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how minimum wage laws affect overall poverty
how minimum wage laws affect overall poverty
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Say you buy a t-shirt costing £29, do you know where that money goes? Astoundingly, only 18p will go towards the workers wage, that’s 0.6% of the money you paid. The rest of the money will go to retail, the brand, material costs, transport cost, intermediary, the factory owners and overhead costs. Did you know that was what you were paying for? If you did, would you have thought twice about whether to buy it or not? This shockingly low pay leads to workers not receiving a living wage, meaning that they cannot afford the basic necessities for everyday life. A living wage, by definition, means that the workers receive enough money to provide for themselves and their family. The United Nations Universal Declaration of Human Rights, Article …show more content…
This is because the legal minimum wage in garment-producing countries is far below the living wage, and the gap continues to grow as consumers demand cheaper clothing and the cost of living rises. The daily challenges for workers living in poverty is not limited to a lack of money. Other problems include a low calorific intake, limited access to health services, lack of social security, lack of decent housing, limited access to education and limited cultural and political life. One example of a country where the minimum wage falls far below the living wage is China, where the minimum wage is only £147.37 and the living wage is as much as £317.43. This means that workers would have great difficulty supporting their family and there would be no money left for …show more content…
They have calculated a living wage formula for Asia based on the assumptions that a worker is supporting themselves, as well as two adult dependants or one adult dependant and two to four children, that 50% of their wage goes towards food, that 40% goes to clothing, housing, travel costs, children’s education and health costs and that 10% goes towards discretionary income (i.e. entertainment, savings or pension). The Asia Floor Wage is calculated in PPP$(Purchasing Power Parity $) this is a hypothetic currency for World Banks based on peoples consumption of goods and services. This allows comparison of living standards across countries, regardless of currency. The AFW also carry out food basket research, this allows for a fair and relatively accurate living wage to be calculated. In order to reach a living wage, companies must include the principle of a living wage in their company policy, they must respect the freedom of association and work with unions and labour-rights groups. Companies have to publicly commit to a living wage bench mark, making it much harder for them to back down from it. It is important for companies to present a roadmap with a timeline for their payment of a living wage and to run programmes involving suppliers, trade unions and labour support groups as well as collaborating with stakeholders and acting transparently. There are different associations and
What is found at sweatshops though, is quite the opposite. The highest wage within a sweatshop goes to the senior operators. The already low salary of a sweatshop worker, is actually decreasing, as the median wage for a senior operator at a sweatshop decreased by 29 percent from 1994 to 2010. These senior operators are of the highest rank, and according to Niagara Textiles, located in Bangladesh, now earn only 20 cents an hour, or 488 dollars per year. In fact, the same sweatshop have reports of workers being beaten for asking to receive their pay on time. They are also forced to work 14 hours a day, 7 days a week, with one day off at most. These workers have the longest hours, worst treatment, and most tedious conditions and still barely get paid enough to sustain themselves, let alone families. Sweatshops are completely immoral, and are under complete violation of the codes of
The minimum wage was, as it should be, a living wage, for working men and women ... who are attempting to provide for their families, feed and clothe their children, heat their homes, [and] pay their mortgages. The cost-of-living inflation adjustment since 1981 would put the minimum wage at $4.79 today, instead of the $4.25 it will reach on April 1, 1991. That is a measure of how far we have failed the test of fairness to the working poor.” (Burkhauser 1)
Understanding the basic concept of minimum wage is important for every single individual. We all live in this world together, and it is obvious that there is an order. In order to continue our lives and afford our basic needs, we all need to work and gain wealth. As the old adage says ‘‘There ain’t such a thing as a free lunch. ’’
Understanding how the minimum wage level functions to affect poverty in a given society is crucial for informing policy in a number of important areas. Indeed, examining the link between poverty and the minimum wage is necessary for policy-makers working to establish sound economic policy as well as labour and social advocacy groups seeking to ensure the minimum wage is at a level sufficient to ensure workers can meet their most basic and fundamental needs. Readers should be concerned with the link between the minimum wage and levels of poverty because poverty is a particularly significant and impactful social issue. High rates of poverty can both negatively impact the economy, as well as contribute to a host of negative social issues. At the same time, there may be questions regarding the impacts to poverty associated with the minimum wage. Research which better clarifies this link is particularly important. For these reasons, investigating the link between the minimum wage and poverty is essential. This essay will provide a summary of two academic journal articles investigating the link between poverty and the minimum wage. Each summary will discuss the particular focus of researchers, the contribution of the study, the methodology employed by researchers, as well as their findings and conclusions. Finally, the essay will conclude with a brief commentary regarding the relevance of these articles to the larger topic, as well as their effectiveness in promoting learning.
The living wage movement is an economic reform movement that has become one of the most important public policy issues that has come up within the last 10 years. Although there is no single definition, it is often defined as an hourly salary that allows working families of four to have an income that is above the federal poverty line. This means that the livable wage laws often stipulate that hourly wages should be two to three times above the federal Mininum wage. However, unlike the Mininum wage, the living wage has so far only been enacted on the county and city level. Cities and counties enforce the living wage for companies that have contracts with their respective cities and counties, receive subsidies from their cities or counties, other economic benefits cities and counties provide to companies, and in some cases a livable wage is required for the tourist areas of the particular city. For cities and local governments, the livable wage is perceived as a measure to increase the welfare of the poor. However, like everything in life the livable wage creates its on costs that along with its benefits of increased wage to some low income earners.
Over the past decade, politicians have sought to reform the national poverty levels by lobbying for what is frequently referred to as a living wage. Living wages, on the most elementary level, are the absolute minimum a person must make per year or per hour to stay above the federal poverty level. While the number of people that receive living wages is still small, Wood (2002) suggests that this is a trend that is gaining momentum across the United States because it may help reduce employee turnover and increase worker productivity.
...o get their pay. The amount of people in the world who are in poverty are increase by the minute. If wages are increased like in Latin America, less people would be in poverty and would not need assistance from the governments. “European Commissioner for Development, Andris Piebalgs, commented: ‘...Big challenges lie ahead of us: ensuring that we achieve the Millennium Development Goals and make poverty a thing of the past. For the way forward we all need to work together - the global community should agree on an ambitious joint agenda for the eradication of poverty and sustainable development…’”(Europa). Poverty is a problem throughout the world, if every country acts together and pushes for no poverty, the people who work minimum wage would not experience this problem. Poverty would decrease and it would be as if it had never been a problem throughout the world.
The wage gap is a major issue that is constantly brought up in the work place. Numerous people use the term “wage gap” to state how gender can affect somebody 's income. There has always been an understanding that men typically made more money than women. For a long time, women were not allowed to work; therefore men were in charge of “bringing home the bacon”. However, times have changed and there are various situations where a household is centered off a women’s’ income. Females can become single mothers who have a responsibility to care for a child(s). Responsibilities can include monthly payments of water and electric bills and even weekly payments towards groceries. Women have to acquire enough money so that they are able
The gap in wealth between the rich and the poor continues to grow larger, as productivity increases but wages remain the same. There were changes in the tax structure that gave the wealthy tax breaks, such as only taxing for social security within the first $113,700 of income in a year. For CEOs this tax was paid off almost immediately. Free trade treaties broke barriers to trade and resulted in outsourcing and lower wages for workers. In “Job on the Line” by William Adler, a worker named Mollie James lost her job when the factory moved to Mexico. “The job in which Mollie James once took great pride, the job that both fostered and repaid her loyalty by enabling her to rise above humble beginnings and provide for her family – that job does not now pay Balbina Duque a wage sufficient to live on” (489). When Balbina started working she was only making 65 cents an hour. Another huge issue lies in the minimum wage. In 2007, the minimum wage was only 51% of the living wage in America. How can a person live 51% of a life? Especially when cuts were being made in anti-poverty and welfare programs that were intended to get people on their feet. Now, it seems that the system keeps people down, as they try to earn more but their benefits are taken away faster than they can earn. Even when workers tried to get together to help themselves they were thrown
Linda Lim, a professor at the University of Michigan Business School, visited Vietnam and Indonesia in the summer of 2000 to obtain first-hand research on the impact of foreign-owned export factories (sweatshops) on the local economies. Lim found that in general, sweatshops pay above-average wages and conditions are no worse than the general alternatives: subsistence farming, domestic services, casual manual labor, prostitution, or unemployment. In the case of Vietnam in 1999, the minimum annual salary was 134 U.S. dollars while Nike workers in that country earned 670 U.S. dollars, the case is also the similar in Indonesia. Many times people in these countries are very surprised when they hear that American's boycott buying clothes that they make in the sweatshops. The simplest way to help many of these poor people that have to work in the sweatshops to support themselves and their families, would be to buy more products produced in the very sweatshops they detest.
Standard of Living, in a purely material dimension is the average amount of GDP per person in a country (therefore determining access to goods and services). However the term has a much broader, non-material dimension involving issues of quality of life and are therefore much more difficult to quantify. There is no single measure of SoL, but a range of indicators, which can be used together to give a good idea of a countries’ SoL. Reasons for GDP figures alone giving an incomplete understanding of SoL in a country will be explained in this essay, along with problems faced when comparing levels of development between countries.
Americans do not realize the amount of clothing we wear on a daily basis is actually made in Cambodia, such as Adidas and even the Gap. The women that work for these sweatshops in Cambodia sew for 50 cents an hour, which is what allows stores in America, such as H&M to sell inexpensive clothing (Winn, 2015). The conditions these Cambodian workers face are a noisy, loud, and extremely hot environment where people are known for having huge fainting attacks. When workers were on strike a year ago, authorities actually shot multiple people just because they were trying to raise their pay. There is plenty of evidence of abuse captured through many interviews of workers from different factories, and is not just a rarity these places see often or hear of. Factories hire children, fire pregnant women because they are slow and use the bathroom to much, scream at regular workers if they use the toilet more than two times a day, scam hard working employees with not paying them their money they worked for and more, and workers are sent home and replaced if 2,000 shirts are not stitched in one day. Expectations are unrealistic and not suitable for employees to be working each day for more than ten
The low income workers who receive public assistance will seem to make more in wages but will lose money from what public assistance they were also collecting causing them to request working less hours to maintain what they would have received from public assistance. A worker with children who is paid $7.25 an hour will have a higher income than if they were paid a higher wage, but because at the higher wage they will lose the public assistance such as food stamps, welfare, and other benefits because of making the higher wages. This is causing people to request to work less hours so they can receive their public assistance benefits. Who seems to gain the most from a living wage requirement is the public employee who is in a union as their involvement with the union is a form of protection in the job market. The living wage laws can and will have negative effects as they can in certain job markets reduce employment opportunities for the low skilled workers or the workers without a higher education. Some employers will be forced to eliminate some job opportunities because they will not be able to produce enough profit to be able to or justify to having to pay the higher wage. The hardest hit will be the mom & pop or non-chain stores as they do not have the backing or income to support
In 1997, after ejecting the Conservative Party at the elections, the Labour government made the introduction of a minimum wage its first priority. As a result of the National Minimum Wage Act of 1998, the Low Pay Commission (LPC) was established. This commission is an independent body composed of 9 Low Pay Commissioners representing the different social partners with people chosen amongst employees, employers or with an academic background. The comm...
Market economies, as a whole, inherently and inevitably lead to poverty and a large class disparity. In a capitalist society, the ones who supply labor, the ones who work the hardest, are the ones who are paid the least. The owners, who are already rich, receive most of the profit and accumulate large masses of wealth. “Under capitalism workers receive only a small fraction of the wealth that they alone produce, while the lion’s share goes to the capitalist owners and to the bankers, landlords, insurance companies, lawyers, politicians, and all the other parasites who live off the back of labor and perform no useful work.” (SLP). Thus laborers are paid much less than the value of the labor that they contribute. As Karl Marx said, this is stealing, or exploitation of labor. The wages for...