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Re: living/minimum wage
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Please help make the Manifesto better, or accept it, and propagate it!
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I believe we fail to agree on something very fundamental here. I am for one
is in full support of Unions given a Free Market, I repeat, given a Free
Market. That is, the unions give a voice to the workers and balance the power
of corporations by allowing them to negotiate wages. What is important to
realize here is that unions themselves are institutions and in the absence of
a free market they will also abuse their power much like what we see in the
Telecom Union in India where consumer rights are ignored.
Minimum wages negotiated through a balance power system is far better for the
consumers and the workers alike. Hence, unionization of labor in a free
market is the best option and all other options fail to provide such a
balanced voice for both the consumers and the workers.
PS: what you were saying was never in the minority on this forum and certainly
not in India! I think what I was saying was clearly not understood and hence
we keep debating on the balance of institutional power issues again and
again!!
Sincerely,
Vamsi M.
Charu datt wrote:
> ---------------------------------------------------------------------
> Please help make the Manifesto better, or accept it, and propagate it!
> ---------------------------------------------------------------------
> Over a year ago this forum debated the question
> of a minimum wage in India. The two opposing views
> were [briefly]:
> 1. it is a bad idea since it imposes a control on the market vs.
> 2. it is a good idea because no human should be forced to
> work for less than what it costs pay for basic living needs.
>
> [I was a minority voice making the latter argument].
>
> The attached article [from imo an unlikely source!] bolsters
> my argument with hard data that a living wage does not
> result in job losses as alleged by the opposing view.
>
> -charu
>
> http://www.businessweek.com/@@UnfoUmcQrNXoeQQA/premium/00_36/b3697086.htm
>
> >From Businessweek Magazine [sept 4, 2000; US Edition]
>
> What's So Bad about a Living Wage?
> Paying above the minimum seems to do more good than harm
>
> Juana Zatarin lives in a one-bedroom
> apartment that rumbles whenever a jumbo jet lands at Los Angeles
> International Airport. But life is looking up for the 44-year-old
> mother of three, who works as a baggage screener at the
> airport. Thanks to Los Angeles' so-called living-wage law, which
> requires city contractors to pay employees a minimum of $8.97 an
> hour, Zatarin's salary has jumped nearly 50% in the past year. She
> will earn some $18,000 this year, putting her above the $17,028-a-year
> federal poverty line for a family of four for the first time in
> years. This summer, Zatarin took her family on vacation for the first
> time since 1994. ''I'm more relaxed now that I can make our
> payments,'' she says.
>
> While most mainstream economists would laud
> Zatarin's good fortune, they typically disapprove of laws that
> require firms with municipal contracts to pay their workers enough to
> stay out of poverty. Ever since Baltimore passed the first such
> ordinance in 1994, economists have derided them as little better than
> the federal minimum-wage law, which many believe forces employers to
> ax jobs.
>
> Now that view is changing. A small but growing body of
> academic research suggests that living-wage laws do more good than
> harm. So far, they have imposed little, if any, cost to the 50 cities
> that have passed them, the studies find. And they have led to few job
> losses and have lifted many families out of poverty. ''I'm no longer
> ready to dismiss these policies out of hand,'' says David Neumark, a
> Michigan State University economics professor--and prominent
> minimum-wage opponent--who recently published empirical research
> showing a positive overall impact of living-wage laws.
>
> The fresh
> thinking is giving new ammunition to the living-wage movement, which
> has steadily gained momentum since its initial Baltimore success
> (table). Advocates, mostly grassroots religious and labor groups, are
> pushing for new laws in more than 70 cities and a dozen states. The
> success of living-wage ordinances also may spur efforts to lift the
> federal minimum wage, since the laws show little adverse job impact
> even from pay levels of up to $10.75 an hour in San Jose, vs. the
> federal minimum of $5.15.
>
> NO LOSS. The new research shows that
> living-wage laws don't cause many job losses because employers learn
> to live with them by trimming profit margins and finding efficiency
> gains from improved morale and lower turnover. Unlike the federal
> minimum, which covers most workers, living-wage ordinances apply only
> to employees of companies with city contracts. Studies of Baltimore,
> Los Angeles, and Detroit found no evidence of job losses.
>
> Neumark's research, which compares 12 cities with living-wage laws to
> a control group of cities without them, finds minimal job losses,
> which are more than compensated for by significant income gains among
> the lowest-paid workers. Even higher taxes aren't a necessary
> outcome. In Baltimore, city contracts have risen less than inflation,
> at 1% to 2% a year--mostly because contractor profit margins
> declined, according to a study by the Economic Policy Institute, a
> Washington think tank.
>
> The findings are analogous to a new
> perspective on minimum wages that emerged in the mid-1990s. Back
> then, several economists challenged conventional thinking with studies
> that found little or no job loss from higher minimum-wage levels, at
> least in a growing economy like the U.S. is enjoying today. However,
> since 1997, continued opposition from small business and congressional
> Republicans has blocked increases in the federal minimum, which is
> now 40% below the federal poverty line.
>
> Although the economic
> debates about living and minimum wages aren't exactly the same, the
> success of the former may boost efforts to lift the federal
> minimum. Already, Representative Luis V. Gutierrez (D-Ill.) has
> introduced a living-wage bill for federal service contracts. ''During
> a period of prosperity, when people are sleeping in cars after
> working a full day, paying a living wage is a basic matter of
> fairness,'' asserts Jen Kern, a director at the Association of
> Community Organizations for Reform Now (ACORN), a Washington advocacy
> group.
>
> Opponents disagree. Business groups argue that a living wage
> would be more expensive in a down economy and more disruptive if
> applied nationally, or even to workers not employed by city
> contractors. For example, the Santa Monica Chamber of Commerce argues
> that a proposed $10.69-an-hour living wage, which would apply to all
> companies in the city's coastal tourist zone, would force local
> businesses to close. Still, those arguments may carry less clout now
> that so many other cities have passed living-wage laws--and escaped
> the dire consequences.
>
> By Steven V. Brull in Los Angeles
>
> Table:
>
> Fifty cities and counties now require contractors to pay more than the
> federal minimum wage. Some leading cities:
>
> CITY/ COVERAGE HOURLY
> DATE PASSED WAGE LEVEL
>
> BALTIMORE Service contracts $7.70
> 1994 over $5,000
>
> LOS ANGELES Service contracts 8.97
> 1997 over $25,000
>
> SAN JOSE Service contracts 10.75
> 1997 over $20,000
>
> CHICAGO Contracts covering 7.60
> 1998 clerical, custodial,
> and other service
> workers
>
> DETROIT Service contracts 10.70
> 1998 over $50,000
>
> SAN FRANCISCO Airport and home-care $9, $10 in 2001,
> 2000 workers, and service plus 2.5% yearly
> contracts over $25,000 increases
>
> DATA: UNIVERSITY OF MASSACHUSETTS
>
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> This is the National Debate on System Reform. debate@indiapolicy.org
> Rules, Procedures, Archives: ../debate/
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--
Sincerely,
Vamsi M.
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This is the National Debate on System Reform. debate@indiapolicy.org
Rules, Procedures, Archives: ../debate/
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