Rise In Wages Research Articles

On foreign-invested enterprises’ exit: Economic development or labor market price regulation?

We use the prefecture-level panel data and enterprise-level data of China's manufacturing enterprises from 2001 to 2009 to investigate the effects of economic development and minimum wage policy on foreign-invested enterprises' exit behavior. The increase of local minimum wage from the 25th percentile to the 75th percentile accounts for 20% of the average exit rate of foreign-invested manufacturing enterprises, while the local economic development does not affect the exit of foreign-invested manufacturing enterprises. Compared with “market-oriented” foreign-invested enterprises, “cost-saving-oriented” foreign-invested enterprises are more likely to exit from the market owing to the rise of minimum wage. Enterprises in industries with high labor intensity, large scales, low average wages, relatively high proportions of low-skilled labor, fierce competition, and poor industrial supporting facilities are more likely to be negatively affected by the rise of minimum wages.

What is liberal about Adam Smith's “liberal plan”?

AbstractBy the middle of the eighteenth century the word “liberal” had had multiple non‐political meanings. Adam Smith famously advances “the liberal plan” of political economy. InThe Wealth of Nationshe indicates several ways that his liberal plan is “liberal” in a non‐political sense. The liberal plan leads to economic growth, which leads to a rise in real wages and population through an extending division of labor. The liberal plan facilitates market integration, leading toward a distribution of food supplies that could be called liberal and generous if it was brought about by design of a distributor. The liberal plan entails a generous view of the person that dignifies the mundane and elevates ordinary work. Considering ways that Smith's liberal plan is “liberal” shines light on the soul of classical liberal political economy.

Rate of Profit, Wages, and Crisis A Marxist Perspective of The Theory of Crisis

The goal of this paper is two-fold. First, the paper aims to discuss Karl Marx’s theory of the falling rate of profit and the alternate, probably inconsistent, Marxian theory of crisis based on the rise of wages. Second, the paper examines the relevance of these theories in our days by reviewing important literature on both classical and neoclassical analysis of crisis. A thorough review of literature revealed that Marx’s focus was to provide a real science that explains the phenomena of recurrent crisis in the capitalist society, as opposed to explaining specific incidents that triggers a certain crisis. Marx viewed the capitalist crisis as an endogenous function to the capitalist society itself

How the Population Inflow Influence Guangdong's Economy and Mechanism Study

This study observed the relationship and predictability of population inflow, industrial development, and per capita wage in Guangdong Province from 1998 to 2020. Firstly, the research makes the variables stable, establishes the VAR model, and tests the stability of the model. And then the research uses the Granger causality test to evaluate the relationship among population inflow, per capita wage, and GDP. It shows that under the 5% confidence level, on the one hand, per capita wage has a significant impact on the gross industrial value, and the gross industrial value has a significant impact on population inflow. On the other hand, per capita wage and population inflow have a direct impact on each other. The results of impulse response function and variance decomposition analysis show that the rise of wages will promote industrial development, and the total industrial value will lead to the rise of population inflow, but the impact is not significant over time. Wages have a direct impact on population mobility and population mobility fluctuates greatly over time. The results show that per capita wage, gross industrial value, and population inflow play a significant role in promoting each other and forming a positive cycle. Promoting population inflow will help greatly promote prosperous economic development.

The Stalled Gender Revolution and the Rise of Top Earnings in the United States, 1980 to 2017

The steep rise of top wages is acknowledged as one of the main drivers of the rise in earnings inequality between workers in most postindustrial labor markets. Yet its relation to gender stratification, in particular to the stagnation in the gender pay gap, has received very little scholarly attention. Using data from the U.S. Current Population Survey, conducted between 1980 and 2017, we provide evidence of the enormous weight that the dynamic at the top of the earnings distribution exerts on the gender pay gap. We also show how this dynamic inhibits the consequences of the countervailing process of gender vertical desegregation. Although developments in gender inequality and in the rise of top wages have drawn extensive scholarly attention and have even penetrated into the public discourse in recent years, the two dimensions of inequality are often perceived as unrelated to one another. Our findings, then, highlight the connection between different forms of inequality—class inequality and gender inequality—a relation that demands much more attention in the new economy.

PENGARUH JUMLAH PENDUDUK, TENAGA KERJA DAN INFLASI TERHADAP PERTUMBUHAN EKONOMI DI KABUPATEN BANYUWANGI

The factors that can be used to determine the ups and downs of economic growth are land and the natural resources in it, the population and the quality of the population and labor, the availability of capital goods and the level of technology used, the state of the social system and community behavior (Sukirno, 2013). ). If the population increases, it will certainly increase per capita income accompanied by an increase in the number of workers. Higher inflation will also cause domestic food prices to rise. This is the driving force behind the rise in wages in the industrial sector so that companies increase production costs. The author conducted a series of research activities to see how the influence of population, labor and inflation on economic growth in Banyuwangi Regency. The final result contained in this study is that partially the population has a significant negative effect on economic growth, in contrast to labor and inflation, the results of which do not significantly affect economic growth. However, with the results of simultaneous testing which shows that the variables of population, labor and inflation have no effect on economic growth.

An Insight into Wage Dynamics and Inequality Scenario under Changing Landscape of Rural India

This article examined the level and recent trends in rural wages, the extent of the wage gap and inequality across the states in agriculture. Recent trends showed a continuous and persistent rise in real wages for agricultural and non-farm activities in rural areas. Inequality in wage rate was lower among diverse agricultural operations within and across the year(s). Regression analysis indicated that the wage rate was agriculture was positively influenced by productivity, period and labour availability. Effective implementation of minimum wage law and equal pay for work of equal value would reduce the wage gap and inequality.

The Amendment of the Wage-Fund Theory and the Legalization of British Trade Unions in 1871

Before the Trade Union Act 1871 the legal position of trade unions in the United Kingdom was at best ambiguous, as in many ways they remained outside the law. At the same time, Political Economy maintained that, given a country’s stock of capital and the population of workers, any rise in wages would undermine profits and accumulation. This provided the rationale for politicians and industrialists to argue that wages were not negotiable and that collective action was illegitimate. In reviewing William Thornton’s defence of workers’ right to claim higher wages, John Stuart Mill accepted that the denial of the positive effect of trade unions on wages ‘is deprived of its scientific foundation’. Using evidence from debates in the Royal Commission on Trade Unions, 1867-69, this article examines the extent to which Mill’s acceptance of the economic argument in favour of trade-union collective action contributed to improving the legal status and role of unions in wage bargaining and to change in industrial relations.

Unemployment Problem and Global Financing Related to COVID-19 Epidemic

The COVID-19 epidemic has caused a serious economic fluctuation in the World. One of the leading reasons behind this great impact is the lack of an evident authority concerned with the management of global economy. That has caused the already existing unemployment problem reaching to new critical levels. COVID-19 has also created a perception that, local governments will get stronger following the epidemic. However, almost all governments in the World are currently dealing with the unemployment problem that has become more severe. Definitely, it seems that all governments have their own methods to deal with the growing unemployment issue triggered by COVID-19 epidemic. This paper argues that, passive methods to eliminate the unemployment problem through COVID-19 epidemic such as incentives, benefits, aids and unemployment insurance are not completely correct techniques. The reason is that, we believe such methods bring a great burden on national budgets and they are also temporary short-term solutions. This study puts forward that, active methods aimed at the long-run should be implemented in order to solve the unemployment problem permanently. Also, efficiency based wage rise policies must be adopted for the welfare of economy, employees and employers. Absolutely, the COVID-19 epidemic has proved us that, healthy and safe working environments are a must for the employees. In fact, this factor is expected to become more important in the post-COVID-19 era.

Associations between state scope of practice laws and US physician assistant wages from 1997 to 2017: a longitudinal analysis

ObjectiveThe purpose of this study is to determine whether, and to what degree, variations in physician assistant (PA) state scope of practice (SOP) laws across states are associated with (1)...

RAISING THE MINIMUM WAGE OF THE US WORKFORCE

“The Lawrence Textile Strike, also known as the Bread and Roses Strike”, prompted the first minimum wage law in the United States in 1912. Various states followed suit over the next two decades, and in 1938, at the height of the Great Depression, Congress passed the Fair Labor Standards Act, which created a federal minimum wage (FLSA).The basic incentive behind the introduction of the Act was to reduce income inequality.A rise in minimum wage acts as a form of relocation of wealth from higher-income people to lower-income people. In principle, Congress amends the FLSA on a regular basis to raise the federal minimum wage to levels necessary for even the lowest-paying workforces in the economy.It also aims to help low-wage workers benefit from overall economywide advances in living standards. However, this has historically not always been the case. In 1968, The Poor People’s 1 Campaign started because of not raising the minimum wage to sufficient levels . The explicit purpose of the federal minimum wage is to help increase consumer purchasing power which stimulates the economy and to keep America's workforces out of poverty.However,the law failed to include the automatic cost of living adjustments and led to inflation eroding the real value of the minimum wage over time. There is a dire need for legislative action to raise the nation’s wage floor, more so than ever during the COVID-19 pandemic.Unless consumer's purchasing power is increased,it will be difficult to come out of this recession.Further,the minimum wage is a direct concern for poverty levels and gender / racial inequality.This paper aims to analyze previous work on the issue and provide further recommendations for the same.

Minimum Wage Effects on the Wage Distribution in South Korea

This paper examines whether an increase in the minimum wage reduces wage gaps in Korea. To address the issue, we use a panel regression for wage percentiles with data by Survey on Labor Conditions by Employment Type, which covers from 2009 to 2018. Through the panel regression, we find that an increase in the minimum wage contributes to compressing the wage distribution within an industry and at aggregate level, especially below the median wage. Further, we observe evidence that a rise in the minimum wage also leads to the wage compression across industries at a given percentile below the median wage.

The Mediating Role of Labour Supply in the Relationship between Wage and Fertility for Ghanaian Women. A Marginal Mediation Analysis Approach.

This study explored the effect of wage on fertility rate for Ghanaian women with labour supply as a mediating variable. Using data from GLSS 6, it employed the Marginal Mediation Analysis, which combined average marginal effect and appropriate estimation techniques, to decompose the total effect into direct and indirect effects. Endogeneity was inherent in the mediation model and therefore respondents’ belongingness to a trade union was used as an instrument for wage to correct for the anomaly. Two different instrumental variable estimation methods, namely the two stage least squares (2SLS) and the two stage residual inclusion (2SRI), were used after which the average marginal effects of the estimated coefficients were computed. The 2SLS was appropriate for the equation which had labour supply (hours of work) as its dependent variable because the regressand is a continuous variable. In contrast, the equations whose dependent variable was number of children were estimated by the 2SRI due to the nonlinearity of their measured variable. It was revealed that a percentage increase in wage directly reduces the number of children per woman by 0.85. Also, a percentage rise in wage decreases the number of children per woman by 0.016 through labour supply. Thus empowering women in terms of both their earnings and job opportunities on the labour market is effective in combating high fertility rate among Ghanaian women. The more lucrative the job market is, the greater the opportunity cost of home production activities and hence fertility rate will drop.

Reshoring: An Overview, Recent Trends, and Predictions for the Future

With the rise of globalization beginning in the 20th century, came the inevitable rise of offshoring — companies moving at least some parts of their operations abroad in order to cut costs and increase profits. In recent years, however, international developments, such as the rise of wages in what were typically considered low-cost countries, coupled with uncertainties created through global political tensions, have incentivized companies to move their operations back to their respective home countries or to make new investments in United States-based facilities. This phenomenon, known as reshoring, has only increased in 2020 and 2021, amidst US - China tensions and the COVID-19 pandemic. Reshoring is growing in popularity particularly among companies based in the United States. In May 2021, for example, a US solar energy systems manufacturer called GAF Energy announced that the company would relocate its operations from Asia to Silicon Valley, expecting to add 400 jobs in research, engineering, and manufacturing roles (Szal, 2021). Around the same time, cycle and treadmill machine maker Peloton announced that it would invest $400 million to build its first US-based factory, citing heightened demand and the pandemic highlighting uncertainties that come with its global supply chain (Thomas, 2021). The company, which has announced that the US factory will be based in Troy Township, Ohio, stated that it expects to create over 2,000 jobs in the area. Also, in May 2021, Ford Motor announced a joint venture with South Korean battery maker SK Innovation to manufacture battery cells for electric vehicles in the United States (Wayland, 2021). The venture will be based in the US, marking a significant decision for Ford Motor, which operates worldwide and has notably been in the press in recent years for its decisions to offshore operations. Though an increasingly important and growing phenomenon, reshoring has not been studied nearly as much as offshoring. Experts predict that reshoring will only continue to increase as global supply chain uncertainties get revealed through political tensions and fallout from the pandemic. As companies gain a deeper understanding of the vulnerabilities in offshoring their production, they will become more incentivized to invest in their home country-based facilities. As such, it is more important than ever to understand reshoring, the reasons behind why companies decide to reshore, the recent trends among companies moving operations back home, and predictions about how reshoring is likely to evolve in years to come. This paper offers an overview of the aforementioned points, specifically focusing on companies based in the US, which are some of the more likely companies to make the decision to offshore and subsequently reshore.

METHODOLOGICAL PRINCIPLES OF ELEMENT AND INTEGRATED ASSESSMENT OF PUBLIC TRUST LEVEL IN THE FINANCIAL SECTOR

The article argues that the effective and coherent functioning of the financial sector requires public trust at all levels. In this regard, it is important to provide a thorough methodological basis that will be the cornerstone of an element-by-element and integrated assessment of the level of public trust in the financial sector of the economy. Much of the previous research on calculating the level of trust in the financial sector has been qualitative. Examining the existing approaches to calculating the level of trust in the financial sector of the economy, qualitative and quantitative indicators that are best to describe, influence, or characterize public trust in the financial sector have been identified. Using multivariate factor analysis based on the principal components method, all quantitative and qualitative indicators were grouped into three factors that characterize the formation of trust/distrust in (1) monetary authority and the monetary policy sequence of the central bank (macro-level); (2) financial services and products (micro-level); (3) financial institutions (meso-level). Based on the identified factor loads, the indicators of the balance of trust/distrust in the financial sector at the macro, meso, and micro levels, as well as the integrated indicator of the balance of trust/distrust in the financial sector of the economy for 2010-2020 have been developed and calculated. The calculated integrated indicator of the balance of trust/distrust in the financial sector had been negative during the analyzed period and ranged from -22.82 to -49.80%, indicating a chronic crisis of public trust in Ukraine. According to the obtained values of both element-by-element and integrated indicators, the aggravation of the trust crisis in the financial sector at all levels of its manifestation occurred in 2014, which coincides with the general trend of changes in socio-economic and financial condition. It is determined that the decline in dollarization has been found to indicate a return to public trust in the financial sector at the macro level. In contrast, an increase in the optimistic consumer sentiment and a decrease in cash outside the financial system accompanied by wages rise has been found as evidence of renewed trust in the financial sector at the meso and micro levels, respectively. The findings of this study have several important implications for financial policy improvement.

What's Liberal About Adam Smith's Liberal Plan?

By the middle of the eighteenth century the word “liberal” had had multiple non-political meanings. Adam Smith famously advances “the liberal plan” of political economy. In The Wealth of Nations he indicates several ways that his liberal plan is “liberal” in a non-political sense. The liberal plan leads to economic growth, which, through extending the division of labor, leads to a rise in real wages and population. The liberal plan facilitates market integration, leading towards a distribution of food supplies that could be called liberal and generous if it was brought about by design of a distributor. Smith’s advocacy of the liberal plan evidences his own liberality. It expresses his generous view of the person that dignifies the mundane and looks to enfranchise the previously marginalized. Considering ways in which Smith’s liberal plan is “liberal” shines light on the soul of classical liberal political economy.

Wage distortion and green technological progress: A directed technological progress perspective

In this paper, we construct a theoretical model considering that wage distortion is exogenous and endogenous, respectively, to explore the effect of wage distortion on green technological progress. Furthermore, using the panel data of China's industrial sector, we investigate the direct influence and mediating effect of wage distortion on green technological progress. We find that the green technological progress of China's industrial sector continued to rise from 2002 to 2012. However, the green technological progress of China's manufacturing sub-sectors is relatively slow. The wage distortion phenomenon that the labor's real wage level is less than the labor's marginal product level is widespread, especially in manufacturing sub-sectors. Moreover, green technological progress has a path-dependence characteristic. Wage distortion plays an important role in the changes in the direction of green technological progress. Green technological progress is more likely to appear in the sub-sectors which experience low wage distortion degree, while the sub-sectors with severe wage distortion experience a lower green technological progress rate. Wage distortion increases industrial profit margins by deliberately suppressing the rise of wages. In addition, increased industrial profit margins reduce the incentives of the green technological innovation of equipment suppliers and inhibit the improvement in green production technology. Therefore, alleviating wage distortion can benefit the green development of industrial sector.

Labor market dynamics and the migration behavior of married couples

Between 1964 and 2000, the intercounty migration rate of married couples declined by 15%. Concurrently, female labor force participation and the relative wages of women increased. In 1964, 36% of married households had both spouses in the labor force and women earned only 50% of the wages of men. Over the following 36 years, the fraction of dual earner households increased to 75% and women's earnings rose to 64% of men's. Using a two location household level search model of the labor market, we show that both the increase in dual earner households and the rise in women's wages contributed significantly to the decline in the migration rate of married households, with each explaining 55% and 16% of the decline, respectively. In addition, we show that the co-location problem has important implications for estimates of lifetime earnings inequality.

Moving Beyond Lewis: Employment and Wage Trends in China\u2019s High- and Low-Skilled Industries and the Emergence of an Era of Polarization

One of the defining features of China’s economy over the two decades between 1995 and 2015 was the persistent rise of wages for workers and professionals in nearly every segment of the economy—with wage rates for labor-intensive jobs in manufacturing, construction, and the informal service sector rising the fastest. Recently, however, the economic environment in China has begun to change, including changes in both employment and wages. We identify recent employment/wage trends throughout China’s economy and postulate the sources of these trends as well as possible future consequences if they continue. We use official, nationally aggregated data to examine employment and wages in multiple sectors and industries. Our findings indicate that China may have entered a new phase of economic development in the mid-2010s. According to the data, in recent years, wage growth has begun to polarize: Rising for professionals employed in formal skill-intensive industries; and falling for workers in the informal labor-intensive service sector. We attribute this increase in skill-intensive wages to an increase in demand for skill-intensive employment, due to the emergence of a large middle class in China, for whom the demand for high technology, finance, banking, health, and higher education industries is increasing while, at least in the recent short term, the supply of experienced, high-skilled professionals has not kept up. The employment/wage trend in the informal (low-wage) service sector, however, is following a different pattern. While there is a rising demand for services in China’s economy, the growth, due to a number of factors (e.g., large shares of GDP targeted by policymakers to investment; high rates of savings by consumers), is relatively slow. In contrast, due to a number of economic forces, including globalization and automation, the supply of labor into the service sector of the informal economy is being fueled by the flow of labor out of manufacturing and construction (two industries that that have experienced employment declines since 2013). These supply and demand trends, in turn, are leading to the fall in the growth rate of wages in the informal service sector. We conclude by discussing the possible longer-term consequences of these emerging polarization trends based on an examination of recent experience with wage polarization occurring in both middle- and high-income countries, as well as its consequences. We also present policy recommendations for greater investment in education and human capital, as well as for the development of a more comprehensive set of social safety nets for different segments of China’s population.

The US Market for Agricultural Labor: Evidence from the National Agricultural Workers Survey

AbstractRecent changes in agricultural labor supply have created renewed interest in the market for farm labor. This study estimates the supply of farm labor using 1989–2016 data from the National Agricultural Workers Survey. In the preferred specification a $1 rise in wage is associated with workers supplying 0.538 more hours, all else held constant. This estimate masks changes in this relationship over time, however, as workers responded positively to wages before 2001, and reversed this relationship after 2001. Other results highlight the role of illegality, education, experience, gender, and other characteristics with respect to labor supply.