Salario mínimo, pobreza y clase vulnerable, estudio de caso en Ecuador

BackgroundPrevious studies have concluded that minimum wages increase workers' wages. However, whether this effect will continue to improve households' food insecurity is an interesting question, especially in Indonesia, where food insecurity is still a public policy challenge. This study explores the ongoing impact of minimum wages on household food insecurity in Indonesia, leveraging data from the National Socioeconomic Survey (2017–2019) and provincial-level variations in minimum wages. The study employs unconditional quantile regression to provide nuanced insights by analyzing three food insecurity indicators: per capita calorie intake, per capita consumption of vegetables and fruits, and food diversity. We also investigate potential mechanisms driving the link between the minimum wage and food insecurity.ResultsThe study revealed that the real minimum wage reduced food insecurity, especially at specific distribution points. Significantly, the effect on per capita calorie intake was observed in lower deciles. The impact on dietary diversity was observed up to the seventh decile. However, the minimum wage increase did not significantly improve the consumption of nutritious foods like fruits and vegetables, except for the top deciles. The study confirmed that the minimum wage's impact on food insecurity operated through wage increases, particularly in the bottom-to-median wage distribution within the manufacturing sector.ConclusionsThe study concluded that the minimum wage policy ameliorated household food insecurity indicators in specific distribution segments. Our results support the effectiveness of government policies in increasing the minimum wage as a viable approach to mitigating food insecurity among formal worker households, especially within the manufacturing sector. However, additional policies targeting the lower end of the per capita calorie intake distribution are necessary, as the minimum wage was recognized to have no impact on this group.

This paper examines the impact of minimum wage on the employment of rural migrant workers using data from the 2011–2018 China Migrants Dynamic Survey (CMDS). The findings indicate that an increase in the minimum wage significantly enhances both the willingness to participate in the labour market and the employment rate among migrant workers. This result has passed a series of endogeneity and robustness tests. The heterogeneity analysis reveals that the impact of increasing the minimum wage is more pronounced among female, low-skilled, and young to middle-aged migrant workers. Additionally, the effects of minimum wage increases are more substantial in regions with effective implementation. Further analysis reveals that the increase in the minimum wage has raised the wage levels of migrant workers at the middle and lower percentiles. It has neither increased their working hours nor changed their probability of obtaining various social insurances and the form of labour contracts. The conclusion shows that the increase in the minimum wage from 2011 to 2018 did not harm the employment and welfare of migrant workers. Instead, a reasonable increase in the minimum wage is helpful to improve the wage level of migrant workers and narrow the wage gap within migrant workers.

The minimum wage has failed to target poverty and youth employment Summary In recent months, politicians have urged the Low Pay Commission (LPC) to consider a significant increase in the National Minimum Wage (NMW). In February the LPC recommended an increase of 3 per cent for October 2014, from £6.31 to £6.50, which was accepted by the government. This is a substantially smaller increase than suggested by the Chancellor of the Exchequer, who wanted the NMW to rise to £7 by 2015. The NMW has risen significantly relative to average earnings since its introduction in April 1999. During that time, the NMW increased by 75 per cent in nominal terms, whilst average earnings have increased by 61 per cent. Even since 2008, the NMW (14 per cent) has increased relative to average earnings (10 per cent), though more slowly than the price level. The idea the NMW can be safely raised stems from the belief that it has not had a negative effect on employment. The consensus view, however, is that minimum wages at moderate levels have a small negative impact on employment and that the level of the minimum wage matters. A recent HM Treasury submission to the LPC, for example, estimated that raising the NMW to £7 per hour would increase unemployment by 14,000 by 2018/19. There is also evidence of reduced working hours in response to NMW increases. International research suggests many of the negative effects operate after a long time period through reducing new job creation. Employment impacts of increases in the minimum wage are likely to disproportionately affect the young, the unskilled, the long-term unemployed and those in lower productivity regions. There is evidence that minimum wages lead firms to replace lower-skilled and less experienced younger workers with older workers. The 18-24 year old unemployment rate has risen from 11.5 per cent in April 1999 (when the NMW was introduced) to 17.9 per cent today. And of those unemployed within this age group, the proportion out of work for more than 12 months has risen from 14.4 per cent in 1999 to 31.8 per cent in 2013. The NMW is not a targeted poverty reduction tool. 46 per cent of those individuals in households defined as in poverty are workless: a minimum wage can do nothing to help them. Whilst many of those individuals currently on low pay would benefit from a NMW increase, many of the beneficiaries of a minimum wage are not in poor households. 44 per cent of low-paid workers are in households in the top half of the household income distribution. Some people have advocated a substantial increase in the NMW as a means of improving the public finances. However, the evidence suggests any net benefit is small. The improvement to the public finances of raising the NMW to £7 has been estimated to be just £30 million once all effects are considered. Claims employers are ‘subsidised’ by in-work benefits in the form of tax credits have some truth, but are exaggerated. Nearly a third of all tax credit recipient households do not have an adult in paid employment and a further million households work fewer than 30 hours per week. Reforming tax credits would be a better means of eliminating the degree to which tax credits subsidise the employers of the remaining full-time workers in receipt of credits. The ‘Living Wage’ is a misnomer for the three-fifths of those earning less than the Living Wage who are working part-time. Statutory implementation of a minimum wage at the Living Wage level could have a significant impact on employment and theviability of firms in a range of sectors. It has been estimated to cost 150,000 jobs, with substitution for older workers meaning 300,000 fewer young people employed. Recent proposals for the LPC’s scope to be extended would fundamentally change its remit from seeking to set a minimum acceptable wage floor to more inherently subjective aims, such as reducing inequality or assessing wages by sector. In the absence of a decision to abolish the NMW entirely, we recommend the government: · commits not to widen the remit of the LPC, which could make it more intrusive for employers whilst fundamentally changing the LPC’s aims · abolishes the minimum wage for apprentices and under 18s · suspends the minimum wage for all those under the age of 24 who have been unemployed for more than one year, for the first year of employment · instruct the LPC to regionalise the NMW from October 2015, taking into account regional productivity differentials. The LPC should examine each region on an individual basis, taking into consideration economic conditions and firms’ ability to pay, with the main emphasis placed on private sector employment

Debates on the impact of the minimum wage on the labor market are extensive and complex, highlighting both the potential for income growth and the risk of reducing opportunities for young, low- skilled or inexperienced workers. This article aims to analyze the impact of wage increases on entry-level employment, focusing on the number of employees aged 15-24. The specialized literature outlines this dichotomy between the benefits and challenges of raising the minimum wage, presenting mixed empirical evidence regarding its effects. One viewpoint is that increasing the minimum wage may have a positive effect on employment rates and productivity, in contrast, other research highlights the rising labor costs that discourage employers. This study employs quantitative data covering the period 2014-2023, sourced from National Institute of Statistics, Eurostat and the World Bank. The article applies a log-log regression model estimated using the ordinary least squares (OLS) method, with the dependent variable represented by the number of employed individuals in the 15-24 age group, serving as a proxy for entry-level employment. The independent variables include the youth unemployment rate, the minimum wage (RON), the inflation rate and GDP growth. The econometric model was implemented in Python, enabling the application of log-log regression and the examination of the relationship between minimum wage increases and youth employment. The study’s results suggest a negative elasticity between youth employment and minimum wage growth. Furthermore, the unemployment rate negatively affects youth employment, while inflation rate and GDP growth do not exhibit a statistically significant relationship with the dependent variable. This article contributes to the labor market literature, emphasizing the need to balance the pace of minimum wage increases with policies that support and integrate workers into entry-level positions.

Over the last 20 years, local municipalities have been implementing minimum wage ordinances at an accelerated rate. These local changes, along with state and federal minimum wage increases, are included in the examination of the impact of minimum wage hikes on employment growth of teenagers in the food services and drinking places subsector. While most minimum wage research focuses on employment levels, recent contributions highlight the importance of analyzing employment growth. Following this trend, this study focuses on teenagers within the restaurant industry to test for the impact of minimum wages on inexperienced workers. Using a distributed-lag model, the results show that an increase in a minimum wage reduces employment growth for teenagers within this subsector. The effects of minimum wages within this demographic were most strongly felt in the first three years following an increase in minimum wage. Specifically, the results show that a 10% increase in the minimum wage decreases the employment growth rate by approximately 2.27% over a period of three years.

1. IntroductionThe effect of a legal minimum wage on employee turnover is an important consideration when evaluating the effectiveness of a minimum wage policy. If an increase in the minimum wage results in greater turnover, then firms' hiring costs are increased, and the direct benefit to workers who are paid the minimum wage may be lessened. A reduction in turnover, on the other hand, would mean more stability for employers and workers, though access to minimum wage jobs may be reduced for job seekers. Despite the recent proliferation of studies on the effects of legal minimum wages, their impact on turnover has received relatively little attention from economists. This may be due to the fact that much of the literature focuses on the teen labor where there is more churning than in the adult labor (Gardecki and Neumark 1998). The fact remains, however, that a significant proportion of workers hired at the minimum wage are adults, and the effects of the minimum wage onthe turnover hazard are understudied.1Standard economic theory suggests that a price floor such as a minimum wage results in fewer transactions and in rents for those suppliers who manage to sell. In the context of the labor market, this means workers in minimum wage jobs may be expected to receive rents and, therefore, may be less likely to quit. Another possible consequence of a minimum wage arises from imperfect information in the labor market combined with heterogeneity among workers and jobs. Prior to the start of an employment relationship, the worker does not know all the relevant aspects of the job and the employer does not know all the important characteristics of the worker. As a result, in the absence of a mandated minimum wage, job applicants may use wage offers to infer information about the nonpecuniary aspects of jobs, thereby facilitating the matching process. A binding minimum wage compresses the wage distribution so that a single wage is associated with a larger array of jobs. This means that the wage offer becomes a poor indicator of a job's nonwage characteristics, which leads to a higher proportion of poor matches and, consequently, more turnover.This paper uses data on young men and women in the 1988-1994 rounds of the National Longitudinal Survey of Youth (NLSY) to estimate the relationship between the minimum wage and the turnover hazard. The extent to which the minimum wage binds varies across states both because of differences in state laws and because of differences in wage levels across states. We exploit this variation to estimate turnover hazards as a function of the ratio of the nominal minimum wage to the state median wage. This variable measures the extent to which the minimum wage binds.We find some evidence that in states where the minimum wage is low relative to the state's median wage, men hired at the minimum wage have lower employee-initiated separation hazards than other low-wage workers. As the minimum wage rises relative to the prevailing median wage-that is, as the minimum wage becomes more binding-men hired at the minimum wage are increasingly likely to leave their jobs at any given duration. When the minimum wage is high relative to the median wage we find that men hired at the minimum wage have significantly higher employee-initiated separation hazards than other low-wage workers. We interpret these findings as evidence that while rents may accrue to minimum wage workers, the job matching process is undermined when the minimum wage binds. Our results apply to the men in our sample, but not to the women. Indeed, for women we find no connection between employment duration and the starting wage rate, though we do uncover some evidence that for women in low-wage jobs, employment duration is more elastic with respect to the presence of family-friendly fringe benefits than it is for men.The paper proceeds as follows. The next section explores the possible reasons minimum wages would affect turnover and discusses the existing empirical and theoretical research on this topic. …

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%.

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.

Purpose: This paper examines the impact of minimum wage adjustments on wages and employment dynamics in Albania. Utilizing the standard competitive model, an escalation in the minimum wage is anticipated to lower employment levels. Specifically, the two-sector model suggests that a rise in the minimum wage would decrease employment within the covered sector while potentially increasing it within the uncovered sector, particularly in developing countries where the latter sector holds a substantial portion of employment. Methodology: The research draws on secondary sources, analysing existing literature and previous studies investigating the correlation between minimum wage adjustments and employment levels. Findings have been varied regarding the minimum wage’s impact on employment, with some indicating a decrease in employment levels or an increase in unemployment due to minimum wage hikes. However, studies specifically focusing on Albania are scarce. Data were collected on minimum wage adjustments and unemployment levels from 2017 to 2022 to assess the relationship between minimum wage changes and unemployment rates, aiming to ascertain whether minimum wage regulations have positively influenced unemployment reduction. Findings: Analysis of the collected data reveals a trend in Albania where increases in the minimum wage correlate with decreases in unemployment. Value: This paper recommended that it is necessary for a more in-depth analysis to be made about the impact of occasional changes in the minimum wage level. It is also recommended that the government consult with business analysts and economic experts and with the businesses themselves so that the change in the minimum wage does not negatively affect the economic development of the country. Keywords: minimum wage, employment level, unemployment, analysis.

One of the minimum wage problems is caused by workers/laborers' needing to agree with the wage increase set. The minimum wage increase is still minimal compared to the high worker need. The Labor Organization president called the government to raise the provincial minimum wage (UMP) and district/city minimum wage (UMK) 2024 by 15%. This figure is obtained from the Decent Living Needs (KHL) survey results and other indicators such as inflation and economic growth. On the other hand, the minimum wage increase of 15% is considered by employers to be unrealistic, considering the condition of the national economy is hit by uncertainty. The government said that determining the minimum wage based on PP 36/2021 and considering the welfare of workers/laborers’ also looks at the Company's capabilities. This paper aims to see new macroeconomic and welfare conditions due to the increase in the minimum wage by 15%. Using the general equilibrium model of static computing (CGE), the analysis results show that an increase in the minimum wage leads to a decrease in demand for labor, especially in labor-intensive sectors. The increase in wages impacts increasing household income, thus indicating an increase in household welfare. However, inflationary pressures brought about by the minimum wage increase mask the increase in revenue, resulting in a decrease in household consumption budgets. This translates into a loss of net well-being, with a more significant impact on urban households than rural households. The output of most sectors, especially labor-intensive sectors, declined, but nominal GDP increased. The increase in nominal GDP is due to rising prices, not actual economic output.

Research background: The government of the Czech Republic has agreed to an increase in the minimum monthly wage as of the beginning of 2017 to 11,000 CZK, which represents a year-over-year increase of over 11 %. The government is thus fulfilling its objective set out in February 2014 and stipulated in the Government Statement of Purpose, i.e. to approximate the minimum wage to 40 % of average wages.Purpose of the article: The purpose of the article is to assess the adequacy of the Government Minimum Wage Valorization Policy, in particular from two points of view. Firstly, in view of selected macroeconomic indicators in the Czech Republic ? the development of consumer prices, average gross wages, economic growth and workforce productivity. Secondly, in comparison with other EU member states which have introduced the institution of a minimum wage.Methods: In order to assess the adequacy of government policy to improve the social protection of the rights of the working population, a background research was conducted into the literature of important studies on the effects of minimum wages on unemployment, while the development of average gross wages in the CR, the minimum monthly wages in the CR and the Kaitz index were also analyzed. Furthermore, an evaluation of selected macroeconomic indicators in the Czech Republic was performed by means of time lines and the percentage representation of employees in the individual gross wage bands according to sex and type of economic activity. Last, but not least, a comparison was made of minimum wages, real gross domestic product per capita and workforce productivity in Euros and in purchasing power standards between the Czech Republic and countries which have enacted the institution of minimum wages.Findings and Value added: The minimum wage in the Czech Republic is the fifth lowest in the EU. In the long term, it is earned by approximately 3% of employees, which is less than the rate common in other EU countries. Currently, the amount of the minimum wage is below the threshold of income poverty. In comparison with the GDP per capita in PPS and real labour productivity per person employed in other EU countries, the position of the Czech Republic is significantly better, although other EU countries offer higher minimum wages. The decision of the current government to significantly increase the minimum wage as of 2017 is correct.

Introduction: While the positive correlation between earnings and health outcomes is well-established, little is known about the relationship between minimum wages and health. Even though some counties and municipalities set minimum wages above the federally mandated level, the impact of these higher wages on the health of low wage workers is not clear. Methods: Using the 2019 Selected Metropolitan/Micropolitan Area Risk Trends of the Behavioural Risk Factor Surveillance System this study examines the relationship between the number of chronic disease diagnoses and county-level minimum wages. Since insurance benefits, employment, and chronic disease outcomes are interdependent, and individual health endowments are unobserved, a structural equation modelling framework is used to model complex relationships between the county-level minimum wages and individual health, employment status, insurance, and chronic disease outcomes. Results: Even after controlling for employment, insurance, and age, results indicate higher minimum wages are associated with fewer chronic disease diagnoses. Findings are robust to various model specifications and distributional assumptions. Likely a reflection of their higher chronic disease burden and increased likelihood earning low wage, the impact of wage on chronic disease is greater for Hispanic and African American workers than Whites. Conclusion: Among historically oppressed populations, increases in the federally mandated minimum could improve chronic disease outcomes. Policy makers and labour advocates should consider health-related justifications in their efforts to lobby for higher federal, state, and local minimum wages. Keywords Chronic disease; Minimum wage; Health disparities; Diagnosis

The current study is inspired by inconclusive empirical findings on the impacts of minimum wage on employment. The majority of past studies have concluded that an increase in the minimum wage negatively impacts employment, despite certain scholars discovering either an insignificant or a positive impact. Hence, this study aims to investigate the impact of the Malaysian minimum wage on the employment opportunities of low-skilled workers. The data are collected annually from 1995 to 2020. An autoregressive distributed lag (ARDL) model is employed to examine the impact of the Malaysian minimum wage on the employment of low-skilled workers. The bounds test method and error correction model (ECM) are subsequently utilised to determine both short- and long-term effects. As a result, the employment of low-skilled labour is found to be positively impacted by the minimum wage, with this impact being statistically significant in both the short and long terms. However, when the interaction variables are included, the effect on the employment of low-skilled workers is negative and insignificant. Furthermore, neither increasing labour productivity nor technological advancement significantly altered the impact of the minimum wage on employment.

This paper investigates the impact of the effective minimum wage, defined as the log difference between the minimum and the median wages, on wage inequalities in the OECD countries. Unlike the previous studies that focus on single countries in which the minimum wage has no cross-sectional variation and rely instead on within-country variations of wage distribution across regions or socio-economic characteristics, we use a country panel that allows for both cross-sectional and time-series variations in minimum wage. We also control for more factors than in the previous studies whose absence may cause endogeneity. Our results confirm the previous findings that increases in minimum wage alleviate the wage inequality at the lower tail of the wage distribution, while having little effect at the upper tail. The estimated effect is larger for women than for men, which is consistent with the fact that the share of workers who are directly affected by the changes in minimum wage is bigger among women than men. An application of the IVs of Autor, Manning and Smith (2016) supports the robustness of our findings.

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.