Decrease In Wages Research Articles

Wages in 2024: dynamics, results and the need to develop a fairer wage model

In 2024, Russia saw a noticeable increase in wages in all sectors of the Russian economy, monetary allowances for military personnel and military pensioners, as well as state and municipal employees and other categories of working citizens. The Russian statistical agency already provides an opportunity to analyze the situation with the average monthly nominal accrued wages of employees in a full range of organizations for the first 7 months of 2024. In this article, we set the goal of analyzing the assessment of the dynamics of growth / decrease in wages by federal districts based on official statistical information, and also taking into account the current opinions of scientists and specialists in the social and labor sphere. The study was conducted on the materials of the Central Federal District. Using the statistical analysis method as the main research method, we analyzed the dynamics of the average monthly nominal accrued wages of employees in a full range of organizations by federal districts based on the results of the first half of 2024. Several conclusions have been made, according to which the dynamics of growth of the average monthly nominal accrued wages of employees in a full range of organizations in the Central Federal District in Russia (using the Central Federal District as an example) in 2024 is positive. Positive dynamics also applies to real wages in the first half of 2024. Meanwhile, the need to develop and implement a new wage system announced by the head of state, starting in 2025, which should make it more fair and consistent with the objectives of the state’s economic growth, is also noted.

Environmental shocks and agriculture: implications of floods on labor market outcomes

Abstract Floods often displace people and exacerbate their access to finance, affecting the livelihood of daily wage workers in least-developed countries. In August 2017, Nepal experienced the heaviest rainfall in more than 60 years, severely flooding about 80 per cent of the land in the southern part of the country. Using the two-way fixed effects approach and an event study design, we evaluate the impact of severe flooding on the wages of agricultural workers. We show that the 2017 floods resulted in a 9–10 per cent decrease in cash wages among agricultural households while in-kind wages of agricultural laborers increased significantly after the floods, implying that in-kind wages helped mitigate the adverse effects of floods on cash wages. We also investigate changes in assistance, loan-seeking behavior, loan repayment, and collection behavior as mechanisms leading to the risk-mitigating behavior by farmers.

Türkiye’de Asgari ücretin Makroekonomik Belirleyicileri Üzerine Teorik ve Ampirik bir Analiz

This study aims to comprehensively examine the macroeconomic factors influencing the determination of minimum wage in Turkey from both theoretical and empirical perspectives. The analysis includes variables such as real minimum wage, unionization rates, inflation levels, unemployment rates, real economic growth (GDP), and labor productivity. The findings indicate a positive relationship between unionization rates and the minimum wage, with inflation also leading to an increase in the minimum wage. Conversely, higher unemployment rates are found to decrease the minimum wage, while economic growth positively impacts it. Increased labor productivity, however, is associated with a decrease in the minimum wage. Additionally, dummy variables for crisis periods were not statistically significant. These results highlight the importance of considering various macroeconomic factors in the formulation of minimum wage policies. The outcomes of this study provide valuable insights for policymakers and pave the way for future research. Key Words: Minimum wage, Unemployment, CPI, GDP, ARDL Model. JEL Codes: E1, E24, J3.

Research Note: New Evidence on the Motherhood Wage Penalty

U.S. women's age at first birth has increased substantially. Yet, little research has considered how this changing behavior may have affected the motherhood pay penalty, or the wage decrease with a child's arrival, experienced by the current generation. Using Rounds 1–19 of the National Longitudinal Survey of Youth 1997 (NLSY97), in this research note we examine shifts in hourly pay with childbirth for a cohort of women who became mothers mostly in the 2000s and 2010s. Results from fixed-effects models indicate that the motherhood pay penalty for NLSY97 women who had their first child before their late 20s is generally similar to that of previous cohorts. Those who became mothers near or after age 30, however, encounter a parenthood premium, as men do. The growing proportion of women delaying motherhood, coupled with the rising heterogeneity in motherhood wage outcomes by childbearing timing, contributes to a comparatively small motherhood penalty for this recent cohort. The pay advantage of “late mothers” cannot be explained by factors such as their labor market locations, number of children, stage of childrearing, marital status, or ethnoracial composition. Instead, the hourly gain stems from such mothers’ tendency to reduce working hours more than other mothers without experiencing a commensurate decrease in total pay. Unlike the fatherhood premium, the premium for late mothers does not lead to a real boost in income.

Short-term impact of climate change on labor market in China: Quantitative spatial analysis based on an oligopsony model

Assessing the impact of climate change on the economy is an important issue for designing climate policy. By constructing an oligopsony model to depict the incompleteness of the labor market and using the quantitative spatial model analysis method, we quantitatively estimated the short-term impact of climate change on the labor market in China. Then, to control climate change, the optimal climate change governance intensities (CCGI) of multi-governments satisfying CD preferences and Stackelberg game are designed and solved. The results show that climate change leads to a decrease in wages and labor supply in labor market equilibrium and a loss of market aggregate income and labor scale. Climate change has led to a shift in labor from the agricultural and dirty sectors to the clean sector. The regional labor distribution is also being “disrupted” due to climate change. Moreover, declining migration costs and increased subsidies help to reduce the negative impacts of climate change. The optimal CCGI of the central government is higher than that of the provincial government. The optimal CCGI is higher in the eastern provinces than in the central and western regions. Implementing CCGI would mitigate the negative climate change shocks to the labor market in China and increase welfare. The conclusions of this paper provide strong support for preventing climate change risks and actively participating in global climate change governance.

The impacts of extreme heat on wage losses: Evidence from the Chinese agri‐food industry

AbstractThis paper investigates the effects of extremely high temperatures on wage losses for workers in the Chinese agri‐food industry. Our estimated results suggest extreme heat is associated with a decrease in worker wages, and that these welfare losses could be attributed to the adverse impacts of extremely hot days on worker productivity. We also observe that, compared to male workers, female workers are more likely to bear wage losses when exposed to extremely hot weather. Furthermore, workers in private firms may experience more wage losses due to extremely hot days than those in other ownership types. Regarding the industry‐level heterogeneity analysis, we find that wage losses in the agri‐food manufacturing industry are more severe than those in the agri‐food processing industry, while no significant wage losses are observed in the beverages and alcohol industry. In the long term, wage losses induced by climate change are projected to rise by 10.93% under RCP8.5, if no extra adaptation actions are implemented. [EconLit Citations: O13, P46, Q54]

Влияние безработицы на уровень оплаты труда и прибыль

This work is devoted to an attempt to study the nature of the impact of unemployment on the level of wages and profits of enterprises. Based on Rosstat data on the unemployment rate, the average monthly nominal accrued wages of employees of organizations and the profitability of assets of industrial enterprises in the regions of the country, correlations of unemployment identified and linear regression models of these connections built. It been established that with a high level of unemployment, an increase in unemployment contributes to a decrease in wages; this influence is very small. At a low level of unemployment, starting from a level of less than 7–8%, the impact of unemployment on the level of wages begins to grow as the unemployment rate decreases until it reaches a value of 42–45% of the level of explanation of wages by the level of unemployment. This level of explanation observed at an unemployment rate of no more than 3–3.5%. If the unemployment rate does not exceed 3–3.5%, the degree of influence of unemployment on wages stabilizes and the decrease in unemployment determines the increase in wages by no more than 42–45%. Thus, the ideas about the wage curve and the Phillips curve are very simplified and do not reflect the complex nature of the influence of the unemployment level on wages. With a high level of unemployment, the growth of unemployment contributes to a decrease in the profitability of assets and, consequently, the profits of industrial enterprises. With an unemployment rate of no more than 4%, an increase in unemployment contributes to an increase in the profitability of assets and, consequently, the profits of industrial enterprises. Consequently, the idea that rising unemployment causes declining profits is overly simplistic and partly erroneous.

Deconstructing the nexus between the influx of Rohingya refugees and the economy (Labor) in Cox’s Bazar, Bangladesh

Over the past decade, refugee crises have dominated the headlines of social media on a daily basis. Millions of individuals have left their homes in pursuit of safety and a promising future. Examples like the Syrian civil conflict and the Rohingya exodus to Bangladesh stand out, and the number of such instances is exponentially increasing around the world. The latest addition to this crisis is the Ukraine-Russia war (February 2022), which has already displaced 14 million Ukrainian people. Different countries have hosted a large number of refugees, but this often brings about a very negative impact on the host communities. Various socio-economic and political crises arise due to the influx of refugees. This study focuses on the Rohingya refugees who have fled from Myanmar to Bangladesh. Given their influx to Bangladesh, a developing and overcrowded country, the host community faces innumerable problems. In addition, this study explores other aspects especially, the labor market. Rohingya refugees receive support from donor organizations. Therefore, there is a question to ask. How do the refugees influence the economy of the host country? This study aims to find answers to this unexplored question. After the arrival of the Rohingya, this labor market has shrunk for local Bangladeshi women in the study area. The majority of impoverished women work roughly 3/4 of an hour in a particular household. Their daily earnings are less than $1 while they work on domestic chores. Thousands of national and foreign staff live in those areas that have brought a dramatic change in housing patterns. The influx of refugees also led to a decrease in wages and employment prospects for another segment of the Bangladeshi population, identified as the economically disadvantaged group.

The crowding-out effect of the environmental regulation on corporate sustainability

The analysis of the impact of China’s Environmental Protection Tax (EPT) Law on company environmental, social, and corporate governance (ESG) performance is crucial for a more comprehensive understanding of the EPT Law and to improve corporate practices. Using a difference-in-differences (DID) model with a research sample of 7,055 listed firms in China from 2012 to 2020, we found that the EPT Law significantly improved firms’ overall ESG performance. However, this improvement was mainly driven by significant increases in the environmental (E) score. In contrast, the social (S) score declined significantly after the implementation of the EPT Law, indicating a trade-off between environmental regulation and social responsibility. Further analysis also reveals that the increase in production costs, which led to a decrease in employment and wages, is responsible for the crowding-out of social responsibility. This study not only enhances our understanding of the impacts of environmental regulations on companies but also offers guidelines for policymakers to consider the negative externality of policies, which could serve as a “double-edged sword.”

ІНВЕСТИЦІЇ В РОЗВИТОК ЛЮДСЬКОГО КАПІТАЛУ У СІЛЬСЬКОМУ ГОСПОДАРСТВІ УКРАЇНИ

The purpose of the article is to analyse the importance of investing in human capital development in Ukrainian agriculture in the context of instability. The elements of the process of human capital development for agriculture are allocated, which reveal the directions necessary to improve the quality of human capital and increase the productivity of the agricultural sector. These are elements such as providing access to quality agricultural education for young people, organising training and courses, training farmers in the use of modern digital technologies, creating financial support programs for farmers, providing access to medical care and insurance programs, developing social programs to make life easier, training in resource management, developing projects and programs to improve the economic and social development of local communities, promoting and educating in the context of environmental awareness in the agricultural sector. The problems that cause low growth of human capital in agriculture in Ukraine are highlighted: instability of the military, economic and political situation, low wages and social conditions, reduced educational and professional opportunities, infrastructure and technological development, demographic and migration challenges, lack of support and investment in agricultural development. The problems that affected the process of investing in human capital development in agriculture in Ukraine during the wartime period are highlighted: an unstable situation in the country and security threat, loss of access to educational resources and exacerbation of problems in education, decrease in economic activity and decrease in income, decrease in wages, mass migration of the population from rural areas to cities and other countries, loss of qualified personnel, destruction of infrastructure, insufficient state support and development programs for rural areas. The article proposes areas of support for human capital development in the context of agricultural development in Ukraine, including security and stability, skills development, financial support, social support, efficient use of labour, resource management, productivity and technology development, and infrastructure projects.

ГОСУДАРСТВЕННОЕ УПРАВЛЕНИЕ СОЦИАЛЬНОЙ БЕЗОПАСНОСТЬЮ В АГРОТУРИСТСКИХ РЕГИОНАХ РОССИИ

The purpose of the study is to develop the state management of security in the social sphere of the regions of the Russian Federation, in which agricultural enterprises operate in the field of agrotourism. The paper investigates the concepts of rural tourism (agrotourism) and social security. Rural tourism (agrotourism) is a set of different types of activities in rural areas for the purpose of health improvement, recreation and gaining new experience and knowledge. Social security is a set of various factors and conditions that ensure the preservation and development of the social sphere, its safe interaction with the external and internal environment. The relevance of the study is proved by the formation of internal development on the territory of the state, which affects the increase in the socio-economic potential of subjects. The study used data from the information agency «Integrum» and the collection «Regions of Russia. Socio-economic indicators. Based on scientific literature, the state of rural tourism development was analyzed, as well as the methodologies for assessing the social security of the region (the methodology of N. V. Kocheryagina was taken as a basis).The period of the study is 2016–2020. In the course of the study, the analysis was carried out by the organizational and legal form of enterprises in different regions of the Russian Federation in the agricultural industry. Peasant farms operate in almost all subjects of the Russian Federation, which indicates the popularity of this organizational-legal form. Subsequently, we selected the subjects with the largest number of registered enterprises by the studied organizational-legal forms. Thus, eight regions were selected for which social security was analyzed. The study of social security revealed threats in various spheres of the social system of the region. We can note such threats as natural population decline, decrease in migration flow, low wages and pensions of the population, decrease in the number of students in higher and specialized secondary education programs, decrease in employment of the population. The state policy for the development of rural tourism (agrotourism) can help neutralize the identified threats.

Downward minimum wage rigidity: Evidence from a temporary four-month increase in St. Louis

A legislative dispute between the city of St. Louis and the Missouri state government presents a unique opportunity to measure downward wage rigidity in the low-skill labor market. The dispute caused the minimum wage in St. Louis to fall in August 2017 after having risen by 30 percent four months earlier. In this first study of a nominal minimum wage decrease, I evaluate whether firms have a tendency to maintain existing pay levels even when they likely exceed the competitive rate. Analyzing wage trajectories in St. Louis after the minimum wage cut using synthetic controls and a regression analysis, I find that about 3.6 percentage points more workers in the area than we would otherwise expect earn above the statewide minimum wage a year later, and the 5th percentile of wages is about 80 cents higher. Anecdotal evidence is consistent with the interpretation that norms regarding fairness motivated firms to avoid wage cuts. Although I do not observe a decline in hours worked for teenagers or individuals with less than a high school degree, there is some evidence that teenage employment declines. Firms with dynamic expectations regarding a future minimum wage increase may have been particularly willing to maintain higher wages in the near term to avoid paying the costs of taking away a raise they might eventually have to grant anyway.

The uneven impacts of climate change on China's labor productivity and economy

Climate change is considered to increase economic costs by worsening heat-related labor productivity loss. While extensive global and national research has been conducted on this topic, few studies have analyzed subnational and individual economic impacts, potentially weakening local governments’ motivation to tackle climate change. Figuring out the most affected regions and labors could help climate policymakers to identify priority regions and sectors to allocate adaptation resources efficiently, and enhance stakeholder engagement. This study adopted a provincial Computable General Equilibrium model by distinguishing different labors and regions in modelling work to address the aforementioned gap. The study estimated economic costs at different level under three climate change scenarios (lower (SSP126), middle (SSP245), and higher (SSP585) warming scenario). Low-income regions located in southwest part of China (such as Guangxi and Guizhou), would experience the largest economic loss, 3.4–7.1 times higher than high-income in China by 2100 under SSP245 scenario. Additionally, wages for labors highly sensitive to heat in these regions are expected to rise, for example, by an 8.3% rise in Guangxi, driven by the rising demand for these labors. Conversely, others would experience a significant wage decrease, especially those with less sensitivity (e.g., managers). Therefore, we recommended that national financial supports be allocated more to these most affected regions and that government encourage managers provide assistance to workers vulnerable to heat.

Unveiling The Impact of Technological Advancements on Macroeconomic Stability and Labor Market Dynamics

The rapid development of information and communication technology has an impact on economic growth that is increasingly varied. Economic stability is a basic prerequisite for achieving improvements in people's welfare through high growth and improved growth quality. In line with that, technological progress also has a significant impact on the dynamics of the labor market. The labor market has a mutual relationship between companies and labor. If developing countries want to achieve higher economic development, they must increase trade and physical capital with a stable macroeconomic environment. But on the other hand, technology automatically leads to a decrease in employment and wages. This changes the relative demand for jobs.

New Role, New Paycheck: The Impact on Women's Wages When Becoming a Caregiver for an Aging Parent.

Objectives: While prior research demonstrates the negative impacts of adult caregiving on women's employment, less research examines how women's employment changes when beginning a new caregiving role. Methods: Using data from eight waves of the Health and Retirement Study (2004-2018), I examine changes in women's employment when first transitioning into parental caregiving between the ages of 50-60, by analyzing changes in labor force participation, work hours, and hourly wages. Results: The transition into parental caregiving was not associated with women exiting the workforce or decreasing their work hours. However, caregivers did experience a decrease in inflation-adjusted hourly wages compared to non-caregivers, with the greatest wage penalties associated with high-intensity caregiving situations. Conclusion: Results demonstrate how parental caregiving may act as a shock to women's financial health at a critical career stage. This study highlights the less visible, but detrimental, financial consequences women experience when taking on a family caregiving role.

Peculiarities of payment of local taxes by enterprises during the legal regime of martial law

In the conditions of war, special attention is paid to the strengthening of public administration and local self-government in order to strengthen the state in order to provide a powerful repulse to the enemy and the possibility of restoring the economy of Ukraine. The development of local self-government is particularly important as it encourages the creation of a full-fledged living environment for citizens, the provision of high-quality and accessible public services, the establishment of institutions of direct people’s power, and the coordination of the interests of the state and territorial communities. The basis of the development of local self-government is the formation of local budgets, which today have significantly decreased due to the decrease in the number of the population, bankruptcy of private enterprises, etc. It should be noted that today the economic activity of business has decreased by 50 percent, and about 8 million Ukrainians are abroad. A large number of Ukrainian citizens became internal migrants. The damage caused by missile attacks to our infrastructural facilities exceeded 40 billion dollars. Each missile attack worsens the financial results of entrepreneurs, causing a decrease in earnings, a decrease in wages for employees, along with this, and tax revenues. That is why the main task for the development of territorial communities is the implementation of effective reforms that will make it possible to increase the resource and financial base.
 It was noted that the liberalization of taxation during the war is a forced anti-crisis measure. Lowering the rates of excise tax, value added tax, introduction of a single tax of 2% for virtually all enterprises, easing of the administrative burden on taxpayers, deregulation of business and loosening of tax control helped business survive the shock. These measures helped enterprises to focus on personnel problems, readjust business to extreme working conditions, search for new opportunities for recovery and adjustment of production. They did not deal with the issues of finding resources and means for calculating and paying taxes. While the introduced changes are temporary and short-lived, they will cease after the end of the war and the stabilization of the situation. That is why, after the recovery of business activity and reduction of the unemployment rate, the state should return to the permanent post-crisis model of taxation.

Who pays for environmental protection? The impact of green tax reform on labor share in China

To cope with increasing environmental pollution, the Chinese government has introduced a nationwide Environmental Protection Tax Law (EPTL) policy, which encourages enterprises to step up pollution control efforts and optimize their production decisions. However, the “green cost” generated by the EPTL policy has received less attention in existing research. Based on the manually collected data on China's listed companies during 2013–2020, this paper innovatively calculates the substitution elasticity of green capital to labor. By regarding the EPTL policy as a quasi-natural experiment, the difference-in-difference (DID) model and other causal identification methods are further adopted to examine the real effect and influencing mechanism of green tax reform on labor share. The results indicate that the EPTL policy significantly reduces the labor share through two influencing paths: promoting green capital and squeezing out low-skilled labor. This finding demonstrates that the EPTL policy leads to green capital gains and human capital losses, and it is mainly low-skilled labor in enterprises that “pay for” environmental policy shocks. By decomposing the labor share, we find that the EPTL policy leads to a decrease in employees' average wages and an increase in labor productivity, which indirectly proves the rationality of the two mechanisms. Further analysis reveals that in capital-intensive and growth enterprises, and in enterprises that did not receive green subsidies from the government, the decrease in labor share caused by the EPTL policy is more pronounced. Finally, this paper proposes targeted policy recommendations for governments seeking to balance national welfare and green development.

Реформування оплати праці працівників бюджетної сфери в Україні

Socio-economic instability in Ukraine is accompanied by contradictions in payments to employees, which negatively affects work efficiency and motivation. Moreover, the issue of remuneration in the public sector is the most urgent for the country, since the principles of its financing mainly at the expense of the budget, and the imperfection of its formation mechanisms are the reasons for the lack of correlation between the qualifications of employees and the level of remuneration, the increase in poverty among employees, and other negative consequences. The above prioritizes the substantiation of the theoretical and methodological tasks of reforming the system of public employees remuneration. The purpose of the article is to identify deficiencies in the remuneration of public sector employees in Ukraine and to improve the system and mechanisms of employee remuneration in the public sector. The research was carried out using the following methods: analysis and synthesis, comparison, generalization, analogies. An abstract-logical approach was used to formulate the conclusions. It is stated that at present three systems of wages financing exist in the country for employees whose wages are paid with funds from the state budget (on the basis of YeTS [unified pay rate system], on the basis of the provisions of special laws and decrees as well as the combined system existing in the healthcare as a result of its reformation) which may create additional risks as relates to limitations of wage levels and therefore increased shadow employment in the private sector. Negative factors in relation to wages at the government-financed organizations are determined, namely no correlation between wages of most employees in this sphere and their performance and quality of services which they provide, continuous decrease in wages, disproportions in wage levels of employees with the same qualifications which all lead to risks of qualified personnel outflow into other sectors of economy and further limitation of provided services’ quality in the longer run. Risk minimization tools are proposed for the specific risks in the government-financed organizations wages system which are based on optimization of existing network of state budget funds recipients (streamlining and improvement first and foremost of the network of educational and medical institutions financed by the state) and transition toward a semi-autonomous model (which will allow government-financed organizations and institutions to independently attract additional funding and spend it on their own needs which would stimulate further development) as well as awarding to the government-financed organizations and institutions the right to place currently unused funds at commercial banks which would generate an additional revenue. Also the conceptual basis for creating a results-based wages system financed from the state budget is developed which includes tools and principles of its formation and formation of its elements, determines its functions and establishes a favourable motivational environment which will ensure adequate remuneration of government financed organizations’ employees for their work as well as actively stimulate them toward achieving better results of the work and fulfillment of the organizational goals.

Decent wages as a basis for socially responsible business practices in the new economy

The article examines the conceptual foundations and significance of decent wages as a priority area for implementing socially responsible practices of business organizations. The study substantiates the actual role of this concept in the new business realities, the key trends of which are openness, networking, digitalization and globalization of processes. The purpose of the study is to determine the role of the concept of decent wages in the process of implementing socially responsible practices of a company. When studying theoretical approaches to the role of the concept of decent wages in ensuring the sustainability of business organizations, the author's vision on the value and practical significance of these processes has been formed. The author's own understanding of the relevance of these practices for business and society is determined. The potential opportunities for business organizations in the active application of socially responsible approaches to business activities are outlined and supplemented. Priority directions for strengthening the motivating role of the remuneration system in business organizations are identified. The study substantiates the proposal to reduce the fixed part of wages and increase the variable part, which will accordingly develop the ability of employees who are willing and able to earn money to perform work with greater efficiency. The idea that business entities should increase the share of labor remuneration in the cost of production and increase the amount of real wages has been developed. Since a decrease in real wages will also affect business organizations, with a decrease in the purchasing power of the population, sales volumes will decrease, and income and profits will decrease.

Job Search, Spatial Constraints, and Unemployment Duration: An Empirical Analysis of the Cameroonian Case

The individual transition from unemployment to employment is conditioned by various elements. If some of them concern directly the individual characteristics of workers, while others implicate indeed their environment when searching for a job. The residential location, housing status, and high travel distances to each labor market area are factors that can influence the exit rate of unemployment. This paper aims to integrate, in a job search model with endogenous intensity, the spatial horizon of prospecting. This horizon is introduced through the prospecting distance, which influences both the arrival rate of offers and the search costs. The equilibrium properties of the model lead to an indeterminate effect of the prospecting distance on the unemployment duration. The micro econometric estimation of the structural model allows us to deal with this ambiguity. The method adopted takes into account not only the selection rule on access to employment but also the endogeneity of the choice of spatial mobility. Results highlight that the exit from unemployment is shorter as the prospecting distance increases, but the increase in this prospecting distance does not lead to a decrease in the reserve wage.