minimum wage

The End of Poverty

In Los Angeles, California, a poor city in a debt-ridden state, a movement to end poverty is gaining popularity. Joyce Appleby, a UCLA professor and living wage advocate, recently wrote an op-ed article for the L.A. Times about the living wage movement.

The living wage movement is not new. In 1997, the L.A. City Council passed a living wage ordinance to guarantee that all people with jobs can provide for themselves and their families. Since then, several U.S. cities and cities around the world have been joining the fight for living wages.

A living wage is defined as a wage that guarantees a worker and her or his family all that they need to live on: food, housing, healthcare, transportation, utilities, and recreation. Minimum wage is supposed to equal a living wage. However 13 percent of U.S. citizens who are living below the poverty line will be quick to tell you that minimum wage often isn't enough to pay the bills. Appleby writes that despite periodic increases to minimum wage, the purchasing power of the current minimum wage is 17 percent lower than it was in 1968.

In a study of the 1997 L.A. living wage law, experimenters found that the law increased pay of over 10,000 jobs, all with only a 1 percent reduction to the workforce. Most firms studied also decreased employee turnover, which can be expensive.

Appleby writes that living wage's greatest ally is capitalism. Market growth has decreased poverty by more than 300 million people in developing countries in East, Southeast, and Central Asia. And the recent attention given to the disgruntled workers in China will help. Dr. Appleby says, "economic development raises expectations among workers." Cheap labor is becoming a thing of the past, as the plight of the laborer is gaining momentum.

An end to poverty once seemed impossible, but the progress made over the last few years is encouraging. Dr. Appleby, at least, concludes that the end of poverty may actually be in sight.

A 1989 poster celebrating Congress of South African Trade Unions' Living Wage Campaign and May Day. Photo: <a href="http://www.flickr.com/photos/egui/484824136/"/>Gardens Media Group/CAP (flickr)</a>
A 1989 poster celebrating Congress of South African Trade Unions' Living Wage Campaign and May Day. Photo: Gardens Media Group/CAP (flickr)

Employed, But Not Respected

Day laborers waiting for work in Northern Virginia. Photo: <a href="http://www.flickr.com/photos/rev_bri/67351533/in/set-1264165/">rev bri (flikr)</a>
Day laborers waiting for work in Northern Virginia. Photo: rev bri (flikr)

Working for less than the legal minimum wage. Pressured to not file workers' comp claims. Not receiving mandatory breaks.

These are just some of the egregious workplace violations that American workers put up with on a weekly basis, according to a new survey.

Researchers from the Center for Urban Economic Development, UCLA and the National Employment Law Project surveyed low-wage workers in New York, Los Angeles and Chicago. As the New York Times details, the researchers found that more than two-thirds of respondents experienced at least one form of pay violation — such as illegal deductions or loss of overtime pay— in the previous week. And one in four workers was making less than the minimum wage required by their state.

One of the survey's most disturbing findings was that only 8 percent of those seriously injured on the job filed workers' compensation claims. Employer intimidation was largely to blame. Half of injured respondents said that upon reporting their injury, employers either threatened firing, or calling the INS, and/or instructed workers not to file for workers' compensation benefits — all moves that are prohibited by national labor laws.

The report included recommendations that fell into three areas: improving enforcement of existing labor laws, revamping OSHA and other labor standards, and making sure all workers — even "unauthorized" immigrants — are treated equally.

Not everyone will agree with these reforms. But the survey sheds light on a serious problem. And although these days we're more concerned about the benefits we give those who are not employed, we should care equally about the rights we grant to those who are.

Can A Minimum Wage Save the World?

Paying people a decent wage may not be just a humane thing to do; it may be the key to jump-starting our ailing international economy.

The logic goes like this. The economic slowdown hit the U.S. hard, which is causing the demand for goods to drop. Countries like China and India are struggling to fill the gap by trying to increase domestic demand for the goods manufactured in their respective countries. By establishing a healthy minimum wage in these countries, people will be able to buy more and, thus, keep the engines of industry moving smoothly, despite the lull in demand from the West.

Global asset manager and author Richard Duncan is a key proponent of this "trickle-up" theory. As Newsweek reports:

Duncan, now a partner at Blackhorse Asset Management in Singapore, believes that kind of government intervention — undertaken within Asia or imposed by the U.S. via import tariffs for any nation not following set minimums — is more important today than ever, as the region's deep pools of labor effectively thwart the market from pushing up wages fast or far enough on it own.

Convincing Asian governments to dampen what they believe to be their biggest business advantage — low wages — won’t be an easy task. Instead, movement towards this goal may come externally, with the new Obama administration keen to negotiate trade agreements with higher labor standards.

It’s still not clear if this theory will actually work. A Global Envision post from earlier this month discussed a New York Times editorial that argued that trade agreements that push for higher wages will force factories out of business, causing their employees to take even less palatable jobs.

So who’s right? Will raising wages help or harm the millions of factory workers across the world?


Stories We're Watching

As Growth Slows, India Awakens to Need for Foreign Investment

International Herald Tribune - Tue, 02/07/2012 - 21:27
India’s central bank and economic analysts predict that growth will fall sharply to 7 percent this fiscal year and remain sluggish.

Social responsibility and a new world order

Washington Post - Innovations - Tue, 02/07/2012 - 07:56
Just before the New Year, the London-based Center for Economics and Business Research announced that Brazil had overtaken the United Kingdom as the world’s sixth largest economy. Furthermore, it predicted that by 2020, India and Russia will also have overtaken all the European economic powers.

Aid for trade policy rears its ugly head

The Guardian's Poverty Matters - Mon, 02/06/2012 - 01:41
The UK government's dismay at not being granted the contract for Typhoon fighter jets in India is an indication that its controversial aid for trade policy is still very much alive.

Liberia's battle to put the lights back on

The Guardian's Poverty Matters - Sun, 02/05/2012 - 23:00
Ellen Johnson Sirleaf has set ambitious targets to restore the country's electricity supply. But will it meet them by 2015?

As Africa's consumers rise, so does inequality

Yale Global Online - Fri, 02/03/2012 - 10:17
Kenya struggles to spread the wealth from rapid growth.

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