been shown to be important in keeping wage inequality low during recessions. Recent estimates show that more than half of minimum wage employees in Ireland work in the retail, accommodation and food sectors. These sectors have experienced widespread business closures due to the COVID-19 crisis, suggesting that low-wage employees may be disproportionately impacted by job losses. Those who have lost their job may claim the Pandemic Unemployment Payment (PUP) of €350 per week. Minimum wage employees in retail or accommodation and food work, on average, 23 hours per week. This means that the PUP payment is 50 per cent higher than the gross weekly wage of the average minimum wage employee in these sectors. However, the PUP payment was an emergency short-term (12-week) measure, and it seems likely that it will be amended or tapered in coming weeks to address these types of anomalies.

The minimum wage literature focuses heavily on employment elasticity of minimum wage increases. In contrast, this study focuses on heterogeneity in minimum wage policy. Specifically, we study whether minimum wage increases lead to differential employment effects in states where minimum wages are indexed to inflation. We find evidence they do. To the best of our knowledge, this work is the first to empirically study inflation indexing. On balance, our results imply that the immediate disemployment effect of an increase in the minimum wage in a state that indexes its minimum wages to inflation is around three times the magnitude of the disemployment effect associated with a nominal increase in the minimum wage. Our finding is robust across both canonical and county-pair models, though it does not hold in our most restrictive specification. Examining the timing of the employment response reveals the disemployment effect associated with a change in the minimum wage is concentrated in the first 14 quarters after a state begins indexing minimum wages to inflation. [ABSTRACT FROM AUTHOR]

We re-examine the evidence presented by Neumark and Wascher (1992) on the employment effect of the minimum wage. We find three critical flaws in their analysis. First, the school enrollment variable that plays a pivotal role in their specifications is derived on the false assumption that teenagers either work or attend school. Measurement error biases contaminate all the empirical estimates that use this enrollment variable. Second, Neumark and Wascher measure the effect of the minimum wage by a coverage-weighted relative minimum wage index. This variable is negatively correlated with average teenage wages. Taken literally, their results show that a rise in the coverage-weighted relative minimum wage lowers teenage wages. Examining the direct effects of state-specific minimum wages, we find that increases in state minimum wages raise average teenage wages but have essentially no employment effects. Finally, a careful analysis of Neumark and Wascher's data shows that subminimum wage provisions are rarely used. This casts doubt on their claim that subminimum provisions blunt any disemployment effect of the minimum wage. Neumark and Wascher contend that other minimum wage studies are biased by failing to control for school enrollment, and by failing to consider the lagged effects of minimum wages. We re-analyze the experiences of individual states following the April 1990 increase in the Federal minimum wage, allowing for a full year lag in the effect of the law and controlling for changes in (properly measured) enrollment rates. Contrary to their claims, allowing for lagged effects and controlling for enrollment status actually strengthens the conclusion that the 1990 increase in the Federal minimum had no adverse employment effect.