Wage Regulation Research Articles

The living wage as an income range for decent work and life

PurposeA “living” wage (LW) is conventionally defined as enabling meaningful participation in society above subsistence through, for example, recreation, supporting a family, and savings. There is increasing debate over LWs due to growing inequality, rising living costs and welfare reform but this remains largely framed by the econometric cost-benefit parameters that apply to minimum wage regulation. The capabilities approach advocated by Sen (1999) offers a different perspective that is inclusive of choice, contingencies and the inter-connections between quality of (paid) work and private life. The paper aims to discuss these issues.Design/methodology/approachThe paper adopts this framework and utilises a qualitative exploration of the narratives of 606 New Zealand employees to understand perceived wage effectiveness. The results suggest that a focus on a specific LW rate might be conceptually limiting, in comparison to a LW range.FindingsFirst, the findings indicate that there is a pivot range in which people move from self-assessed “survival” to “decent” income. Second, a LW may have more than a simply monetary effect in better meeting employees’ living costs; it can also improve well-being through subjective perceptions of valued freedoms to do with job satisfaction, equity and security.Originality/valueThe results thus draw attention to a wider notion of a LW in terms of personal and family well-being, utilising a capabilities approach, with implications for organisational practice, policy and theory concerning sustainable livelihood and the UN Sustainable Development Goals.

Small differences matter: how regional distinctions in educational and labour market policy account for heterogeneity in NEET rates

Labour market and education policy makers and researchers are increasingly focusing on the NEET indicator as a supplement to the youth unemployment rate. Analyses of factors influencing NEET have concentrated primarily on individual characteristics such as gender and migration background on one hand, and on macro-level factors of nations such as economic growth and minimum wage regulations on the other. However, nations are not homogenous, especially when a country is divided into several federal states, as is the case with Austria. This article aims to analyse regional differences within Austria. In order to explain the differences, we define a multilevel model that contains four contextual factors: the importance of upper secondary education; the importance of dual education; vacant jobs; and expenditures for active labour market policy. Because the institutional level addresses different age groups, the analysis was split into two age groups: 15–19 and 20–24 years. The results have shown that, besides the social structure of the population, contextual factors like the upper secondary education, the dual education, vacant jobs, and expenditures for active labour market policy are also relevant for explaining regional differences in the NEET rates. But one main insight was that the impact of the contextual factors varies between different social groups.

Unsettling trends in collective bargaining today

Today, there is virtually no legal system that does not enshrine collective bargaining – as the foundation of a balance of forces in the labour market. At each level it is conducted (international - European - national - sector - local - unit), it determines the way labour relations are regulated and gives workers the opportunity to express themselves, through solidarity, with a unique voice. Through collective bargaining, employees have the opportunity, by uniting their bargaining power to counter-balance the superior power of the employer, to determine the acceptance of (some of) the demands and the contractual regulation of fair wages and working conditions, in relation to the possibilities and needs of each party. Currently, one cannot but notice that collective bargaining has indeed its limits, some circumstantial, others permanent. Collective bargaining takes place increasingly more timid and in rather marginal areas, its results covering a smaller number of employees. As traditional expression of the solidarity between workers, collective bargaining – while this solidarity displays signs of dissolution – has diminished its strength and shows a centrifugal, decentralising tendency.The paper presents some of the circumstances that can be considered responsible for the tendency to compress collective bargaining at all levels. Certain causes are therefore analyzed: globalization, detailed legalization, the competitive relationship between employees, the consumers’ pressure or the opposition of the individual employee.

Death at work? Mortality and industrial employment in Belgian cities at the turn of the twentieth century

In this article, we reconstruct the sex- and age-specific mortality rates for the 25 largest Belgian cities at the turn of the twentieth century, and we explore their relationship with industrialization. Whereas previous research has focused mainly on the general level of industrial employment, we make a distinction between two production systems: cottage work (i.e., employment at home) and regular industrial production (i.e., centralized employment). Our linear regression models suggest that cities oriented toward cottage industry were more lethal than those oriented toward regular industry. Cities where a substantial percentage of the labor force was engaged in cottage work suffered high mortality rates, which confirms contemporary claims that in Belgium the cottage industry was “the most murderous of all industries.” Regular industrial employment, on the other hand, appears to have been less harmful for men and women alike, both young and old. We do observe, however, a detrimental effect from female regular industrial employment on infant and child mortality. Using contemporary government reports and sociological works, we were able to gain insights into the possible pathways that created these large health discrepancies between production systems. We argue that the health hazards encountered by cottage workers were due to the absence of labor and wage regulations and to the lack of health and safety standards in cottage work. In many sectors of the regular industry—and in heavy industry in particular—numerous regulations of this type had already been enforced by emerging labor union organizations, resulting in improvements in working conditions and higher wages. Furthermore, regular heavy industry seems to have attracted the healthiest workers.

From the informal economy to the meaning of informality

PurposeThe purpose of this paper is to assess ways in which informality can be understood and reviews an emerging area of management scholarship. The origins and nature of informality are discussed with the aid of two different theoretical tools: “workplace sociology” (WS) and “mixed embeddedness” (ME).Design/methodology/approachThe analysis is grounded in empirical material reflecting different aspects of informality mainly within the ethnic economy, such as a study on the implementation of the National Minimum Wage regulations (Ram et al., 2007; Jones et al., 2004, 2006).FindingsThe authors argue that the combination of WS and ME provides a valuable means of content and character of informality. It can also help to explaining variations and patterns within the informal economy, as well as understanding new forms of informality in the ethnic economy and beyond in “superdiverse” contexts.Originality/valueThis paper bridges two different theoretical approaches to explain the interactions between the firm and state regulations, as well as the workplace relations between employer and employees.

Stabilizing Valences of an Optimum Monetary Zone in a Resilient Economy—Approaches and Limitations

Following De Grauwe (2016), this research advances the idea according to which economies that are part of a monetary union issue debt in a medium of exchange they cannot control: financial markets develop the capacity to impose default on such economies. We are interested in how previous research analyzed the notion that, when economies are autonomous and they employ the exchange rate as a vehicle to handle asymmetric shocks, they confront comparable constraints on the performance of exchange rate strategies. When a monetary union is affected by significant asymmetric shocks, the member economies have to deal with tough adjustment issues. Empirical and secondary data are used to back the assertion that, in a monetary union, economies that are affected by long-lasting asymmetric demand shocks demand wage elasticity and labor flexibility to rectify for them, and if the latter generate substantial budget deficits, financial markets tend to intensify the consequences of the asymmetric shocks, boosting the demand for severe regulation of wages and labor flexibility. Our article makes conceptual and methodological contributions to the view that member economies of a monetary union are exposed to varying market reactions, generating more volatility in the business cycle: an economy undergoing a recession and a rise in the budget deficit might be affected by wide-ranging transactions of its government bonds, causing a liquidity crisis and superior interest rates, and possibly coercing the government of that economy to adopt budgetary austerity measures, thus intensifying the recession.

Major court and tribunal decisions in Australia in 2016

This annual survey of the more significant tribunal and court decisions in Australia in 2016 covers recent developments in the relatively new Fair Work jurisdiction to adjudicate complaints of workplace bullying, practices and processes in enterprise bargaining, some observations on the evolution of standards of civil discourse in industrial negotiations, and clarification of when employers will be held responsible for employees who commit crimes at work. It concludes with a brief note on a recent UK development, making Uber responsible for meeting minimum wage and working time regulations in respect of rideshare drivers.

Development in the Regulation of Wages and Working Conditions: The Employee Perspective

<div class="page" title="Page 1"><div class="layoutArea"><div class="column">The Nordic countries are renowned for their high level of unionization and collective bargaining. However, globalization, Europeanization, and an increasing individualization are often pictured as factors suppressing collective regulation. In this article, we look at the developments in the regulation of wages and working conditions from a macro perspective by combing two large cross- sectional surveys into a longitudinal study with point of departure in the Danish case. We find that collective bargaining coverage continues to stand surprisingly strong, both in terms of being very widespread and in employee awareness, but Danish wage and salary earners also have an interest in extra support in the form of generalization and/or a politically regulated minimum wage </div></div></div>

The Impact of the Minimum Wage on Male and Female Employment and Earnings in India

This study examines how employment and wages for men and women respond to changes in the minimum wage in India, a country known for its extensive system of minimum wage regulations across states and industries. Using repeated cross sections of India's National Sample Survey Organization employment survey data for the period 1983–2008 merged with a newly created database of minimum wage rates, we find that, regardless of gender, minimum wages in urban areas have little to no impact on labor market outcomes. However, minimum wage rates increase earnings in the rural sector, especially for men, without any employment losses. Minimum wage rates also increase the residual gender wage gap, which may be explained by weaker compliance among firms that hire female workers.

Minimum Wages in Sub-Saharan Africa: A Primer

The fraction of workers currently covered by minimum wages in Sub-Saharan Africa (SSA) is small, but as formality and urbanization increase, wage regulation will become increasingly relevant. In this analysis, we find that higher minimum wage values are associated with higher levels of GDP per capita, in both SSA and non-SSA countries. Using two measures to assess the level at which minimum wages are set, we find that minimum wages in SSA countries are on average lower—relative to average wages—than most other comparable regions of the world. Thus, SSA as a whole reflects no particular bias toward a comparatively more pro–minimum wage policy. Within SSA, however, we observe that low-income countries set relatively higher minimum wages than middle- or upper-income countries. We find significant variation in the detail of minimum wage regimes and schedules in the region, as well as large variations in compliance. Notably, several countries in SSA have relatively complex minimum wage schedules, and on averag...

Driver salary identification by hypothesis testing

This paper outlines comparing two independent samples, particularly average driver salary in Slovakia and the other EU countries. Significant differences between salaries are pointed out through two examples dealing with hypothesis testing. For Western European Union countries, the level of salaries in road transport is higher in absolute terms compared to the salaries of drivers in the central and eastern parts of the European Union. Different salaries and requirements of wage regulations create a discriminatory environment among entrepreneurs however harmonization of salaries in the field of road transport is specific because carriers offer transport throughout the whole European Union market.

How Does the Minimum Wage Affect Firm Investments in Fixed and Human Capital? Evidence from China

AbstractThis paper empirically analyzes the impact of Chinese minimum wage regulations on the firm decision to invest in physical and human capital. We exploit the geographical and inter‐temporal variations of county‐level minimum wages in a panel data set of all state‐owned and all above‐scale non‐state‐owned Chinese firms covering the introduction of the new Chinese minimum wage regulations in 2004. In our basic regressions including all Chinese firms, we find significant negative effects of the minimum wage on human capital investment rates and no overall effects on fixed capital investment rates. When grouping firms by their ownership structure, we find that these results hold for most firms. Foreign‐owned firms are an exception to some extent, because the likelihood that they invest in human capital has not decreased in response to the policy.

A Chinese company’s investment strategy in South Africa: the case of Hisense

Hisense, a Chinese home appliance manufacturer, entered South Africa’s TV market in 1996 and the company has since expanded its operations. Now Hisense is one of the major players in the TV market in South Africa. The company’s success can be measured through a mix of the four P’s of marketing: price, product, promotion and place (distribution). The successful combination of strategies helped Hisense penetrate South Africa’s TV market and acquire a growing market share. As a result, Hisense has contributed to export-led economic growth, technology transfer and job creation, among other development-related benefits to the host country. However, at the same time Hisense has faced challenges including problems with labour relations, e.g. poor working conditions and violations of minimum wage regulations. Most of these problems are recurring issues. This shows that overcoming these challenges is not an easy task for Chinese investors operating in South Africa or elsewhere in Africa, and questions remain regarding whether Chinese investment can contribute to fostering Africa’s industrialisation as well as China’s soft power.

Конституционные основы заработной платы и социального страхования в России

In accordance with the author´s intention, and in accordance with the constitutional framework, the article analyzes the wages and social insurance in Russia, unjustified super differentiation in wages, which excludes financial participation of low-income workers in the compulsory social insurance, who should be included in the system of compulsory social insurance without any conditions and restrictions. The author analyzes the state of wages, the necessity of state regulation of wages, the basic state guarantee on wages — minimum wages and salaries in Russia, with the aim to determine the conceptual basis for legal regulation of the wages in Russia in the interests of its population, in particular, it is argued that consumer demand is the main and only engine of the market economy and it has to be moderately in advance of the production capabilities. The author draws the attention to the use of state and contractual regulation of labour, as it is objectively necessary and socially justified if public and private regulation of labor relations in the sphere of remuneration are correctly interrelated. The main purpose of contractual regulation of remuneration should be the improvement of the situation of workers on the basis of the agreement between the parties to social partnership. For its part, the state should not interfere with the balance and supply of labour in the labour market, the formation of a natural price for labour. According to the author, it is necessary to constitutionalize the concepts of “decent work” and “decent wages”, “compulsory social insurance”. “Decent work” and “decent wage” should be recognized at the constitutional level as the principles of work organization.

Сравнительно-правовой анализ заработной платы в Российской Федерации и других странах Содружества Независимых Государств

Market relations have led to substantial changes in wages, the mechanism of legal regulation of remuneration has changed significantly, and there are many difficulties and problems, unresolved issues. In this regard, according to the author’s intention, the article determines the legal regulation of wages in comparative-legal aspect, analyzes the concept, nature and the general state of wages in Russia and other CIS countries, taking into account the principles of work organization, consistently analyzes the shortcomings of remuneration of labour in Russia, because wages are still undergoing through some turmoil (unjustified super-differentiation in wages, low level of wages of most workers and the minimum wage). The aim of this work is the study of the legislative regulation of wages, development of recommendations on improvement of certain provisions on payment for labour in the Russian Federation. Taking into account the fact that in the wage regulation in the labor code and the labor codes of other countries of the Commonwealth of Independent States (CIS) there are many achievements and successful solutions to many pressing issues of remuneration, and also the fact that that the application of the comparative method allows identification of existing problems and contradictions, the article studies the most important areas of restructuring of the legal organization of wages in the Russian Federation and other CIS countries, as one of the key regulators of the market economy.

The minimum wage in Germany: what brought the state in?

ABSTRACTA statutory minimum wage has been introduced in Germany, in the face of business opposition but abetted by union support. The political coalition in favour of minimum wage regulation brought together the centre-left and the centre-right with the argument that regulation is needed to prevent disfunctional interaction between low wages and the social security system. Thus, the dualization which characterizes Germany’s inegalitarian form of co-ordinated capitalism has provoked a corrective political response. The contribution traces the long path to government intervention and assesses why employers were unable, or unwilling, to pre-empt intervention by maintaining the coverage of collective bargaining. It is argued that market liberalization has had a paradoxical effect on employer power: intense domestic as well as international competition has reduced employers’ capacity to act strategically to fend off regulation by the government.

Некоторые проблемы правового регулирования заработной платы в Российской Федерации

The article covers the problems of legal regulation of wages. The authors analyze difficulties in the implementation of certain provisions of the Labour Code, dealing with the basic state guarantees in labor remuneration. In particular, the authors pay attention to the problem of raising of the minimum rate of labour payment to the subsistence level in the Russian Federation. Nowadays this rule of the Labour Code is not operating. Authors analyze the approach of the Russian Ministry of Labour to solving this problem. Special attention is paid to the establishment of the payroll schedule, because the Labour Code, determining the abovementioned schedule, does not set specific dates, proposing to resolve this issue in local regulations or in an individual employment contract. In addition, the authors present the analysis of the issues associated with limitation of deductions from the employee´s salary by the employer, as well as the complexity of the interpretation of the term “calculation error” in the presence of which Part. 4 Art. 137 of the Labour Code allows for pay deduction or recovering of overpayments from an employee. At present, the Labour Code, using that term does not disclose its contents. Therefore, in practice, it is interpreted in different ways.

Employment relations and growing income inequality: Causes and potential options for its reversal

The growth of income inequality is now recognized to be one of the most important developments in employment relations of our time. While inequality has increased in many parts of the world, it has been most pronounced in the United States. We review the factors that have been suggested to cause the growth in inequality and, given these multiple causes, suggest a set of actions that might begin to reverse this trend. We give special attention to the changes in the employment relationship related to labor market institutions – including unions and other forms of worker representation, wage regulations and enforcement, and safety net policy – while also accounting for explanations and proposals that focus on technology, skills and education, and globalization. Additionally, we argue that emerging forms of organizational restructuring are becoming increasingly important to the study of inequality and its remedies.

Sweatshops: Economic Analysis and Exploitation as Unfairness

The economic and moral defense of sweatshops given by Powell and Zwolinski (J Bus Ethics 107:449–472, 2012) has been criticized in two recent papers. Coakley and Kates (J Bus Ethics 117:553–558, 2013) focus on putative weaknesses in the logic of Powell’s and Zwolinski’s argument. Preiss (Bus Ethics Quart 24(1):55–82, 2014) argues that, even granting the validity of their economic argument, Powell’s and Zwolinski’s defense is without force when viewed from a Kantian republican viewpoint. We are concerned that sweatshop critics have misinterpreted the economic literature and overstated the conclusions that follow from their ethical premises. We show that the best understanding of the current economic literature supports Powell’s and Zwolinski’s conclusions about the negative effects of sweatshop wage regulation, and that it is unreasonable to reject economic analysis in moral argument against sweatshops even from a Kantian perspective. Additionally, we defend the theory of exploitation as unfairness given by Wertheimer (Exploitation, 1996), and show how economic analysis can be applied to that theory to identify cases of sweatshop exploitation.

Determining Minimum Wages in China: Do Economic Factors Dominate?

Minimum wages may be an important instrument to reduce income inequality in a society and to promote socially inclusive economic growth. While higher minimum wages can support the Chinese transformation towards consumption driven growth, they can worsen the price competitiveness in export markets. As they differ throughout the country, this paper investigates their determinants at the regional level. In addition to a broad set of economic determinants, such as per capita income and consumption, consumer prices, unemployment and industrial structures, spatial effects are taken into account. They might arise for different reasons, including competition of local policymakers. The results show that the impact of economic variables declines, once spatial spillovers are considered. Although the minimum wage regulation pursues the relevance of economic factors in the determination of the appropriate levels, the actual development is largely driven by regional dependencies. As minimum wage standards set by local officials do not fully reflect the regional economic development, further reforms should be on the agenda.