The United States is the not the only country with minimum wage, about 75% of the European countries have some sort of minimum wage for their workers, the majority of the countries in Asia also have a minimum wage (Japan, China, Indonesia, Thailand, Cambodia, South Korea and Vietnam, to name a few). Canada has a minimum wage, however different areas have different wages. Africa and South America are the two continents that are really lacking minimum wages, the majority of the countries in those two continents don't have any minimum wage for their workers. Due to globalization, the disparity between the rich and poor, especially in developing countries like India and China, has been growing exponentially. Companies in the U.S have been outsourcing jobs to these countries for very low wages, and many of the workers there are being left in the dust. A global minimum wage would help the low-wage earners rise up, closing the gap between the rich and the poor. A global minimum wage would also help U.S workers keep their jobs in America, because if companies have to pay workers the same throughout the world, they might as well stay in America(1).
France has the highest minimum wage in Europe and possibly the world. According to the European Industrial Relations Observatory(EIRO), France's hourly wages for workers is 7.61 Euros and the monthly wage is 1,286.09 Euros. Converted to U.S dollars, that is about $10.78 per hour and $1,796.12 per month(2). Compare this to the hourly federal U.S minimum wage of $5.85, France's wage is over twice as much as ours. Most of the other European countries have a wage similar to France, give or take a few cents. A global wage in Europe would have to be very high in order to support the workers there, because their costs of living are so high, especially in countries like Spain, France and Britain.
Many Asian countries have a minimum wage, however it differs from country to country. For example, Vietnam and South Korea have a single minimum wage for the whole country, however other countries like Japan, Cambodia, China, Thailand and Indonesia have decentralized minimum wage systems. That means that the government doesn't necessarily control the minimum wage, organizations and companies do. A global minimum wage would help many workers in these countries, because many workers, including children, are being exploited for their cheap labor(5).
Canada also requires its provinces to pay its low-wage workers a minimum wage, although this amount varies from province to province. Canada's provinces are very generous to workers, the lowest amount a worker can be paid is $7.25 a hour in New Brunswick, which is still very high, considering only a few states in the U.S have a higher wage than $7.25. Canada also has some regulations on who gets paid what, for example, in British Columbia, workers will only be paid $6.00 a hour for their first 500 hours of work, and after they complete that then they will be paid $8.00 a hour. If a global minimum wage is set, maybe regulations could be set like Canada's(3).
South America and Africa, the poorest continents in the world, do not have minimum wages for their countries. In Africa, the only country that has one is South Africa and there has been many arguments over black worker's rights there. A global minimum wage would certainly help many workers on these two continents. Companies and employers would be forced to pay their workers a decent wage, so that they can live out of poverty. At this time, the majority of Africa lives in poverty, the same with South America. The yearly income of some families can be about $200, which is not nearly enough to support a family. A global minimum wage would certainly help these families, and maybe take a large portion of the population out of poverty(4).
In conclusion, a global minimum wage would certainly benefit countries in South America, Africa and some in Asia. Companies would be forced to respect their worker's rights, by paying them a decent wage to live off of, hopefully taking some families around the world out of poverty. The World Trade Organization(WTO) would be a good organization to help introduce and regulate the world's minimum wage, however it is an idea that is met with mixed feelings(1).
1. http://www.sinceslicedbread.com/idea/19708
2. http://www.eurofound.europa.eu/eiro/2005/07/study/tn0507101s.htm#contentpage
3. http://www.gov.mb.ca/labour/labmgt/resbr/wages/minwage.html
4. http://www.ruralpovertyportal.org/english/regions/africa/index.htm
5. http://www.amrc.org.hk/4207.htm
Cartoon from http://thinkprogress.org/wp-content/uploads/2006/04/WJLA041406160019.jpg
5 comments:
While the global minimum wage sounds like a good idea to stop exploitation, I have to wonder how feasible it really is. Countries that have minimum wages always take into consideration the cost of living in certain areas. Since Hawaii has high rent and an overall high cost of living, the minimum wage here is around seven dollars. But if you moved to place like Idaho where the cost of living is much lower, a person getting paid seven dollars an hour would be much more well off. And then if you leave the united states entirely and worked in a place like china for seven dollars, well, you'd be living like a prince. That is, until massive world wide inflation caught up with you. It wouldn't actually help people that much to set global minimum wage at say, 8 dollars, because currency would devalue quickly. Perhaps it would be a better plan to require a global minimum wage but not set the amount of money that it has to be. Although I wholeheartedly agree that exploitation should be stopped, I also wonder about the economic effects of setting a minimum wage everywhere. Prices for many manufactured goods would rise considerably, as would agricultural products. But I suppose that this is a small price to pay for equality.
oh, post by Mari Miyoshi
I'll have to agree with Mari. A global minimum wage, as benevolent and nice as that sound, is completely impractical within today's world.
Here are some problems I foresee:
--Enforcement. Currently no global political body exists that could force every country to participate (even the UN couldn't do this).
--Inflexibility. The wage would be inflexible and too high/too low in some countries.
--Inflation. The entire world would suffer an economic shock.
--Business crashes. Millions of businesses, unable to pay for their workers would have to close.
I have to go to class.
I agree. It would also be more difficult to figure out nominal verses real dollars, as Mari explained, in various countries because each region has its own standards.
I think that economists should consider the impacts of businesses everywhere. We have to remember that America is such a great place to live economically because we have cheap labor, and because people in other countries are willing to work for us. Are we, as Americans, willing to give up luxuries for the benefit of people who sew our clothes?
I definitely agree with what you are saying. If other 3rd world countries begin instituting minimum wages in their countries it will benefit our country indirectly as well. Bigger United State’s companies will have to pay workers form other countries the same wage as workers from the United States, giving more work opportunities for those in our country. This will be beneficial for both people in developing countries and the majority of people in the United States. This change could also create less division and disparity between the rich and poor in our country. Because wealthy owners of huge corporations will have to pay more for labor, they are distributing a more equal playing field for wealth between rich, poor, and middle income families. This change has a lot of potential.
-kelly
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