Wage Policy Research Articles

The Minimum Wage and Its Implications to The Open Unemployment Rate Covid-19 Pandemic in West Java

The escalation of Covid-19 cases in Indonesia really affected employment sector, as seen from the escalation of unemployment rate, especially in West Java. Based on data from Statistics Indonesia (BPS) of West Java Province in February 2021, the escalation in the open unemployment rate reached 8,75 million people. The impact of Covid-19 has also made business performer experience a decreasing income, making it difficult to pay wages. Unemployment causes psychological effects on individuals and reduces the level of welfare. The purpose of this study was to determine the effect of the minimum wage on the open unemployment rate in West Java. This study is associative research using a quantitative approach. The analytical method used in this study is simple regression analysis using secondary data obtained from Statistics Indonesia (BPS) in 2015-2020 in West Java Province. The results showed that the minimum wage has no effect on the open unemployment rate. It is expected that the wage policy be able to provide a balance between the capability of the company and a decent life

The effect of increased minimum wage on child externalizing behaviors

The Family Stress Model (FSM) has been used to show the relationship between socioeconomic disadvantage and child externalizing behaviors and suggests that interventions promoting economic security may be a promising approach to reduce child externalizing behavior. Using longitudinal data from the Fragile Families and Child Wellbeing study from 2002 to 2010 we examined the effect of minimum wage laws on child externalizing behaviors through a difference in difference in differences (DDD) study design. Externalizing behavior was assessed with the Child Behavior Checklist (CBCL) using the rule breaking, attention problems, and violence subscales. DDD analyses suggest a $1 increase in the minimum wage was associated with a 2% reduction in violent behaviors (β = −1.90, 95%CI[−3.12, −0.68], p = 0.003) for the most vulnerable families headed by a primary caregiver with less than a high school education. The study results suggest that increases in the minimum wage are associated with reductions in the most severe and costly externalizing behaviors among children. Study results contribute to a growing body of literature showing that increased family incomes have positive impacts on child development, and that minimum wage policy is potentially an effective mechanism for the primary prevention of violence.

A Qualitative Analysis of SNAP and Minimum Wage Policies as Experienced by Workers with Lower Incomes

ABSTRACT Work-related policies, including minimum wage and food assistance work requirements, can affect food security for people with lower incomes. This study conducted 112 qualitative interviews to understand participant policy experiences in two contexts (Raleigh, North Carolina and Minneapolis, Minnesota). Participants experienced frequent, destabilizing changes to their United States Department of Agriculture Supplemental Nutrition Assistance Program benefits, which they identified as part of a broader safety net. Raleigh workers described an unsupportive policy environment; Minneapolis workers reaped few benefits from an ongoing wage increase. Many workers face complex financial tradeoffs; more sophisticated evaluations should consider broader policy contexts and long-range effects.

The cost shock, margin gap and enterprise financialization: An exogenous shock based on minimum wage

ABSTRACT This study examines the exogenous institutional impact of minimum wage policy on enterprise financialization in China. Empirical results show that an increased minimum wage significantly promotes the financialization of real enterprises. Moreover, the impact is more pronounced in enterprises characterised by a more significant profit margin gap between tangible and financial assets and higher degrees of labour-intensiveness. Further tests reveal that the promotional effect of the minimum wage on the financialization of labour-intensive enterprises tends to be more substantial under the following circumstances: (i) a smaller gap exists between an enterprise’s average wage and the local minimum wage; (ii) an enterprise finds it more challenging to pass on costs to the market; (iii) following the implementation of the Labour Contract Law. Further investigation indicates that raising the minimum wage exacerbates the adverse effects of enterprise financialization on corporate value.

Geen makke schapen.

In 1964, the Netherlands experienced an average gross wage increase of 17 percent. In the economic literature, this wage explosion is mostly explained by the contrast between labour market developments and the restrictive wage policies by the Dutch government, which until that year adhered to central, state led wage determination. Overfull employment pressured employers to circumvent and ignore government regulations, and induced trade unions to increase wage demands, which, under labour market pressure, in 1963/64 were easily and willingly met by both employers and the government. In this article, it is argued that this explanation is too one sided, as it only takes marketplace bargaining power of workers into account (the power that results directly from tight labour markets), and ignores associational power (the power that results from the formation of collective organizations of workers). Focussing on unofficial strikes in the metal industries between 1959 and 1963, it is shown that in the run up to the wage explosion, tensions between rank and file and union leadership increased, which eventually forced the leaders to change their attitude. Remnants of the post-war, but now dissolved, communist trade union “Eenheidsvakcentrale” in the Amsterdam shipbuilding industry played a pivotal role in the mobilisation for these wildcat strikes.

Analysis of Economic Effect of COVID-19 Pandemic on the Kenyan Economy

Abstract COVID-19 virus can be described as one of the worst global pandemic ever experienced in the 21st Century. Focusing on the pandemic the study main objective was to analyze direct and indirect economic effect of COVID-19 pandemic and establish the extent to which the virus has affected Kenya’s key economic sectors contributing to the country’s GDP. The study adopts a content analysis approach whose aim is to describe COVID-19 phenomenon. The study relies on diverse secondary database not limited to: World Health Organization (WHO) on COVID-19 trends, IMF, UNDP, Central Bank of Kenya (CBK), KNBS, IPAR, ICA and KIPPRA among others. Data Analysis results reveal that COVID-19 poses an unprecedented shock by disrupting economic activity. Kenya’s current account deficits has declined drastically in capital flows. The GDP in 2020 shrank to 1.1% from. 5.7% .The country is also experiencing risk of collapse of health systems that is under pressure from spread of the virus; households have fallen into poverty; and a huge number of losses of employment have been experienced across all sectors estimated to about 4.64 million. Whereas the Kenyan Government focuses on re-engineering the economy by implementing economic stimuli package of fiscal, monetary, wage, and social protection policies aimed to arrest the economic recession. The study recommends that the government may consider sovereign debt restructurings; expansion of loan programs to firms and households in the formal sector and cash transfers to cushion vulnerable households in the informal sector and promote recovery of the economy.

WAGE BILL AND FINANCIAL PERFORMANCE OF LEVEL 5 FAITH BASED HOSPITALS IN NAIROBI METROPOLITAN, KENYA

Purpose: The main objective of this study was to examine the effect of wage bills on financial performance of Level 5 faith based hospitals in Nairobi Metropolitan, Kenya.
 Materials and Methods: A descriptive survey was used in this study. The target population comprised of 6 Level 5 faith based hospitals, 30 staff members in Finance departments and 6 HR Managers. In total, the target population was 36. Census technique was used to select all the 36 respondents to participate in the study. Questionnaires were used to collect the data from the respondents whereas the financial statements were also obtained from the hospitals. Cross sectional technique was used to obtain data from the financial statements of the 6 Level 5 Faith Based Hospitals. Quantitative approach of analysis was used in the study whereby descriptive and inferential statistics were involved. The data was analyzed with the use of SPSS and summarized in frequencies and percentages. The summarized data was presented using figures and tables.
 Results: The findings showed that salaries affected the financial performance of the faith based hospitals to some extent. Provision of performance related incentives and allowances affect the financial performance of the faith based hospitals to a greater extent. Majority of the respondents were positive that wage policy has an effect on the financial performance of faith based hospitals. Basic salary (Beta=.298) and wage policy (Beta=.364) were found to be positively related to the financial performance of faith based hospitals. On the other hand, performance related incentives and allowances had a negative inverse association. It was also found that majority of the hospitals are providing a wage bill between 36-40%. This is fairly good because it is close to the internationally accepted wage bill percentage standard of 35%.
 Unique contribution to theory, practice and policy: Hospital wage bills should not exceed 40 per cent of the total revenue because it may lead to delayed payment of salaries or compromising some expenditure due to financial pressure.

Job Satisfaction in Federal Structure - A Case of Bhojpur, Nepal

Purpose: The feelings that an employee have for the job is essential to be analyzed the job satisfaction level of government employees after implementation of federal state in the context of Bhojpur district of Nepal. Design/Methodology/Approach: The questionnaire was distributed to governmental employees via mail and direct distribution to respective offices of Bhojpur district with 93.8% of response rate. The data has been divided into local, provincial and federal categories and separately analyzed along with combined analysis too. Satisfaction level along with the factors of the same was accessed using SPSS for descriptive and inferential statistics. Findings/Result: Government employees from all tiers of government viz. local, provincial and federal are dissatisfied with present remuneration, benefit and employee adjustment process along with present organizational structure, wage policy, present work performance evaluation system and decision-making system in offices but satisfied with present leave system after promulgation of federal structure. Present job authority and position are acceptable level for employees working in all three tiers of government. Most crucial factor seems to be promotion and career growth rather than remuneration. Job training, working environment, team spirit and right work performance evaluation system seem to be major parameters for job satisfaction. Job location is temporary in nature which can be easily handled. Strong reservation on promotion and job rotation approach which is included in new federal structure by all tiers of government employees. Originality/Value: It is survey-based research to guide for amendment of present organizational structures and wage policy in new federal structure of Nepal. Paper Type: Survey based Policy Research

Economic inequality and congressional action in the United States: A comparison of the minimum wage and alternative minimum tax

AbstractA central puzzle in American politics is the stark increase in economic inequality since the early 1970s due, in part, to the absence of public policies to address this trend. One explanation is policy drift: Inequality has grown in the United States because the political process has been unresponsive to economic trends toward inequality. A second explanation is unequal political influence: Wealthy individuals and corporations wield superior political influence and tilt public policy toward their interests. We compare these explanations using the federal minimum wage and alternative minimum tax (AMT) from 1969 to 2012 as comparison cases. These policies were both denominated in nominal dollars, so the effect of policy inaction is comparable for both policy domains. We find that (1) the U.S. Congress was much more likely to update AMT policy than minimum wage policy after 1978, (2) Congress protected and increased the real value of the AMT deduction for married couples, whereas the real value of the minimum wage and individual deduction declined after 1978, (3) Congress and the President eventually converted the AMT—but not the minimum wage—to automatic adjustments for inflation. These patterns highlight the role of political inequality in economic policy‐making.

Human Resources Budget

In this article we present aspects regarding the development of the human resources budget, the calculation methods for the wage bill and the decisions related to the wage policy, alongside a series of examples, in order to convey a better understanding of the topic.

Radical democratic citizenship at work in an adverse economic environment: the case of workers’ co-operatives in Scotland

ABSTRACT Worker co-operatives generally embrace democracy in their ownership and decision-making structure. However, the commitment to a flat organisational hierarchy, implementation of equal wage policy, and the pursuit of a strong ethical policy position these co-operatives on the highly principled side of the co-operative landscape in the UK. This paper draws on an ethnographic study of five such principled workers’ co-operatives operating in a most adverse economic context, the UK capitalist market economy. The study explores collective decision-making and the personal investment as two important political aspects. Workplace democracy and the personal are interlinked paradigms for political praxis – as practiced democracy, immanent critique of the hegemonic corporate way of organising work, as well as prefiguring a viable alternative. Taking the perspective of radical worker co-operatives, this article caters to an urgently needed conceptualisation of radical democratic citizenship at work.

The Implementation of Labor Development Principles According to Job Creation Law as a Reason to Protect Wages Rights

<p>Wages as labor’s basic rights have changed since the Job Creation Law was enacted. It is essential that wages be distributed following the principle of job creation to contribute to the national development for the whole people. This research aims to compare the regulation vis-à-vis legal protection and the implementation of the principles of labor development. With normative legal research and statutory approach, this research reveals that the legal protection regarding wages in the new regulations are not far better than the former ones. The wage policies that were initially stipulated explicitly in the Labor Law were revoked from the Job Creation Law, where the labor principles are not applied. With the protection not better than that of the former regulation, it is implausible to improve the welfare of workers and their family members. Supervision conducted by the government is required to ensure that labor’s rights to wages are protected.</p><p><strong>Keywords</strong><strong>:</strong> Wages; Development of Labor; Job Creation.</p>

A közszolgálati életpályák szabályozásának jogalkotói megközelítése

A tanulmány a közszolgálati jogalkotás utóbbi években tapasztalható „extrém” ütemét tekinti át, elsősorban a közszolgálati életpálya fogalmának jogalkotói értelmezésén, azaz az előmeneteli és illetményrendszerek szabályozásán keresztül. Kiindulópontja, hogy a közszolgálati törvények mögött meghúzódó jogpolitikai célok a közszolgálati életpálya fogalmát gyakran leegyszerűsítő módon értelmezik, és egy-egy új életpálya bevezetését elsősorban valamilyen bérpolitikai intézkedés eszközének tekintik. Az életpálya fogalmát először tudományos szempontból vizsgálja meg, majd áttér ennek jogalkotói megközelítésére. A tanulmányban foglalkozik a díjazási rendszerekre jellemző nemzetközi személyzetpolitikai tendenciákkal, végül összehasonlítja a „civil” magyar közszolgálat előmeneteli és illetményrendszereit. A vizsgált kutatási kérdések a következőkben összegezhetők: vajon melyik alkalmazott rendszermegoldás illeszkedik „jobban” a közszolgálati jogalkotás nemzetközi trendjeihez? Milyen jogi és személyzetpolitikai megoldásokat alkalmaz egyik vagy másik szabályozási irányvonal? Végül, a differenciálódás hozzájárulhat-e a közszolgálati életpályák modernizálásához? Egyáltalán, beszélhetünk-e ebben az esetben „kijegecesedett” megoldási útvonalakról, vagy egyelőre sokkal inkább valamiféle „posztbürokratikus” útkeresés szemtanúi vagyunk?

Wage Policy in Indonesia Based on Government Regulation Number 36 of 2021 and its Economic Aspects

Wages are an important element in the employment relationship. In 2021, The Indonesian government has issued Government Regulation Number 36 of 2021 on Wage Policy. The purpose of this wage policy review is to compare the wage provision between Government Regulation Number 78 of 2015 and Government Regulation Number 36 of 2021. The novelty of this study is to find differences in term of wage rules between the previous regulation and the latest ones, and also to examine all of those differences based on both legal and economic aspects; so that, the government will get more complete understanding in carrying out wage policy. Furthermore, the wage policy produced by the government hopefully can creates a positive impact on workers and employers.

To pool or not to pool: Equilibrium, pricing and regulation

We study a transportation network company (TNC) that offers on-demand solo and pooling e-hail services in an aggregate mobility service market, while competing with transit for passengers. The market equilibrium is established based on a spatial driver–passenger matching model that determines the passenger wait time for both solo and pooling rides. We prove, under mild conditions, this system always has an equilibrium solution. Built on the market equilibrium, three variants of pricing problems are analyzed and compared, namely, (i) profit maximization, (ii) profit maximization subject to regulatory constraints, and (iii) social welfare maximization subject to a revenue-neutral constraint. A comprehensive case study is constructed using TNC data collected in the city of Chicago. We found pooling is desirable when demand is high but supply is scarce. However, its benefit diminishes quickly as the average en-route detour time (i.e., the difference between the average duration of solo and pooling trips) increases. Without regulations, a mixed strategy—providing both solo and pooling rides—not only achieves the highest profit and trip production in most scenarios, but also gains higher social welfare. The minimum wage policy can improve social welfare in the short term. However, in the long run, the TNC could react by limiting the size of the driver pool, and consequently, render the policy counterproductive, even pushing social welfare below the unregulated level. Moreover, by maintaining the supply and demand of ride-hail at an artificially high level, the minimum wage policy tends to exacerbate traffic congestion by depressing the use of collective modes (transit and pooling). A congestion tax policy that penalizes solo rides promotes pooling, but may harm social welfare. However, it promises to increase both social welfare and pooling ratio when jointly implemented with the minimum wage policy.

Minimum wage and entrepreneurship: Evidence from China

This paper investigates the effects of minimum wage (MW) policies on entrepreneurship by using all contiguous county-pairs in China that straddle prefecture borders. We find that the MW significantly and negatively affects entrepreneurship, and the results are robust to a battery of tests based on different specifications. A plausible mechanism might be the crowd-out effect of increase of labor cost, given that our findings are particularly strong in labor-intensive industries, in areas with higher labor costs or low-level access to finance. Overall, this study highlights the negative effects of minimum wage labor policy on entrepreneurship, which have yet to be fully understood.

Demand and growth regimes in finance-dominated capitalism and the role of the macroeconomic policy regime: a post-Keynesian comparative study on France, Germany, Italy and Spain before and after the Great Financial Crisis and the Great Recession

We contribute to the recent debates on demand and growth regimes in modern finance-dominated capitalism linking them to the post-Keynesian research on macroeconomic policy regimes. We examine the demand and growth regimes, as well as the macroeconomic policy regimes for the big four Eurozone countries, France, Germany, Italy and Spain, for the periods 2001–2009 and 2010–2019. First, our approach supports the usefulness of the identification of demand and growth regimes according to growth contributions of the main demand components and financial balances of the macroeconomic sectors. This allows for an understanding of the demand sources of growth, or stagnation, if there is a lack of demand, of how these sources are financed and of potential financial instabilities and fragilities. Second, when it comes to the macroeconomic policy drivers of demand and growth regimes, as well as their respective changes, we show that the exclusive focus on fiscal policies, as in the previous literature, is too limited and that it is the macroeconomic policy regime which matters here, i.e. the combination of monetary, fiscal and wage policies, as well as the open economy conditions.

Examining the Impact of Minimum Wage Policy on Hospitality Financial Performance Using Event Study Method

ABSTRACT This study investigated the effect of the minimum wage policy on hospitality firm value and financial performance. The event study method (ESM) results revealed the significant impact of the introduction of minimum wage on firm value, implying that investors perceived minimum wage policy had a negative effect on profitability in the long run. Furthermore, substantial increases in the minimum wage beyond market expectations can be a threat to businesses. Findings offer evidence that minimum wage policy did affect financial performance; hence, implementing a balanced minimum wage policy to benefit all stakeholders including business owners is imperative for a win–win situation.

Indonesia's Cheap Wages Regime: The Political Economy of Minimum Wages Policy under Jokowi Presidency

Indonesia's Cheap Wages Regime: The Political Economy of Minimum Wages Policy under Jokowi Presidency

Managing the impact of globalization and technology on inequality

This article tests the relative importance of globalization and technological change in explaining income inequality at higher and lower development levels. Besides, the article analyses the effectiveness of a set of policy measures for fighting inequality. We use relative pre-tax income shares as a proxy for inequality. Several linear and non-linear threshold panel data models with GDP per capita as the threshold variable are estimated for 42 countries over the period from 1994 to 2016. We find that technology is the most important generator of inequality, while the effect of various globalization measures is weak and often insignificant. We find limited evidence that the effect of globalization differs with respect to the level of GDP per capita. Our results suggest that full employment policies in the low inflation environment are the most efficient solution for the inequality problem. Higher employment and low inflation rate decrease the inequality level. Other than that, we do not find other policy measures that satisfy the one-size-fits-all criteria for tackling inequality. Instead, a set of efficient policy measures against inequality, including expenditures on education, minimum wage policies, and lending rates, depend on the development level and idiosyncratic policies and institutions.