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## Relationship Between Law of Demand and Supply and National Minimum Wage

Introduction

Supply and demand are one of the basic models of economics and they are main characters of a financial system. Demand means how much quantity of the service or product customer is willing to buy. At constant factors, price of the product increases or decreases as its demand increases or decreases respectively. While supply means the quantity of services or goods, producers willing to supply to consumer at certain price. At constant factors, quantity of products supplied increases as price of the product increased.

## The Law of Demand

According to the ‘Law of Demand’, “Higher the price of the product results in less demand as less people wants to buy it, at the constant factors.” Graphically we can present the Law of Demand as below,

In figure 1, A, B and C are points on the demand curve. Every point on the curve shows a direct relationship between amounts of the products demanded (Q) and price (P). So, at point A, the quantity demand will be Q1 and the price will be P1, and so on. The demand relationship curve shows the negative relationship between price and quantity demanded. The higher the price of a good the lower the quantity demanded (A), and the lower the price, the more the good will be in demand (C).

## The Law of Supply

According to the ‘Law of Supply’, “Higher the price of the product results in high supply of the quantity of the product.” Because higher supply of the product at high price the revenue is maximum. Graphically we can present the Law of Supply as below,

Figure 2: The Law of Supply

In figure 2, A, B and C are points on the supply curve. Every point on the curve shows a direct relation between quantity supplied (Q) and price (P). At point B, the quantity supplied will be Q2 and the price will be P2, and so on.

## Equilibrium

It is the point, at which quantity demanded and supply of the goods are same or equal. At equilibrium distribution of products is more effective because amount of the product supplied is exactly the same as the quantity of the product demanded. Graphically we can present the Equilibrium condition as below,

Figure 3: Equilibrium

At the point of intersection of the supply and demand curve equilibrium takes place. At this point, the price of the goods will be P* and the quantity will be Q*. This figure is referred to as equilibrium price and quantity.

## National Minimum Wages

A minimum wage is the least monthly, daily or hourly that employers should pay legally to the employees. Workers in Britain were sheltered for the first time on the last nine months of 20th century by ‘National Minimum Wages’. With the intention of the recommendation to the rate of ‘National Minimum Wages’ in 1997 the ‘Low Pay Commission’ was established. Low Pay Commission is a kind of social partnership made up of three employer representatives, three worker representatives and three independent members, whose suggestions have been always agreed and government has always executed the suggested National Minimum Wages. National Minimum Wages has been restructured seven times, since April 1999.

## History – UK’s Minimum Wages

In 1909 wages had always been synchronized by borough, but in 1909 the ‘Liberal government’s Trade Boards Act’ formed the first national system of wage law. The act made four’ Trade Boards’ that set minimum wages which were different in different industries.

In 1945 after the war, the Trade Boards, which is now well-known as ‘Wages Councils’ broaden their power. Previously only relevant to industries where communal bargaining was weak, they were now broader in scope.

In 1986 the Wage Council system had grown-up during the mid 20th century, in 1980s there were 26 councils, covering 2 million workforces, primarily in low paid jobs like trade. In 1986 the Conservative government decreases the influence of the councils and prevents new ones from being starting, with the Wages Act.

In 1993 wage Councils are eliminated, due to resistance from trade unions, who favoured to practice group bargaining.

In 1998 ‘The Labour government’ established ‘The National Minimum Wage Act’. Trade unions, which in 1979 had characterized 55% of the employees, had been able of bargaining wages by group bargaining. But in 1999 less than one in four employees were unionised, and a national solution was projected. The policy is resisted by Conservatives.

In 1999 ‘The national minimum wage’ executed. ‘The Low Pay Commission’ judges the best rate to be ?3.60 an hour for labours who are 22 and above.

In 2009 Conservative backbencher Christopher puts forward a private members’ bill that suggested allowing workers to “optimum output” of the minimum wage

In 2010 on 1st October 2010 the wages increased to ?5.93, and the age at which meet the criteria for the top rate becomes 21 for the first time. A minimum wage for apprentices is also established, at ?2.50 per hour.

## Main principles to highlight the ‘National Minimum Wages’:

It must be “enough to permit labours to sustain in vigorous existence. Hence, the wage must be designed on what the employees need for physical health and competence, and not what the trade will stand”.
The “law have to be national, that is it should apply to the entire country”.
It is to be a “nationwide least of real wages that worked out in its cash comparable will balance all local disparity in cost of livelihood”

## Arguments in favour of ‘National Minimum Wages’

The primary aim of National Minimum Wages is to decrease poverty and decrease the differences in pay. Another intention of National Minimum Wages is to cut the misuse of low paid labours.

### Potential Economic and Social Benefits

Higher tax revenues

Due to increase in the wages of low salaried jobs ,income tax and national insurance contribution is increased.

State benefits would cost less

Benefits like income support and benefits in council tax will be required less.

A reasonable distribution of income across the people

The primary reason of poverty contributes to increasing crimes. Argument is able to provide the employees reasonable pay for their work.

Increasing productivity of labour

Firms will have an inducement to lift the yield of workforce if they pay the minimum wage. This will lead to better investment in the human capital.

## Reduction in labour turnover

Increased salary can decrease the labour turnover and rate of absence and can lead to motivate the labours to work to improve efficiency and reducing the expenses on turnover of employees.

Potential earnings from the ‘National Minimum Wages’

Figure 4: Potential earnings from the ‘National Minimum Wages’

The National Minimum Wages in the figure 4 is put over the standard free market wage rate for a given job. Total employment reduced from point E1 to point E2 (expressing a loss of income for those who lost the jobs). At point E2, there is an increase in the income of those who stay in work.

Arguments against of ‘National Minimum Wages’

Increase in marginal cost of employment

A National Minimum Wages put higher than the free-market wage for certain groups lifts the marginal cost of employing workers. So organisations will reduce jobs, cut down the hours of work and unemployment will increase.

Pay leap-frogging

Other labours will demand more wages to maintain differentials in pay, which will result in cost-push inflation and adversely affect the competitiveness of UK producers in terms of price in international market.

Increased unemployment

Low-skilled labours and young persons will be replaced by experienced older labours resulting into increase in unemployment.

Cost of training

Some organisations will try to cut the cost on training of employees because of falling rate of profit.

Distortionary effect

A National Minimum Wages does not take into consideration local disparity in cost of living and will result in distortionary effect in the UK labour market.

The impact of a minimum wage on employment

Figure 5: The impact of a minimum wage on demand and supply of labours

The impact of a minimum wage on employment points depends in part on the ‘elasticity of demand’ and ‘elasticity of supply’ of employment in dissimilar businesses. If workforce demand is comparatively inelastic then the narrowing in employment will be less harsh than if employers’ demand for workers is elastic with respect to changes in the income level.

Effect of the National Minimum Wage in Industries

According to, a report of ‘The Confederation of British Industry, (CBI) which gave the capable support to the National Minimum Wage, some key issues were as given below:

There are not much evidences showing major impact on employment or unemployment.
There are no visible errors upwards in typical earnings.
There are some impacts of the National Minimum Wage on wage differentials directing towards the higher rates for workers. But it is only applies to thirteen percents of organisations.
Exemption of under eighteen year olds from any minimum wage has been proven as useful for employers.
To balance the cost of the minimum wage, some organisations have adopted work practices by making staff multi- skilled in their job.
References:-
http://www.britannica.com/EBchecked/topic/156920/demand-curve
http://www.britannica.com/EBchecked/topic/574671/supply-curve
http://wrap.warwick.ac.uk/1560/1/WRAP_Stewart_twerp630.pdf
http://www.totalpolitics.com/blog/28013/history-of-the-uk-s-minimum-wage.thtml
http://www.lowpay.gov.uk/lowpay/report/pdf/Revised_Report_PDF_with_April_date.PDF
http://www.direct.gov.uk/en/Employment/Employees/TheNationalMinimumWage/DG_10027201
http://www.investopedia.com/university/economics/economics3.asp
http://www.investopedia.com/terms/d/demand.asp
http://www.investopedia.com/terms/s/supply.asp
http://www.hmrc.gov.uk/paye/payroll/day-to-day/nmw.htm
http://tutor2u.net/economics/content/topics/poverty/minwage_for.htm

http://tutor2u.net/economics/content/topics/poverty/minwage_against.htm

Categories

## thesis statement example – pros and cons of minimum wage uk

Introduction

The National Minimum Wage represents a minimum amount, usually per hour, that most workers are entitled to receive for their labour. The introduction of the minimum wage has the objective of improving income equality, especially for those with fewer skills.

The National Minimum Wage Act 1998 was introduced to the United Kingdom by the Labour Party, ensuring that almost all workers receive a certain remuneration for work performed (BIS, 2011) and is reviewed yearly by the Low Pay Commission (LPC). Not all UK workers are entitled to the minimum wage, with the self-employed and those of compulsory school age being exempt from the incentive. By definition, not all people in the country receive the minimum wage rate, however the employment law enforced by the Department of Business, Innovation, and Skills (BIS) aims to ensure that all employees over the age of 16 receive a minimum wage.

The UK Government proposes that the National Minimum Wage protects low-income workers from low rates of pay, and provides greater incentive to work (BIS, 2011). Additionally, the BIS (2011) claims that the minimum wage ensures that business competitiveness results from the quality of goods and services rather than low prices enabled by low pay. Estimates put the proportion of UK working age individuals receiving the minimum wage at between four and six percent (LPC, 2007).

The minimum wage has been proposed to improve the wage of the lowest earners of an economy, something that has been evident in those in the bottom half of the earnings distribution in the United States (diNardo et al., 1996; Lee, 1999). In the 1980s, the US minimum wage was fixed at a nominal level, therefore declining in relation to average earnings. This subsequently caused a dramatic rise in wage inequality for those workers in the bottom half of the wage distribution (Dickens & Manning, 2004). These observations demonstrate the effectiveness of a minimum wage on improving wage equality at bottom end of the spectrum.

HM Revenue and Customs (HMRC) enforce the adherence of businesses to the National Minimum Wage, and those employers found to be incompliant will face legal action. On a case-by-case basis, criminal proceedings may be enforced if employees commit any offences under the act. Such offenses include refusing to pay the minimum wage, failing to preserve or forging related records, and obstructing any investigation. Criminal proceedings may include a fine, and additionally the HMRC are able to seize property to obtain and enforce the minimum wage jurisdiction (BIS, 2011).

Despite the introduction of the minimum wage as an employment law in the UK, not all employees receive a minimum wage. The National Minimum Wage Compliance Strategy (BIS, 2010) identified over 23,000 workers that were not paid the minimum wage in 2008/2009. Employee’s tactics to avoid paying this include keeping two sets of books, using accountants to falsify records, and failing to produce detailed records in effort to avoid conviction by the HMRC (BIS, 2011).

Identification of these employees meant that it was possible to ensure payment in arrears for the neglect of the minimum wage. Whilst this is a positive outcome, and these neglected workers receive their entitled wages, ensuring employer compliance with the minimum wage is still a main governmental pursuit (LPC, 2012). The Low Pay Commission are continually identifying employers that are not paying their workers the minimum wage (937 cases in 2010/11). Additionally, data show that in April 2011, approximately 233,000 UK adults were paid less than the minimum wage (LPC, 2012).

Not all individuals receiving less than the prescribed minimum wage (currently ?6.08 p/h for over 21s, ?4.98 for 18-21 year olds [HMRC, 2012]) are doing so against the minimum wage employment law. Exceptions include workers who have accommodation provided by their employer, apprentices and interns. One group particularly vulnerable to not receiving the national minimum wage is migrant workers. Research has shown that migrant workers have filled gaps in the UK labour market, however have also put downward pressure on wages at the bottom of the distribution, which have been prevented from falling further by the national minimum wage. The existence of a minimum wage to prevent wages falling further has positive implications for native workers, meaning they do not fall subject to lower wage rates. It also however, means that wages are unable to fall to a rate at which supply meets demand potentially leading to an increase in unemployment for those in unskilled jobs. The implications of the minimum wage for unemployment are not constrained to the presence of migrant workers, and this will be discussed in more detail later on. As well as having an impact on the labour market, migrant workers have been shown to be examples of people in the country receiving less than the prescribed rate. Research by French and Mohrke (2006) found that some employers of migrant workers put various charges on their salaries, reducing wages below the minimum wage, and deducting accommodation fees that were in excess of the legal allowance. The exploitation of migrant workers was further highlighted by Moore and Watson (2009) who discovered that they were at risk from low wages, unclear payslips and unauthorised deductions from wages.

It is therefore clear that the introduction of a national minimum wage in the UK has not provided everyone in the country with a wage above the prescribed rate, however the Government measures and implemented compliance enforcing techniques are further insuring that those entitled are receiving the minimum wage.

There is considerable evidence to show a compression of the lower wage distribution and therefore improvement of wage inequality as a result of the introduction of a national minimum wage. Machin et al. (2003) investigated this effect in the care home industry, a low-wage heavy sector, finding that the minimum wage had a sizeable impact on wage dispersion. The inequality between those earning in the 10th percentile (the lowest paid workers) and the 50th percentile (mid pay-range) reduced from 21% to 9%. There was no change between wages in the 50th and 90th percentile (a 34% gap). This effect is replicated in the UK labour market, with Butcher, Dickens and Manning (2012) finding evidence that income inequality at the bottom of the wage distribution since the introduction of the minimum wage. These findings demonstrate a ‘greatness’ of the minimum wage in achieving the Government’s aim of protecting the lowest earners from low wages, and achieving a more equal wage distribution.

Despite evidence of the desired effects on wage equality, the ‘greatness’ of the national minimum wage is something that has received debate since its introduction, with both scepticism and support for its effect on the UK labour market and economy.

Economic theory would suggest that in certain economic conditions, such as a recession, a national minimum wage would inflict a negative impact on employment, with employers being unable to afford workers and these workers being unable to offer their services for a lower wage to escape unemployment. Additionally, there is some evidence to suggest that employers substitute their unskilled workers for increased use of technology (Bullock et al., 2001; Gilman, 2002) to maintain productivity.

Despite this, investigations into the rate of unemployment have shown few effects of a wage floor on jobs (Petongolo & Van Reenen, 2011). The LPC acknowledges the existence of a pay level that would ‘destroy’ large numbers of jobs and aims to ensure that the minimum wage does not rise to this level (Manning, 2012). The LPC does, however, highlight several issues that have arisen in the labour market as a result of the minimum wage, which may compensate for not cutting employment rates. These responses to increased labour costs include cutting overtime hours, decreasing annual leave entitlement and pensions, merging pay zones, and reducing working hours (LPC, 2011). Although keeping individuals employed, these compensatory measures may mean that workers are not actually receiving a gain from the introduction of a minimum wage. However, the LPC subsequently states that reduced hours have not affected weekly earnings.

Another viewpoint is that the minimum wage actually encourages people into the workforce by providing increased incentive to work. For the voluntarily unemployed, it becomes more beneficial for them to enter into work instead of receiving unemployment benefits. This may explain why any effect of the minimum wage on employment levels in low-earners has been negligible (Manning, 2012).

It is also important to consider the effects of having to pay a minimum wage on the employers. Some businesses have responded to the minimum wage by increasing their prices, or accepting a lower profit margin (LPC, 2011). This may have implications for demand for products, and lower profits will have implications for investment in technology, advancements and training, as well as business growth. Consequently, a slowing in business growth has implications for employment, living standards, and consumer confidence (Riley, 2006). Whilst employers may suffer with increased labour costs, the minimum wage has also been suggested to have an impact on the productivity of workers. Standard neo-classical models would suggest that when introducing a minimum wage, all workers producing an output (marginal product) below that of the wage rate would likely be dismissed, as the firm substitutes labour for capital. The productivity of the workforce would therefore rise, as the same level of output would be required from fewer labour inputs (Forth & O’Mahoney, 2003). If this scenario holds true, it is evident again that unemployment would likely increase. Alternatively, as suggested by efficiency wage theory (Rebitzer & Taylor, 1995), employees may increase their marginal product in response to increased motivation from higher wages. This may also occur as a result of further employer supervision of effort as employers seek to protect their increased investment. Additional hypotheses suggest that to avoid dismissal, workers seek to increase their skills and education and therefore the quality of their output (Cubitt & Heap, 1999). This has positive implication for employment, as employers will not need to dismiss any workers and therefore output would rise equally with labour costs (Forth & O’Mahoney, 2003).

Opposing theories claim that rather than providing incentive to gain skills and remain in employment, the guarantee that all workers receive above a minimum amount will lead to lack of labour force skill development. It has been proposed that this occurs because young unskilled workers are enticed out of education and training and into the job market (Neumark & Wascher, 2008) something that has been shown in other countries. The UK’s LPC are concerned that there not be an incentive for young people to leave training (Croucher & White, 2011) and additionally have observed that the decision of young adults to stay in full-time education has been unaffected by wage rates (De Coulon et al., 2010).
Whilst the improvement of pay inequality at the bottom end of the wage distribution cannot be disputed, raising the pay of low skilled workers may lead to the demand for companies to ensure the maintenance of pay differentials as higher-up workers insist on pay rises. In a case study, (Denvir & Loukas, 2006) found that 56% of companies interviewed had changed their hourly pay rates for those earning above the minimum wage in order to maintain wage differentials. This puts further pressure on companies’ labour costs and pressure to maintain employment levels, prices and profits. Whilst the minimum wage is pulling the lower skilled workers out of poverty, it may seek to push the wages of those greater skilled and earning employees even higher, and thus furthering inequality at the between those earning in the middle and top percentiles. This is something noted by Manning (2011) who asserts that it is those earning in the middle part of the income distribution that are feeling the real squeeze in their incomes. Although the minimum wage serves to protect those at the lower end of the wage spectrum, those earning higher rates may also be pushed out of employment or forced to absorb the work of lower skilled workers as employers are forced to make redundancies.

The introduction of a national minimum wage means that all workers meeting the criteria, regardless of location within the country, are entitled to receive the minimum rate or above. This has implications for those living in more expensive regions of the UK, where the minimum wage has greater ‘bite’, reaching further up the wage distributions in certain geographic regions than others (Stewart, 2002). This therefore means that the effect of the minimum wage and way that it works will differ in each geographical area. Some theorists argue for a regional variation in minimum wages (Smith, 2006), founded on the argument that employment and company efficiency in certain regions may be adversely affected by a minimum wage rate that is above the region’s productivity levels (Dolton et al., 2008). For example, whilst a higher minimum wage may be applicable in a highly competitive and productive capital city, this wage rate may not be sustained in a rural community with lower costs of living. It must also be appreciated however, that productivity, unemployment and employment rates have varied across regions from well before the inception of the minimum wage. Investigation by Dolton et al. (2008) elucidates the impact of regional variation on minimum wage effects, showing that areas where the minimum wage has a larger bite experienced larger declines in the 50th percentile- 5th percentile wage ratios than elsewhere. They additionally found that these areas were more susceptible to higher rates of unemployment in the first few years of the minimum wage introduction, which then reversed with these areas experiencing lower rates of unemployment in the years to follow.
Additionally, the discrepancy between the minimum wage bite between geographical regions does not just have implications for the labour market as a whole, it also affects individual workers differently. Whilst the wage has been introduced to reduce poverty, increase living standards and inequality amongst the low skilled workers, it seems ironic that this may be a case more greatly than for others dependent on where they live. Consider the case of a set of twin brothers, who both work as toilet attendants. On the minimum wage, twin A, who lives in Northumbria has a purchasing power 10% greater than twin B, who lives in greater London, meaning that twin B has to work an eleven days to be able to purchase the same goods as twin A (Office for National Statistics, 2010). Disparity such as this has been recognised by the UK government, reflected in the introduction of the London Living Wage, whereby London address holder employees of Greater London Authority member companies (such as the NHS) benefit from an increased wage rate.

Overall, the ‘greatness’ of the minimum wage can be seen in its assurance that no employees of working age will be subjected to low or unfair wage rates. The national minimum wage ensures that no members of the labour force need live in poverty, although the regional variations in such a statement have implications. The quality of life and fairness for individuals provided by the minimum wage is of great importance, and this is something that is emphasised by the UK government’s efforts to ensure compliance to the minimum wage jurisdiction. Despite benefit for many individuals, a national minimum wage presents many implications for countries’ labour markets and economies. The results of these implications can be controlled with an effective wage floor rate, and the issue of balance should be carefully considered and monitored by any regulatory body.

References

Bullock, A., Hughes, A., & Wilkinson, F. (2001) The Impact of the National Minimum Wage on Small and Medium Sized Businesses in the Cleaning and Security Sectors, Cambridge: Centre for Business Research.

Butcher, T., Dickens, R., & Manning, A. (2012) “The Impact of the National Minimum Wage on the Wage Distribution”. Research Report for the Low Pay Commission.

Croucher, R. & Rizov, M. (2011) The Impact of the UK National Minimum Wage on Productivity by Low-paying Sectors and Firm-size Groups. Research Report for the Low Pay Commission.

Cubitt, R. & Heap, S. (1999) Minimum wage legislation, investment and human capital, Scottish Journal of Political Economy, 46, pp. 135-57.

De Coulon, A., E. Meschi, E., Swaffield, J., Vignoles, A., & Wadsworth, J. (2010) Minimum Wage and Staying-on Rates in Education for Teenagers. Research Report for the Low Pay Commission.

Denvir, A. & Loukas, G. (2006) The Impact of the National Minimum Wage: Pay Differentials and Workplace Change. Research Report for the Low Pay Commission.

Department for Business, Innovation and Skills (2011) National Minimum Wage Annual Report for 2010/11. London: Crown Copyright.

Department for Business, Innovation and Skills (2010) National Minimum Wage Compliance Strategy. London: Crown Copyright.

Dickens, R., & Manning, A (2004) Has the national minimum wage reduced UK wage inequalityJournal of the Royal Statistical Society A, 167, 613-626.

diNardo, J., Fortin, N., & Lemieux, T. (1996) Labour market institutions and the distribution of wages, 1973-1993: A semi-parametric approach. Economertrica, 64(5), pp. 1001-1045.

Dolton, P., Rosazza-Bondibene, C. & Wadsworth, J. (2008) The Geography of the National MW, Report for the Low Pay Commission.

Gilman, M., Edwards, P., Ram, M. & Arrowsmith, J. (2002) Pay determination in small firms in the UK: the case of the response to the National Minimum Wage, Industrial Relations Journal, 33(1), pp. 52- 67.

HM Revenue and Customs (n.d) The National Minimum Wage [WWW] HM Revenue and Customs. Available from: http://www.hmrc.gov.uk/paye/payroll/day-to-day/nmw.htm [Accessed 01/08/2012].

Forth, J., & O’Mahoney, M. (2003) The impact of the national minimum wage on labour productivity: An analysis using industry data. Research Report for the Low Pay Commission.

French, S., & Mohrke, J. (2006) “The Impact of ‘new arrivals’ upon the North Staffordshire labour market”. Research Report for the low Pay Commission.

Lee, D. (1999) Wage inequality in the United States during the 1980s: Rising dispersion or falling minimum wageQuarterly Journal of Economics, 114(3), pp. 977-1023.
Low Pay Commission (2007) National Minimum Wage, Low Pay Commission Report. London: Crown Copyright.

Low Pay Commission (2011) National Minimum Wage, Low Pay Commission Report. London: Crown Copyright.

Low Pay Commission (2012) National Minimum Wage, Low Pay Commission Report. London: Crown Copyright.
Machin, S., Manning, A., & Rahman, L. (2003) Where Minimum Wage Bites Hard: The Introduction of the UK National Minimum Wage to a Low Wage Sector. Journal of the European Economic Association, 1(1), pp. 154-180.

Manning, A. (2011) Wage inequality and job polarization show that it is time to be pursuing from the highest-earners to those with middle and lower incomes. [WWW] British Politics and Policy at LSE. Available from: http://eprints.lse.ac.uk/38319/ (Accessed: 01/08/2012).

Moore, S., & Watson, M (2009) UNISON Migrant Workers Participation Project Evaluation Report. London: UNISON Communications Unit.

Neumark, D. & W. Wascher, (2008). Minimum Wages. Cambridge: MIT Press.

Office for National Statistics (2010) UK Relative Regional Consumer Price levels for Goods and Services for 2010. Office for National Statistics.

Petrongolo, B., & Van Reenen, J. (2011) The level of youth unemployment is at a record high. Policy makers should focus on strengthening and refining welfare-to-work and education-to-work programmes and forget about caps on immigration or reductions in the minimum wage which would do nothing to help. [WWW] British Politics and Policy at LSE. Available from: http://eprints.lse.ac.uk/38022/. (Accessed: 01/08/2012).

Rebitzer, J., Taylor, L. (1995). The consequences of minimum wage laws: Some new theoretical ideas. Journal of Public Economics, 56, pp. 245-255.

Riley, J (2006) AS Macroeconomics/ International Economy [WWW] Tutor2u. Available from: http://tutor2u.net/economics/revision-notes/as-macro-economic-growth.html {Accessed: 01/08/2012}.

Smith, D. (2006) Does Britain Have Regional Justice or Injustice in its Government Spending and Taxation?, Economic Research Council Digest, 37(1), pp. 9-26.

Stewart M. (2002) Estimating the impact of the minimum wage using geographical wage variation, Oxford Bulletin of Economics & Statistics, 64(5), pp. 583-606.

Categories

## Low-Wage Workers

It is not easy being a low-wage worker. In my case, I am a family man. I have a wife who just stays at home without any source of income and two kids who go to school. Sad to say, I am among the 30 million workers who earn less than \$9 an hour. The truth is I do not want to be a low-wage worker but I do not have a choice. I never went to college. What kind of jobs is in store for high-school graduates only? If you want to know the answer, just look at me now.

I was hired because I was referred by a friend who used to work for the company I am working for at present. Not that I did not have the qualifications for the job, but nowadays, referrals help a lot. After filling out the standardized bio-data, I was called for interview directly. Drug tests were not required. My employer is Chinese and runs a family business, so most of the higher positions are held by family members except for some employees who have worked their all their lives.

The one who interviewed me was the Executive Vice-President of the company who happens to be the wife of the President. She was kind. Not the type I expected to be. She was very calm in asking questions, as if I have known her for a long time. I did not feel very uncomfortable. She encouraged me to speak my thoughts, which was good because I need not worry too much about what to say. Our relationship at present is fairly good. But still my sentiments of a low-paying job with almost no benefits remain to cause me more difficulties in life. I keep on asking myself, “When will I get out of this dead-end job?”

My fellow employees come in two categories: the well-paid workers with benefits and those who are like me with minimal benefits. I am not counting the employed family members because of course, the get good pay. Those who have higher positions usually have graduated from college with good to excellent scholastic record. These are the employees who possess innate, learned, and transferable skills. There was some who just finished high-school but they have special skills which are indispensable in the company.

The ones like me are graduates of high-school only, with limited skills and abilities except for some. This is the reason why after working for 10 years in this company, I hardly get a raise. If I or any of my family members get sick, we simply incur debts to be able to attend to our medications.

In terms of the working conditions, it is quite disappointing. The warehouses where I work are not well-equipped. They do not even have a decent comfort room. We share lockers, too. Our break room is close to dilapidation so rest periods can be hardly called rest at all. As to breaks, we have 30-minute lunch breaks from 12:00-12:30 then 2 bathroom privileges, one in the morning and another in the afternoon.

My employer, I think, is a large corporation because it has seven branches in the country though each establishment is not really as big as other large companies. It has hundreds of employees so maybe it is indeed a big investment.

During working hours, we rarely talk with my co-workers. However, we get to discuss some topics while taking our breaks such as our family lives. Usually they are family problems and we can only share them to the people at work to at least ease out a bit. We also chat about current events, latest happenings inside and outside the workplace, entertainment, and just about anything under the sun.

Labor unions have declined over the past few years. But at times we talk about it. Generally, my co-workers especially those who have worked for a long time in the company, have always wanted to form a union where we could express our sentiments to our employers. Maybe, this would have improved our status in this company. Nevertheless, no one has really had the guts to lead us. Inasmuch as I wanted to help, I chose to have a job rather than not having one at all. I am scared of being jobless. I am still thankful even if I am only a low-wage worker.

Works Cited

Hansen, Randall. “Surviving and Moving Beyond Low-Wage Jobs: Solutions for an Invisible Workforce in America.” Quintessential Careers. 28 June 2007 <http://www.quintcareers.com/surviving_low-wage_jobs.html>.

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## Alternative Method for Onsite Sewage Disposal

WASTEWATER TREATMENT PLANT DESIGN Term Paper 1 ALTERNATIVE METHOD FOR ONSITE SEWAGE DISPOSAL (29 Pages) March 2nd, 2012 TABLE OF CONTENTS 1. INTRODUCTION3 2. INFORMATION4 3. 1 Soil Absorption System in a septic tank4 3. 2 Soil Failures6 3. 3 Soils7 3. ALTERNATIVE METHODS FOR ONSITE TREATMENTS 8 AND SYSTEMS OF DISPOSALS 4. 4 Alternative method for soil treatment and disposal systems8 4. 5 Alternative treatment devices13 4. 6 In-house alteration of wastewater16 4. REGULATION OF ALTERNATIVE ONSITE SYSTEMS21 5. CONCLUSION22 6. 7 Funding of existing state onsite programs22 6. Operation and maintenance22 6. 9 Failing systems23 6. 10 Water Conservation24 References25 List of Figures26 1. 0 INTRODCUTION Nearly 30% of the homes in the United States of America depend on onsite wastewater treatment and disposal. This percentage remained constant for the last two decades and is also estimated to be constant in the coming future. It is estimated that up to one half of the septic tanks do not perform perfectly or may even fail even before their expected life. The risk of contamination of ground water and surface water quality increases with the failing of an onsite system.

These result in degradation of water quality, health hazards, outbreak of diseases and lowered property values. Nationally septic tank leachate is the most frequently reported cause for the contamination of the ground water and consumption of contaminated ground water is responsible for over 50% of all reported outbreaks of waterborne diseases. Lack of affordable and effective onsite sewage disposal is a national issue. Less than 35% of the land in the United States of America is suitable for conventional septic tank soil absorption systems.

These limitations and requirements have resulted in developing many alternatives for onsite technologies. This study discusses recent research on alternative onsite technologies. 2. INFORMATION 2. 1 Soil Absorption System in a Septic Tank The soil absorption system in a septic tank is one of the most common treatment systems onsite. This soil absorption system consists of a septic tank, a water tight container which is usually large, and a field of soil absorption. It also contains a series of perforated pipes that are buried in the soil. This system performs two functions, the treatment of wastewater and the disposal.

The septic tank provides biological treatment by removing large solids and greases. Further treatment followed by the final disposal is provided by the soil absorption field. A septic tank is made up of a large container which is water tight (usually 1000gal). This container is generally buried slightly below the ground and also adjacent to the building to which it is serving. The greases and fats are collected in a layer on the upper liquid surface whereas the solids settle to the bottom of the tank. For the liquid to be discharged from the layers between the solids and the scum, an outlet is constructed in the septic tank.

For approximately every three years, the solids and scum are pumped from the tank. The treatment or stabilization of contaminants in the wastewater are treated by anaerobic microorganisms. This process occurs in the absence of O2. The soil absorption field consists of a series of pipes. These pipes are placed in trenches which are usually 2 to 3 feet wide and 2 to 4 feet deep. These pipes are perforated. The pipes are placed in Gravel and it is covered with top soil. The effluent from the septic tank first flows down to the pipes, then out of the perforations and finally is absorbed by the adjacent soil.

The microorganisms in the soil below the trenches absorb and treat the organic material in the effluent. This treated water percolates into ground water or may also evaporate. 2. 2 FAILURES The main causes for the failure of the system are * The water table being very high. * The surrounding soil being impermeable. * Improper Construction * Lacking in maintenance of the tank. The failed system can usually be defined as * When sewage effluent is collected on the surface of the ground. * When the wastewater is no longer being evacuated by the toilets or drainage systems.

Main Causes for these types of Failures * Clogging of the Soil under the system * The rising of the water table to very close of the distribution trenches. * The soil being impermeable. The Clogging of the soil is being considered as the unavoidable occurrence for a soil absorption system over a period. The design of the system, the maintenance of the tank, and the characteristics and amount of wastewater being treated greatly influence the rate of clogging. The immediate clogging of the soil is also occurred when proper pumping of the septic tank is neglected.

If the soil under the field of soil absorption is too permeable, even then the system failures occur. If this happens then the effluent directly enters the ground water without proper treatment in the soil. In this case it becomes more difficult to identify, as there are no problems that can be found out or noticed in the disposal system. A sample of ground water may be taken to detect such failures. 2. 3 SOILS The ultimate disposal of the liquid part of the wastes treatment process depends mainly on soil for all onsite systems. The soil also provides the ultimate treatment in most of the onsite systems.

The wastewater is made free of contaminant particles when the contaminants pass through soil by contact with the aerobic microorganisms and also absorption to soil particles. The pathogens and contaminants are completely removed from the wastewater if it travels slowly through 2 to 4 feet of unsaturated soil. If at all the wastewater is travelled quickly the treatment is not done completely and resulting in the contamination of the underground water. Even if the wastewater travels too slowly the saturation of the soil takes place aerobic treatment will also not take place.

The time at which the wastewater is to be passed should be determined by the soil permeability. It is mainly affected by texture and structure of the soil. The texture of the soil means the physical nature of the soil with respect to portions of sand, silt and clay. The travelling of the water depends on the particle size of the soil. It travels quickly through the coarse soil and slowly in clayey soils. Soils whose structure is stable will allow more water to pass through than that of those soils whose structure is unstable.

The kind of soil absorption system that has to be determined is mainly based on the characteristics of the soil. 3. 0 ALTERNATIVE METHODS FOR ONSITE TREATMENTS AND SYSTEMS OF DISPOSALS The conventional septic tank absorption system is used in less than 35% of the land in the United States of America. There are some areas that are not suitable for the conventional absorption system because of the soil. For the past several years alternative methods to the conventional method of absorption system have been provided to develop effective sewage treatment to those soils which were formerly not suitable.

Most of the alternative methods are still in the experimental stage. This chapter describes the ongoing status of the research being carried out on a number of alternative methods to the conventional septic tank-soil absorption system. The alternative systems for the soil absorption system are divided into three groups * Alternative method for soil treatment and disposal systems * Alternative treatment devices * Alteration of wastewater in-house 3. 1 ALTERNATIVE METHOD FOR SOIL TREATMENT AND DISPOSAL SYSTEMS The main factor in identifying the onsite sewage treatment and disposal systems is the soil.

For this reason, the research has been primarily focused mainly on developing alternative soil absorption methods. Five alternatives to the standard soil absorption field are described here. Of which three of them are the alternative methods of distributing effluent to standard soil absorption field, a mound or fill system, and an evapotranspiration system. Soil Clogging over time is an unavoidable occurrence for soil absorption systems. This problem is caused by the manner in which effluent Is delivered to the system.

The flows occur to a soil absorption field when the effluent is displaced from a septic tank by a water use event in the household. Such low volumes and irregular waste utilize only a small portion of the disposal trench area on all times. These cause clogging, progressive creeping failure and localized overloading. The following figure illustrates how the progressive failure reaches a state of equilibrium along the entire absorption field with respect to the time. To provide more uniform application of effluent over the complete trench area two systems have been developed. The two systems are Dosing system and Pressure Distribution systems.

DOSING SYSTEMS The dosing systems are present in the dosing tank. These dosing systems store the pretreated effluent and apply large doses to the soil absorption field by gravity, siphon or pump at regular intervals of time. The surface of the soil is returned to an unsaturated condition by allowing the system to drain. The soil type determines the frequency of dosing. It usually ranges from one to four doses per day. EALUATION: The specific cause for soil clogging is not well understood, and some question still exists whether dosing is effective or not. Clogging still occurs in dosing systems as well as standard systems.

More research and careful tracking of installed systems is necessary. An additional dosing chamber and pump adds up to approximately \$880 to \$1000 to the price of the standard system. REGULATORY STATUS: Washington State Guidelines for dosing systems have been issued. There are 57 systems on the state inventory. PRESSURE DISTRIBUTION SYSTEMS Pressure distribution systems like the dosing system store pretreated effluent for periodic distribution to the soil absorption field. Diameters of small radius are used to pump the effluent over the entire absorption field. The pressure distribution system provides the most uniform distribution.

Such accurate distribution avoids the localized overloading problems. The additional benefit of dosing are also achieved with the Pressure Distribution system. EVALUATION: The Pressure distribution systems are mostly suitable for permeable and coarse textured soils. This is because they improve the potential for treatment by the distribution of the effluent evenly over the entire absorption field and reduce the potential for direct bypass of effluent to the ground water. The installation cost, operational cost and the maintenance cost are much more in a pressure distribution system when compared with the gravity system.

This is because of the additional cost of the dosing chamber and pumps which approximately adds to \$800 to \$1000 to the price of a standard system. The cost of installation of the absorption field is similar to that of the standard field. It is obvious that these systems result in the most effective treatment in coarse textured soils, but it is not clear whether or not the life of the absorption field is long lasted in fine grained soils. REGULATORY STATUS: Washington State Guidelines for pressure distribution Systems have been issued (revised SEPT 1984).

There are a total of 52 systems on the state inventory. ALTERNATING DISTRIBUTION SYSTEMS The effluent is not stored by the alternating distribution systems. Instead the disposing of the pretreated effluent is carried out between two separate absorption fields. These absorption fields are constructed in close proximity and the fields are usually alternated annually. This allows the unused field to drain and aerobic decomposition of clogging mat to take place. The residential systems are generally constructed with two equal fields each containing 75% to 100% of the required surface area.

EVALUATION: Washington alternative system guidelines require each component field to contain 100% of the area required for a single field. In a conventional system it is also required that the soil meet its standards. Hence the installation cost is more and the benefit received is the increased life time of the absorption field. REGULATORY STATUS: Washington state guidelines have been issued. There are two systems on the state inventory. MOUND OR FILL SYSTEMS This is a pressure distribution system installed in a mound constructed on top of the natural soil.

Such systems are used when the GWL is too close to the surface or when the soil is not permeable enough or is too permeable. This mound is constructed of a coarse grained material usually sand through which the pretreated effluent travels before it reaches the original surface of the soil. Vegetable cover and top soil are used to cover the mound. Usually the soil absorption field is constructed below the top soil. The mound system is placed on the top of the top soil layer and thus gains the additional benefit of this soil layer for the treatment.

The treated effluent is dispersed over laterally through the top soil until it is absorbed into the sub soil. EVALUATION: These mound systems have emerged as an effective alternative for sites whose soils are unsuitable. Anyhow construction of a mound requires the transportation of large amounts of new soil to the site and the mound must be carefully designed and constructed properly in order to see that no problem occurs in the future. The design and installation cost of the mound system can cost between \$4000to\$8000. Therefore this the last option for installation.

REGULATORY STATUS: Final state guidelines have been issued for the mound systems and there are 257 systems on the state inventory. EVAPOTRANSPIRATION BEDS The evapotranspiration beds discharge the wastes into the air instead of the soil. The use of such beds is not allowed in those areas where the annual evaporation is more than the annual precipitation. These beds are lined with water tight materials such as plastic, filled with crushed rock and sand, and again covered with top soil. Perforated pipe lines are used distribute pretreated effluents to the bed as in the conventional absorption system.

EVALUATION: Testing of 17systems took place in Easter Oregon and that revealed out poor performance. All but one of the systems developed holes in the linear. They allowed the untreated effluent to enter the ground water. REGULATORY STATUS: An experimental system permit would be required for installation of the evapotranspiration beds. 3. 2 ALTERNATIVE TREATMENT DEVICES The focus has mainly been on the disposal systems in an onsite research in the USA. However there has been some interest in reducing the clogging of soil absorption fields. This has led to in improving the quality or purity of the effluent from treatment devices.

If the purity of the effluent is improved then the clogging in coarse unstructured soils is reduced. There are 2 devices in the pretreatment of wastewater, the septic tank and the aerobic tank. To provide an extra treatment to the effluents from septic tank and aerobic tank several technologies have been developed. Some of the devices are capable enough to produce the effluent suitable for surface discharge. However the surface discharge is not allowed in all states and so these types of systems can be utilized to improve the performance of the soil absorption field. AEROBIC TANKS

An aerobic tank is a watertight container which runs on the mechanism where the wastewater comes in contact with air. The decomposition of waste products takes place when they are in contact with the air. The separation of the solids and greases take place and the liquid waste is discharged into a disposal system. The solids must be pumped from the final chamber regularly. Aerobic tanks can reduce the BOD by 85% to 98% under ideal conditions and also reduce the Suspended Solids by 40% to 80%. A septic tank reduces BOD by 25% to 65% and suspended solids by 40% to 80%.

EVALUATION: Aerobic treatment devices are sensitive to any changes in the quantity of wastewater or the characteristics of the wastewater they are treating. In normal conditions, the effluent has not been shown to be of a higher purity than the septic tank effluent and the purity of the septic tank changes vastly with time. These are mechanical devices which require skilled men to operate it and also to maintain it. Since the aerobic tanks need regular inspections and frequent maintenances, they are best suited for conditions where the management is done by Wastewater Management District or utility.

REGULATORY STATUS: Final state guidelines were issued in 1975 for the aerobic devices. No systems are illustrated on the state inventory. ANAEROBIC FILTERS These filters are mainly designed to provide secondary treatment to septic tank effluent before they discharge to a soil absorption system. The filter is a water tight container which is filled with crushed rock or other soil type which will support microbial growth. Effluent is treated when it comes in contact with anaerobic organisms on the surfaces of the anaerobic filters. EVALUATION: Development is still in the experimental stage for small residential systems.

It is reported that anaerobic filters can reduce the BOD of septic tank effluent by 30% to 80% and can further reduce fecal coliform by 43% to 95%. No additional source of energy is required and the maintenance cost is almost similar to that for a septic tank. Cost Estimations are not available. More research and field tests are needed. REFULATORY STATUS: No state guidelines are there for anaerobic filters and an experimental system permit would be required. SAND FILTERS Many sand filter designs have been installed on an experimental basis for residential onsite use.

Sand filters operate by directing pretreated effluent into or onto a layer of sand allowing it to drain through the sand where aerobic decomposition of the wastewater takes place and collecting the filtrate in a perforated pipe at the bottom of the filter. Filters may be constructed either above or below the ground. The systems that are constructed below the ground can be contained in a water tight vault or can also be uncontained in direct contact with the surrounding soil. Some filters send back part of the filtrate through the filter for further treatment. The liquid filtrate is ultimately disposed of in a soil absorption field.

Sand filters are capable of producing very high quality of effluent with reported BOD and SS reductions of 99% and 97%, respectively. EVALUATION: The Oregon Department of Environmental quality has conducted extensive research into the use of sand filters for residential use. Their research has shown good success at improving the ability of soils to accept and treat effluent on sites with soils that are not acceptable for the conventional systems. In cases where the soil conditions are very poor, an installation of sand filter is made to treat the effluent coming out of the septic tank before the disposal in the mound system.

However this system might cost up to \$1000. REGULATORY STATUS: Washington State interim guidelines for sand filters have been issued and are currently being revised. 3. 3 IN-HOUSE ALTERATION OF WASTEWATER The main factors that are taken into consideration when designing onsite treatment and disposal systems are the quantity and quality of the wastewater being treated. These factors also have an important effect on the long term performance of those systems. Wastewater is created and its characteristics are determined by the water use habits of the residents belonging to the household.

The quality of the wastewater is also influenced by the water use habits of the residents. One technique of altering the waste stream is one technique considered to permit onsite treatment and disposal on sites with less suitable soils. HOUSEHOLD WASTEWATER CHARACTERISTICS Household wastewater characteristics vary widely with the time of day and the season. Wastewater from residential houses is affected by high utilization of water like the day of wash, holidays and guests and periods of no flow in times of vacations. Below are given the values of average residential wastewater.

Typical household wastewater is 99. 9% water by weight, and 0. 02% to 0. 03% suspended solids, plus minor amounts of other soluble and insoluble organic and inorganic substances. Wastewater also contains bacteria, viruses and other microorganisms from the digestive tract, respiratory tract and skin. Some of the physical and chemical characteristics of wastewater produced by various activities are listed below. TABLE 3. 1 HOUSEHOLD WASTEWATER – PHYSICAL AND CHEMICAL COMPOSITION ACTIVITY| BIOLOGICAL OXYGEN DEMAND| SUSPENDED SOILS| Kitchen activities| 42%| 27%| Bathing and showering| 6. %| 6. 8%| Clothes washing| 29. 9%| 31. 3%| Toilet Flushing| 21. 8%| 35. 8%| TOTAL| 100%| 100%| WASTE SEGREGATION Toilet flushes or black wastes contribute approximately 35% of the water, 36% of the suspended solids, and 68% of the total nitrogen to the household waste stream. The volume and pollutant load of remaining water which is called grey water is reduced if the toilet wastes are treated separately without using water. VAULT PRIVIES Vault privies and holding tank systems store the waste products from toilet in a storage vessel which is water tight and is pumped out periodically?

EVALUATION: The storage systems are generally used to correct a temporarily correct a failing system but not always applicable to residential uses. REGULATORY STATUS: Washington state guidelines have been issued and the use is restricted to non-residential applications. INCINERATING TOILETS The use of natural gas and electricity is made to incinerate toilet wastes in the incinerating toilets. In these toilets the solids are reduced to ash and the liquids are evaporated and vented to the outside. Later the ash is disposed of at regular intervals of time.

EVALUATION: Incinerating systems consume energy either from electricity or from natural gas and should go through a fifteen minutes treatment cycle after every use. Five to Six units installed in Kentucky in the early 1970s had been abandoned by 1978 because of high operation costs, associated doors and frequent problems of repairs. REGULATORY STATUS: Washington state interim guidelines for incinerating toilets were issued. BIOLOGICAL TOILETS Biological toilets treat human wastes by composting. Composting takes place under specific conditions of temperature, moisture, exposure to Oxygen and the availability of carbon and nitrogen.

This process of composting usually results in a relatively dry end product which is free from harmful components. This end product is intended for disposal as a soil additive. To assure successful treatment of wastes, proper maintenance of design and operation of composting toilets within the composting chamber. There are two common designs used, (1) small units where the entire unit is on the floor in the toilet room and (2) large toilets where the composting unit is below the floor. EVALUATION: Even though they have been in use for many years, the design of composting or biological toilets is still evolving.

Field testing in the United States of America has resulted in some problems. Two studies sponsored by U. S. EPA (Environmental Protection Agency) and conducted in California and Oregon report generally poor performance including certain problems like excess buildup of liquid, problems caused by insects and rodents, structural failures and incomplete treatment of wastes. For certain units to operate efficiently an added heat and forced ventilation are required. REGULATORY STATUS: No existing regulations in the state of Ohio. GREYWATER TREATMENT AND DISPOSAL

Grey water contains concentrations of organic materials, solids, nutrients and fecal bacteria which require treatment to that of the total household wastewater. A significant amount of wastewater created can be reduced by segregating the waste. EVALUATION: Even though the conventional treatment and disposal methods are required, the segregation of black wastes allows the size of the system to be reduced significantly. Septic tank size can be reduced by 50% and the capacity of the soil absorption field can be reduced by 40%. REGULATORY STATUS: Guidelines for grey water treatment are included in the state regulations. . REGULATION OF ALTERNATIVE ONSITE SYSTEMS To prevent the spread of diseases, the need for regulation of onsite sewage disposal became necessary. However specific construction requirements are many times difficult to justify in terms of preventing the spread of diseases. This difficulty led to vast differences in policy and allowed regulations to be influenced by political purposes as well as public health purposes. A national survey of existing state codes in 1947 found considerable variation in requirements for onsite sewage disposal systems (Weibel, 1947, in Kreissl, 1982a).

These findings prompted the U. S. Public Health Service to become involved, and in 1957 they published the Manual of Septic-Tank Practice. A survey of all the states was conducted in 1971 and showed that most state codes had incorporated the recommendations of the manual (Patterson, 1971, in Kreissl, 1984). Since that time, states have been revising their codes in response to local experience and new research. In 1980 the U. S. Environmental Protection Agency published a Design Manual for Onsite Wastewater Treatment and Disposal.

Newer or “alternative” onsite treatment technologies are more complex than that of the conventional systems and incorporate pumps, recirculation piping, aeration, and other features (e. g. , greater generation of residuals) that require ongoing or periodic monitoring and maintenance. However, the current management programs of most of the jurisdictions do not typically oversee routine operation and maintenance activities or detect and respond to changes in wastewater loads that can overwhelm a system. In addition, in many cases onsite system planning and siting functions are not linked to larger ground water and watershed protection programs.

The challenge for onsite treatment regulators in the new millennium will be to improve traditional health based programs for ground water and surface water protection while embracing a vigorous role in protecting and restoring the nation’s watersheds. 5. CONCLUSION There are important problems not addressed by existing regulations 5. 1 Funding of Existing State Onsite Programs The Department of Social and Health Services currently has 1. 8 staff statewide for the entire onsite program. Department officials estimate that 4 to 5 full time staff would be required to adequately perform the state’s duties (Lenning, 1987). . 2 Operation and Maintenance The U. S. EPA (Environmental Protection Agency) Design Manual for Onsite Wastewater Treatment and Disposal Systems (1980) suggests that there are three distinct phases in the life of onsite systems that required to be controlled. * Installation * Operation * Maintenance The above phases of installation, operational cost and maintenance cost cause problems that may result in system failures that threaten public health or damage the environment. Guidelines for alternative and experimental systems require some monitoring of operation as mentioned in Section 4. 2.

The difference between using an onsite system and being connected to a municipal sewer is usually not known to the home owners. Careful operation and careful maintenance is required for an onsite system to function properly. For example, there might be a serious effect on the operation of an onsite system with the use of garbage grinders or excessive water volumes (Refer Chapter 3. 3). An important maintenance function for most of the systems is pumping of septic tank. If this is not done properly it may result in the rapid failure of the soil treatment and disposal system (Refer Chapter 2. 2).

Special operation and maintenance requirements are present in most alternative systems so that they can function properly. As of now there are no statewide requirements for operation and maintenance of conventional or alternative onsite systems. There are two possibilities to control the onsite system operation and maintenance. * Regular Inspection and documentation of maintenance * Community or regional wastewater management districts REGULAR INSPECTION AND DOCUMENTATION OF MAINTENANCE To adequately protect public health and the environment regular maintenance of the onsite wastewater systems is required.

In some areas, the local governments require the property owners to provide local health authorities with evidence that their wastewater system is being operated and maintained properly. Inspections are conducted by health officials or licensed individuals, such as plumbers who are well trained and also are certified to carry out inspections. COMMUNITY OR REGIONAL WASTEWATER MANAGEMENT DISTRICTS In the previous days onsite wastewater systems were considered temporary solutions until one of the areas were sewered. From then they have become an important wastewater treatment practice for many areas.

The induced and often dramatic growth can be reduced with onsite system in low density areas. With the help of an onsite system the high costs for the construction of the traditional centralized sewer and treatment systems can also be reduced. The degradation of the ground water and the environment can be avoided if the management district sees that the maintenance of the onsite systems within the district is functioning properly or not. In some states wastewater management districts have been formed using a combination of alternative including individual and communal systems. . 3 FAILING SYSTEMS The repairs are usually difficult when a system fails because of its high repairing cost. The health officials find it difficult in the issues of failing systems. They are difficult to detect the cause of the failure and are even more difficult rectify the defect or to repair it. There are two regulatory problems, related to alternate systems that arise when a system fails. * If there is not enough land to construct an approved replacement system then a failing system may be located on this lot.

If there is flexibility in the guidelines for the application of an alternative system or replacement systems, then this could allow people to improve their wastewater treatment system even if they are not able to meet all applications. * The Property owner not being able to afford the cost of an approved replacement system Some funding assistance is required to help low income householders to rectify the onsite system deficiencies. For example if the failing system is located on soil that is not suitable for a conventional system, an alternative system may be required.

The installation cost and operational cost are very high for alternative systems. 5. 4 WATER CONSERVATION The advantages of water conservation on the treatment of soil and disposal systems are described in section 3. 3. Some of the advantages of water conservation are. * The performance of soil absorption system is increased. * Savings in energy costs * Potential for correcting a system which is failing Several applications for water conservation to regulate to onsite regulations are: * Regulations allow for soil-absorption field sizes to be decreased when it can be shown that low water use fixtures require a decrease.

However some officials might be hesitant to permit the decreases in soil absorption field size fearing that the occupants in future might install non efficient fixtures and cause the system to fail. * Water conservation can be a cost effective method for correcting the failures of the system (Refer section 3. 3). There are currently no state guidelines for the application of this method. * Some states like Oregon and California have enacted a legislation which requires the installation of some water efficient fixtures in new construction (Puget Sound Water Quality, 1986). REFERENCES 1.

Metcalf and Eddy (2002) Wastewater Engineering: Treatment, Disposal and Reuse, 4th Edition. McGraw-Hill, New York, New York 2. Syed R Qasim, Wastewater Treatment Plants- Planning, Design and Operation, Second Edition. 3. Wikipedia www. wikipedia. org 4. Environmental Protection Agency(EPA) FIGURES 1. Typical Septic Tank – Soil Absorption System 2. Septic Tank (Adapted from Environmental Protection Agency, 1980) 3. Soil Absorption Field Cross Section 4. Typical Dosing Chamber with Pump 5. Mound System 6. Aerobic Treatment Unit (Aerobic Tank) 7. Sand Filter 8. Biological Toilets

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## Pros and Cons of Minimum Wage

Pros 1. Reduced poverty The minimum wage can improve the living standard of low-income workers, which ultimately reduce poverty. According to the International Labor Office (2005), reducing poverty and working poverty requires both productivity growth and employment creation. The World Development Report 2004-05 also stated that there is strong empirical evidence that creating decent employment opportunities is the best way to take people out of poverty. As a result, the wealth gap between the rich and the poor can be narrowed.

The Keynesian argument for minimum wages – this suggests that lower-income workers have a high propensity to consume, and that with the extra disposable income from minimum wage, they will spend a high portion the sum which will be injected back into the circular flow of income. In regions and localities where average incomes are low, a higher minimum pay rate can boost total demand for goods and services and create a positive multiplier effect – but much depends on the effect of a pay floor on how many people remain in work. . Reduced government spending on social welfare Since workers are being paid more per hour, their increased purchasing power enable them to meet pay for their basic needs on their own, without relying on government “top-up” welfare benefits. Therefore, this can greatly reduce the government expenditure on the social welfare, and the spending can be used in other ways, such as education and medication. Cons 1. Reduced employment of the less-skilled workers

Implementation of minimum wage can reduce the employment of the less-skilled workers (Neumark & Wascher, 2008). According to The Wall Street Journal (2009), Economists for the Federal Reserve reviewed over 100 academic studies on the impact of the minimum wage and found overwhelming evidence that lower skilled and young workers have increased rates of unemployment when there is a higher minimum wage. These workers are laid off as their employer finds that the employee’s labor is not worth the required age, but additionally employers are filling these jobs with higher skilled labor (Garfield, 1996). Additionally, many others pointed out the importance of the entry level jobs and observed that the loss of these jobs would have a negative impact on the development of a good work ethic in young workers (Irvin, 2009). 2. Shift the cost to consumers The increase in the minimum wage has caused many of these small businesses to raise their prices just to cover costs (Messerli, 2009).

As labour is a factor of production, an increase in the average cost of labour will push up the unit cost of products. With the persistent increase in the general price level, there will be at a risk of inflation. 3. Difficult for small businesses to survive in the market Some small businesses may find it difficult to survive in the economy because they cannot afford to pay the minimum wage stipulated by the law. It obstructs their chances of growth and thereby hampers the economic growth in the larger context.

Though some of these companies would charge higher to the consumers, consumers may eventually decide that the high prices cannot be justified and the small business is forced to close (Messerli, 2009). 4. Shadow labour markets may develop Due to the surplus of labour, more people are willing to work at the minimum price than employers are willing to hire, and it is likely that workers will try to sell their services at illegally low prices. These workers are often, especially in America, illegal immigrants who are hired in favour of tax paying citizens.

This will cause a decrease in tax revenue as more workers are not reporting their incomes, and an increase in the amount of unemployment benefits the government will have to pay out. The minimum wage benefits those who are employed at it and disadvantages those who loose out on potential employment because of employers hiring from a shadow labour market. The effect of minimum wages on unemployment will depend on the elasticity of demand for labour. If the demand for labour is inelastic, the introduction f minimum wages will only increase unemployment a little. Job losses may simply be due to the increase in labour cost which would result in a lower demand for labour. **** 5. Distortion to the free market Minimum wages are a barrier to the free market. If the minimum wage is set above the market clearing price, it will result in rising unemployment. Some firms will judge the opportunity cost of hiring an extra employee too high and this may prevent some workers from finding jobs who otherwise would normally find it.

In a totally free market, they may be willing to accept lower wages. However, even if the artificial barrier were not present, the action of trade unions would greatly limit the wage reduction that workers would tolerate. Rather than have the entirety of the workers in a union take a pay cut, it is more likely that some will be fired and the rest will continue work at the same wage rate. This means that even in a free market, the offer of lower wages can result in unemployment due to the effect of sticky wages.

Equally, in some cases, when wages drop too low, people are willing to forgo employment. This is because the benefits of being employed are hardly greater than the unemployment benefits they would receive otherwise. This is known as the unemployment trap and its result is that even in a free market, if the equilibrium price is too low, unemployment will rise. For the two aforementioned reasons it is impossible to say that the imposition of a minimum wage will definitely cause higher unemployment than if wages were left to the invisible hand of the free market.

Reference: Garfield, R. , (1996). “The Case Against a Higher Minimum Wage”. Retrieved March 9, 2012, from http://www. house. gov/jec/cost-gov/regs/minimum/against/against. htm International Labour Office (2005). World employment report 2004-05: employment, productivity and poverty reduction. , p. p. 31. Irvin, M. , (2009). “Minimum Wage Increase Pleases Workers, But Employers Not So Happy”. Retrieved March 8, 2012, from http://blog. al. com/live/2009/07/minimum_wage_increase_pleases. html Messerli, J. (2009). “Should the Minimum Wage be Abolished (i. e. Reduced to \$0. 00)? ”. Retrieved March 9, 2012, from http://www. balancedpolitics. org/minimum_wage. htm Neumark, David (Editor); Wascher, William L. (Editor). Minimum Wages. Cambridge, MA, USA: MIT Press, 2008. p. 104-105, 189-190, 258-259. The Wall Street Journal, (2009, October). “The Young and the Jobless”, The Wall Street Journal, at A12. Retrieved March 12, 2012, from http://online. wsj. com/article/SB10001424052970203440104574402820278669840. html

Categories

## Minimum wages

Many economic theories have been proposed to discuss the impact of minimum wages on labor market. The proceedings of the labor market is based on the exchange of resources between the employee and employer, the employee receive wages in return for their labor services to the employer. Labor market is considered to be most competitive market, where the established market price is much closer to the value of the product.

Therefore, the employee is likely to receive marginal value, in the competitive market (excluding the factor of minimum wage). Therefore minimum wage laws have been introduced which foresee crisis of unemployment, if fewer employers are interested to hire labor, where as more people are willing to offer their services. Therefore, the law intends to maintain the equilibrium, to avoid social and economic turmoil.

The amount of labor supplied by the workers is directly proportional to the nominal wage, a certain increase in the wage, forecast increase in the labor supply. The observation is based on the assumption that an employee hired at a low wage will prefer to consume ‘leisure and forego wages’, a slight increase in the nominal range, it becomes difficult to practice leisure and avoid labor, therefore there is an increase in the number of workers wiling to offer labor. The relationship between the labor supplied and nominal wage is function of different variables including price. A substantial increase in the price level will reduce the number of workers, at all wages (Wascher, 1995).

LABOR MARKET AND WAGES

There exists an inverse relationship between the nominal wage, and the ‘amount of labor demanded by the organizations’. A substantial increase in the wages is likely to compel the organizations to reduce recruitment schemes. The relationship has been derived on the basis of an assumption that the organization prefers saving for increased proportion of profitability i.e. such level of production is aimed by the organization which increases the profit i.e. the difference between expenses and revenue.

The revenue is based on the price of an item, and quantity of the items sold (Christopher, 2005). The expanses include the amount of wages, which is based on the labor and services. Therefore, the company will prefer to maintain a minimum threshold level to secure profit, on the basis of reduction in the wages, as more workers are employed, the labor wage increases which turn the organization less profitable. The price factor may compel the organizations to recruit the employees for all wage levels.

minimum wages AND LABOR MARKET: IMPLICATIONS

It has been predicted that minimum wage laws are expected to increase unemployment, if minimum wage is established above equilibrium wage. It is because, a large number of employees will be interested in offering their services in exchange for higher wages, on contrary on small and limited number of such opportunities will be available. Also, the organizations will be careful about the recruitment scheme, and ensure that only well qualified people are hired on high wages, therefore there is expected to be little scope for the least skilled and inexperienced employees, thus within the labor market the unemployment level will increase (Kane, 2007).

Another factor which has the potential to deteriorate the condition and extend the unemployment crisis is monopsony within the labor market. If the employer has the authority to determine the wages for the employees, it is expected that the unemployment rate will diminish because minimum wage may boost employment. The equilibrium between the labor demand and labor supply will exist only at a point when applied wage is equal to the requirements of the labor and organizations.

Wages are more than the equilibrium wage, will result in unemployment i.e. the excess supply of labor. ‘Using the matching function formulation along with Nash bargaining between workers and firms, the results of Hosios inform us that an efficient labor market equilibrium requires that the elasticity of the matching function with respect to the size of the set of searchers be equal to the share of the surplus they receive’ (Kane, 2007).

CONCERNS: MINIMUM WAGE

It is important to understand that minimum wage is a practice control factor applicable on the labor, which can be regarded as the captivity of the economic rights of the low-paid labors, and their prospects. The increased minimum wage limit is expected to reduce America’s labor freedom index to 87 percent. In the case of free market economy, the maximum utilization of the land, information, capital goods, and labors achieved through price allocation.

If the prices are kept free floating, the market is considered to be real free in launch of its economic policies and business plans, which have an impact on the labor market, and the fixture of minimum wage. ‘Estimates of the bargaining power parameter, although significantly lesser than a  percent, are significantly larger than estimates of the match function elasticity and as a result yield an optimal minimum wage rate less than the then current value of \$4.25’ (Swinnerton, 1996).

Considering the example of an organization, the organization has the right to increase its wages to capture the attention of the labor for the employment. Wages are considered to be suitable indication to discuss the expansion of business activities, and direct employment. ‘Freely floating prices allocate resources efficiently to places where they will take root and boost economic productivity’ (Christopher, 2005).

Price signals have been disturbed and distorted through implementations of labor regulations, which hamper market mechanism, and restrict economic freedom of employers and employees. Minimum wage is considered to have significant impact on economic freedom, the labor supply and demand mechanism undergo disruption due to the allocation of government specified minimum wages (Card, 1995). If the situation is not existent, the minimum wage can be regarded as ‘crude instrument’ which relocate the labor market towards efficient allocation.

‘The labor market is not excused from the basic economic principle that artificially high prices cause lower demand’. The National Bureau of Economic Research observed that many analysts were of the opinion that minimum wages have negative impact on the labor market, ‘almost all point to negative employment effects’. More specifically, the study also revealed that there is, ‘relatively overwhelming evidence of stronger unemployment’ impacts on less experienced workers (Swinnerton, 1996).

In the case on United States, the proposed federal minimum wage has been avoided by the Congress for more than a decade. The reviewed limit for the minimum wage is expected to raise to \$7.25, however analyst are of the opinion that labor market can be served well through expansion of the Earned Income Tax Credit (or EITC, a substantial wage subsidy for low-income workers). According to 2007 Index, more than 90% of the US labor market is considered independent, and the imposition of the minimum wage will not only hamper the status of the labor market, but will reduce the labor freedom factor.

IMPLICATIONS

The proper approach for ensuring better income for group of workers can be achieved through imposition of minimum wage. The entrance to Labor Market can be achieved through implementation of minimum wage, and this is likely to benefit least qualified individuals. ‘Labor market flexibility refers to the ease with which workers and employers can negotiate mutually advantageous labor contracts’ (Nathalie, 2006). However the implementation of minimum wage has been discouraged by economist, most of the economists are of the opinion that higher minimum wage has failed to achieved the primarily goal of poverty reduction, and is responsible for unemployment.

According to a survey by Canadian authorities, 10% increase in the minimum wage was responsible for the direct unemployment of Canadian teenagers by 2.5%. In this context the labor laws play fundamental role, to counter such flaws. Researchers have concluded that, the scheme of tightening of laws about labor relations is responsible for the unemployment. It has been warned that implementation of rigid laws for the minimum wage barrier will affect the performance of the organizations. It is believed that organizations will opt for recruitment of smaller staff, and sought the replacement of workers with machines, and diminishes the performance premiums and other perks, or move switch over their operations ands move to other part.

EFFECTS AND ALTERNATIVE (TAX CREDIT)

The increase in the level of minimum wage is considered to be blockade for the reformed economic policies of any country; furthermore it disrupts international competitiveness, labor freedom. Labor freedom, like property rights and business freedom, a detailed study report issued by The Heritage Foundation and The Wall Street Journal have concluded that, all these factors are considered to be important parameters for the evaluation of country’s overall economic freedom as measured by the Index of Economic Freedom (Kane, 2007).

The labor market should be based on labor freedom to strengthen the scope of economic activities that correlates the ability of workers and businesses to interact without any surveillance or official restrictions by the government. The minimum wage is although considered to be an important measure for supporting the poor and less skilled worker, but such conditions affect the business activity and shatter the economic plans of the organizations, and consequently the labor market is affected (Wascher, 1995).

‘The minimum wage disrupts the natural interaction of supply and demand and leads to inefficient allocations of labor and, eventually, increased unemployment’, on contrary the government discourage the practice of competitiveness, and transform it into level economic battlefield, with restricted scope of advents (Swinnerton, 1996).

The sole objective of minimum wage is to provide higher income to low earners, but to avoid the negative fallout of labor market, the execution of such policy should be avoided, and therefore policies based on negative income tax or earned income tax credit should be introduced to favor the low wage earners. Such methodology is considered to be economic efficient.

The classical analysis of minimum wage support the idea that higher wage earners should help the low earners, the restriction of higher minimum wage is likely to affect the services and jobs of the low wage earners, therefore the labor market can be strengthen by providing sufficient incentives to ‘ low wage workers at the expense of other low wage workers and businesses employing low wage workers’ (Card, 1995).

The alternative scheme of negative income tax or earned income tax credit support the low earners, and it is the over all society that incurs the cost, and this further stabilizes the labor market. The scheme is considered to be economically viable, ‘because, a low tax rate on the broader economy causes less deadweight loss than a high tax rate on a small section of the economy’ (Wascher, 1995).

It has been reported that the approved EITC has increased the level of earnings by 40 percent; the proposed \$7.25 of minimum wage after taxes for a full-time worker is expected to double the EITC. It is expected that minimum wage and tax credit scheme will rekindle the hope of low earners, and re-link them directly to the benefits of growing economy.

REFERENCES

Tim Kane, Ph.D. and Anthony B. Kim. A Higher Minimum Wage Equals Less Economic Freedom. 2007. Prentice Hall. pp. 125
Neumark, D. and W. Wascher. Minimum-Wage Effects on School and Work Transitions of Teenagers. American Economic Review 85. 1995. pp. 244-249.
Card, D. and A. Krueger. Myth and Measurement: The New Economics of the Minimum Wage. Princeton: Princeton University Press. 1995.
Swinnerton, K. Minimum Wages in an Equilibrium Search Model with Diminishing Returns to Labor in Production. Journal of Labor Economics 14. 1996. pp. 340-355.
Christopher J. Flinn. Minimum Wage Effects on Labor Market Outcomes under Search, Matching, and Endogenous Contact Rates. New York University Publications. 2005. pp. 45
Nathalie Elgrably. The Minimum Wage and Labor Market flexibility. December 2006.Montreal Economic Institute Publications.

Categories

## Minimum Wage in California Research Paper

Minimum wage is the minimum hourly, daily or monthly wage that must be paid to employees or workers. Each country sets its own minimum wage laws and regulations, and more than 90 percent of all countries have some kind of minimum wage legislation. In the United States, statutory minimum wages were first introduced nationally in 1938 (Wikipedia, the free Encyclopedia).

The minimum wage was enacted in 1938 as part of the Fair Labor Standards Act. The first minimum wage was .25 an hour. This has increased over the years and the current federal minimum wage is \$5.15 an hour (Minimum Wage from http://jobsearch.about.com/od/minimumwage/a/minimumwage.htm)

California minimum wages is based on their law to be implemented and imposed for the employer to follow for the protection of both the employee and the employer.

Body of the Paper

The California State Senate and Assembly have approved legislation that would give 1.4 million minimum-wage earners a \$1-an-hour raise and boost annual pay to keep up with inflation.

The Federal Minimum Wage Labor Law for California stated that employees under 20 years of age may be paid \$4.25 per hour during their first 90 consecutive calendar days of employment with an employer. Certain full-time students, student learners, apprentices, and workers with disabilities may be paid less than the minimum wage under special certificates issued by the Department of Labor.

California law is strict and pitiless to employers who have improperly paid the workers less than \$6.75 per hour. Not only that an employers entitled to pay the unpaid minimum wage pay, but also the interest and penalties as well. But, the right to collect unpaid minimum wage pay does not last forever. In fact, if u delays in claiming the unpaid wages, you risk of losing unpaid minimum wage for work occurring more than three years prior to your filing of a lawsuit.

Although there are some exceptions, because almost all employees in California must be paid the minimum wage as required by state law. Effective January 1, 2002, the minimum wage in California is \$6.75 per hour. There are some employees who are exempt from the minimum wage law, such as outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards. (Minimum Wage Order, MW-2001).

California Wage Law has an exception for learners, regardless of age, who may be paid not less than 85 percent of the minimum wage rounded to the nearest nickel during their first 160 hours of employment in occupations in which they have no previous similar or related experience.

There are also exceptions for employees who are mentally or physically disabled, or both, and for nonprofit organizations such as sheltered workshops or rehabilitation facilities that employ disabled workers. Such individuals and organizations may be issued a special license by the Division of Labor Standards Enforcement authorizing employment at a wage less than the legal minimum wage (Minimum Wage Labor Code Sections 1191 and 1191.5).

Minimum wage legislation may be interpreted as making it either unlawful for employers to pay workers less than the minimum wage, or unlawful for workers to provide labor or services for less than the minimum. White trade unions lobbied for the introduction of minimum wage laws to exclude black workers from the labor market. This minimum wage law prevents black workers from selling their labor for less than white workers, the black workers were prevented from competing for jobs held by whites although it is the employer who is fined and/or imprisoned for violations, and the workers also loses their freedom to do what they want for themselves.

The minimum wage offers substantial benefits to low-wage workers without negative effect. The best recent research shown that the job loss reported in earlier analyses does not; occur when the minimum wage is increased. If the minimum wage were increased nationally to \$7.25: almost 14.9 million workers would receive a raise, and 80 percent of those affected are adults age 20 or over, and 7.3 million children would see their parent’s income rise that can make the family’s income stable.

Families with affected workers rely on those workers for over half of their earnings.46 percent of all families with affected workers rely solely on the earnings from those workers. Some minimum wage workers remain in low-wage jobs for substantial periods. The best recent research on the economic impact of the minimum wage shows positive effects without job loss.

Even the research that suggests a negative labor market effect shows only a minimal impact that is more than offset by the higher wage levels. The states that have adopted higher-than-federal minimum wages have seen low-wage workers incomes rise with no negative side-effects.

Over 650 economists, including five Nobel Prize winners and six past presidents of the American Economics Association, recently signed a statement stating that federal and state minimum wage increases “can significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed” (EPI 2006).

Conclusion

Starting  January 1, 2002, the minimum wage in California is \$6.75 per hour it is strictly imposed and implemented by Law to be follow by all the businesses both public and private sectors.

In this Minimum Wage law there is the difference between the state and federal minimum wage? It stated that most employers in California are subject to both the federal and state minimum wage laws. The effect of this dual coverage is that when there are conflicting requirements in the laws, the employer must follow the strict standard; the one that is the most beneficial to the employee.

Since California’s current law requires a higher minimum wage rate than does the federal law, all employers in California who are subject to both laws must pay the state minimum wage rate unless their employees are exempt under California law.

The minimum wage is an obligation of the employer and cannot be waived by any agreement, including collective bargaining. And in this law any remedial legislation written for

The protection of employees may not be violated by agreement between the employer and employee (Minimum Wage, Civil Code Sections 1668 and 3513).

California law of minimum wage stated that there is no distinction made between adults and minors when it comes to payment. And an employer may not use employee’s tips as a credit towards its obligation to pay the minimum wages

If the employer doesn’t pay the employee it is also stated in the law that an employee can file a lawsuit in court against the employer to recover the lost wages and it is the duty of the court to order the employer to pay the attorney’s fees, and if your not working for this employer, you can make a claim for the waiting time penalty pursuant to Minimum Wage Labor Code section

Today, the earnings of a full-time minimum wage worker with a family of three would earn \$10,712 a year, thus falling below the official 2006 federal poverty level of \$16,600. Although the federal poverty line is an inadequate measure of the income needed to support a family, this comparison highlights the severe insufficiency of the current minimum wage (Fisher 1999).

Finally, the earnings of minimum wage workers are essential to their families’ total income. While not all minimum wage workers are poor or are the sole breadwinner for their families, it is striking how important low-wage workers’ income is to their economic well-being. On average, families with affected workers rely on those workers for over half (59%) of the Families’ total earnings. Nearly half (46%) of all families with an affected worker rely solely on the earnings of those workers.

References:

Laws of Minimum Wage in California, Retrieved November 18, 2006 from

http://www.mcmillanlaw.us/California_Overtime_Law/California_minimum_wage.htm

Minimum Wage, Retrieved November 18, 2006 from http://jobsearch.about.com/od/minimumwage/a/minimumwage.htm

Minimum Wage in California, Retrieved November 18, 2006 from http://www.dol.gov/esa/minwage/america.htm

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Categories

## The Case against Tipping

There are many good reasons on why you should tip a waiter. Anyone who has had much experience in a restaurant franchise would know that most of your wages are tips. The places do this in order to promote better service and to save money by not having to pay the employee minimum wages. This can be beneficial to the customer leaving a good tip can give a customer better results with the service. They may get a kinder person, faster service, and hotter and fresher food or drinks. They also can leave with the knowledge that they made the person feel better about their job, and the fact that they may make their days wages.

On the bad side of tipping The people usually don’t even make minimum wage. They have to rely on the customer in order to make a pay check. This may make the customer fell like their being scammed out of their money, because the person serving them isn’t working for them so why should they have to pay the persons wages. Another con is the tip your giving may be as much as the stuff you bought or possibly even more. Some places coffee is just a dollar and with a dollar tip that would set the price as the same as what the person bought.

Another problem is that they may have a cup set out in order to make the customer feel bad about not tipping. What if you don’t have enough for a tip at the time? You feel you have to because it’s set right there in front of you playing a mental game. OR what if they give you bad service why should you tip for that? What reasons do you find most compelling? The reasons I find most compelling are the fact that restaurants in particular push their waiters/waitresses into the customer’s hands. I am one that believes that the people should get paid regular wages and have their tips be a bonus for good work.

Not have the customers foot the wages for them so they can be greedy and put more money in their pockets. Another reason that I find compelling on the other side is the fact that sense the customer does it helps them get better service. I do get understand the sense of gratification of the person that tips and receives it does make them feel better about their jobs. But at the same time people shouldn’t feel obligated to tip for bad service. Which concerns have particular merit? I think that the tip jar situation does have merit.

If a person set a jar out for tips it is a trap that messes with the customers mind. I would personally feel bad if I looked at the tip jar and didn’t have enough money to pay or if I got bad service I’d feel like I was being forced to pay for that bad service. Also The fact that the employees have to make their wages off of the tips poses a lot of merit. Essentially on one hand I’m paying for a worker that isn’t employed by me. On the other hand that worker has to make their wages. Can you balance the interests of both sides of the issue?

Categories

## Wage vs Salary

Introduction: Wage and salary are the two important elements for designing compensation package for any organization. Often, we mistake considering the wage and salary as synonymous. But there are some substantial differences between them. In order to get higher productivity, it is much more important to know the different between wage and salary. Before comparison, try to penetrate the insights of them.

Wage: Wages are generally paid per hour. This means that you have to be present and working in order to get paid. Most of the time, wage jobs are not as inclusive when it comes to things like paid vacations, or paid sick days. Wage earners often have to give up pay for leaving early, coming in late, missing a day, or taking a vacation. Historically, we often refer to manual labor jobs as wage jobs, and positions. Wage earners are more likely to be found in positions with high turnover, while salaries are often assigned for positions with low turnover Wages are more likely to be added up into additional payments.

If you work 50 hours in one week, you may receive your first 40 hours at the regular pay rate, and the additional 10 hours at 1 ½ times your normal pay rate. Depending on the structure and traditions of different economies around the world, wage rates are either the product of market forces (supply and demand), as is common in the United States, or wage rates may be influenced by other factors such as tradition, social structure and seniority, as in Japan. Salary:

A salary is an amount paid for a particular job, regardless of hours worked, in a package payment system. Salary refers to how much you get paid every year. Salary earners rarely have to punch a time clock, or keep an accurate account of their hours, because they get paid for performance rather than by the hour. Salaried workers are much more likely to have paid sick days and paid vacations, and are not docked pay for being late or leaving early from time to time.

Salary can also be counted in terms other than money. Some companies consider reimbursement for things like medical insurance as part of your salary. You can even find some companies blending education and retirement contributions as part of your salary package. Professional jobs are salaried jobs and it has low turnover compare to wage jobs. It might include a base salary, pension, fringe benefit, bonuses, stock options and so on.

Categories

## International Legal and Ethical Issues in Business

In this paper I will discuss environmental regulations and labor laws in place in Thailand and Singapore. This paper will show that while Singapore seems to have stricter environmental regulations in place in it’s country, the labor laws in Thailand seems to protect its citizens better with better work hour regulations and wage requirements. Singapore’s labor laws can stand to be revisited so as to keep the working citizens safe from greedy business owners. What are Thailand and Singapore’s environmental regulation levels?

Thailand’s government has been known to keep loose environmental standards for investors. Many foreign investors have been used to Thailand’s loose environmental regulation, however, the country’s government is now struggling to deal with tough new environmental regulations. An upheaval from residents in some of the more industrial areas of Thailand has set in motion a movement to toughen environmental regulations, which has many companies like Ford thinking of relocating some of its manufacturing plants.

Singapore, however, has very strict environmental regulations in place, with an extension of liability even reaching to directors and officers of the companies that operate in Singapore. The government in Singapore has passed strict laws to ensure that corporations operating in the country do not compromise the health of their people. Violators of the environmental regulations in Singapore may even face mandatory jail time if found guilty of participating in activities that are deemed harmful to the environment and the people living in the area.

What kind of legislation has been passed in the country regarding working hours and wages? The Department of Labor in Thailand enforces labor laws in the country. Currently, Thailand has some pretty good labor laws in place to protect it’s citizens. The most hours a person can work per day in Thailand is 8 hours per day or 48 hours per week. If the job is deemed hazardous, the workday is considered complete after 7 hours, or 42 hours per week. Employees must be paid overtime pay at a rate of 1. 5 to three times the normal hourly rate when the maximum amount of hours has been surpassed.

The minimum daily wage rate varies, depending on location. Some provincial areas can pay a daily rate of 137 baht, or \$3. 43 U. S. dollars, whereas the daily rate can be 175 baht or \$4. 38 U. S. dollars in Bangkok. Office and management staff working full-time hours can earn about 15,000 baht (US \$375) to 150,000 baht (US \$3,750) per month, depending on the level of management and experience. Singapore does not have any regulations in place with regard to a minimum wage for it’s workers. The Employment Act in Singapore only stipulates that workers be paid timely, which is translated to mean at least once a month.

Workers who make less than 2,000 SGD per month may not be required to work more than eight hours a day or 44 hours per week. Employees working in management positions or higher may be permitted to work longer hours, depending on what terms are outlined in their contract. Do you think the country’s environmental regulation is sufficient? Explain. It seems Singapore has sufficient environmental regulations in place, what with punishments which include jail time for those found guilty of infraction of the regulations.

However, I feel that Thailand still has a long way to go in establishing effective environmental regulations. The people of Thailand are still fighting to get proper regs in place to keep their environment and their people safe and healthy. It seems that Thailand is reluctantly coming around, however, the threat of losing many of its foreign investors because of new environmental regulations might hinder any real progress. Do you feel that the country’s hour and wage legislation is ethical? Explain.

Thailand’s hour and wage regulations are adequate; however, Singapore’s hour and wage regulation still leave way too much room for employees to be taken advantage of by their employers. The fact there is no national minimum wage requirement leaves too much room for employers to underpay their employees. There is also no regulation in place to limit the amount of hours per day an employee can work. There is also no regulation for overtime pay. The lack of regulation in place to determine how many hours per day or week a person can work before overtime pay is required leaves the employees at the mercy of their employers.

References

http://online.wsj.com/article/SB10001424052748704182004575056421383885014.html

http://www.ehow.com/list_5989991_labor-laws-singapore.html

Categories

## Benchmark Jobs

In the business world today, many companies are made up of benchmark jobs and also non-benchmark jobs. A benchmark job is an occupation that is common throughout that field of work. Therefore, it is a job that has standard responsibilities that can be found from one organization to another. A non-benchmark job is just the opposite. It is a job that it is unique to the organization and cannot be found in other organizations of the same occupation.

Through our interviews one will be able to have a better understanding of a benchmark job, with it being applied to reality. Also, through reading, “Lectures on the Measurement and Evaluation” by Saul Rosen one will be able to clearly identify a benchmark job. Throughout this article, it goes into detail about real and synthetic benchmark job. As stated in the article, a synthetic benchmark job is one that has been designed specifically for inclusion in a benchmark model. They use this model of benchmark jobs for system measurements or testing of evaluation.

Throughout the paper we will discuss the importance of benchmark jobs, the process of determination, what has been found in the past, future research, and discussion on personal interviews and information from articles and books. In the end the reader will be able to have a better understanding from our research on benchmark jobs. The importance of a benchmark job Many individuals may wonder why benchmark jobs are important to an organization. Companies use benchmark jobs as a form of evaluation in order to better their company.

Through this information it opens the eyes of the organization to be able to see many new methods and ideas that they may not of otherwise been able to acknowledge. They use these methods and ideas towards improving their effectiveness within the company. Another benefit of a benchmark job is that they can be applied to many different kinds of jobs and also newly created jobs. It is not built to only benefit a certain type of career. The benchmark job process In order to determine a benchmark job, the company can do a survey to compare jobs throughout their industry.

There are several questions that a company can ask themselves in order to determine what occupations within their company are classified as a benchmark job. Why does the job exist? What knowledge is needed? What does the job consist of? What couldn’t be done without it? Does almost every company in our industry have this job? Simple questions like these can help businesses determine what jobs are a benchmark job. Some examples of a benchmark job would be a secretary in an administrative company, a scientist in a technical group, or an inspector in a manufacturing business.

In the reading “Handbook of Industrial Engineering: Technology and Operations Management” it discusses the benchmark job process and how it is used for evaluations. The first step is to select a benchmark job. This is very critical to an evaluation, because the entire method is based on them. These benchmark jobs serve as reference points. The number of benchmark jobs for the evaluation varies, because it depends on the range and diversity of the work to be evaluated. Next, one will want to rank the benchmark job.

They are ranked on each compensable factor, they use the example of a job family consisting of six jobs is first ranked on mental requirements, 1 being the highest, then on experience and skills, and so on. After each benchmark job is ranked on each factor the next step is to allocate the current wages of that benchmark job among the compensable factors. “This is done by deciding how much of the wage rate for each benchmark job is associated with mental demands, how much with physical requirements, and so on, across the compensable factors (Salvendy, Gavriel). ”

Categories

## Labour Markets, Wages and Industrial Relations

Telecommuting is going to change the landscape of labour for years to come. As a matter of fact, the very notion of a job is going to change. A job will be something one takes home to do in the intervals between football matches and household duties, not an activity that reshapes one’s day. Such changes will trigger changes in other aspects of work.

Thus, trade union participation and union power will most probably be reduced. A great part of this influence is based in personal interaction. It is much easier to recruit a person to become a member of the union through direct personal contact than through means such as e-mail. Trade union leaders will turn into virtual figures rather than living beings in flesh and blood, and people will feel less affiliated with the union.

Besides, as the authors point out, there are reasons to expect an inflow of workers into labour who have never or seldom had employment before, including single mothers or disabled people. Those may feel isolated from the rest of the workforce and have had no experience with unions. As a result, they will be less willing to participate in union activities and bargain with their employer. Besides, more developing nations will be included in the workforce, and it is more difficult to recruit people there in the union as they live in remote places and as well have little experience with unions.

However, trade unions will not go away because of telecommuting. There are factors that even call for an increase in their power. For instance, it will become easier to change jobs since it will not involve looking for a job in exactly the same area and workers will probably not have to go to interviews in person. Rather, they may be able to do some kind of audio- or video-interview via Internet. As a result, employees will have more possibility to defend their rights through trade unions as they will not fear loss of job. Communication with trade union leaders will take place through the same interactive means as communication with supervisors – e-mail, telephone, and videoconferencing.

Telecommuting will probably to some extent remove the difference between house prices between capital cities and regions. At the moment, housing is pricey in larger cities since there a lot of people willing to move there because higher salary levels. Those people coming from the regions are prepared to pay a premium on house price as compared to the regions because they know the house price will be offset by gains in wages. As a result, they drive demand up even at higher prices. If differences salary levels are reduced, a probable result of telecommuting, more people will prefer to stay in the regions, and housing there will rise in value against capital cities.

This does not mean that housing will cost the same throughout the nation. First, not all jobs will be affected by telecommuting. It will take time before the pay for manual jobs such labourers, nurses, etc., will get to about the same level throughout the country. People in those jobs will then still be attracted to larger cities.

Second, there are other factors than salary levels that affect housing prices. For instance, in the same city where one can get the same salary living in a nice or unattractive neighbourhood, housing prices will vary from one district to another. The reason for these variations is the difference in infrastructure, ecological atmosphere (as, for example, when the house faces a busy road or something of the kind), and opportunities for entertainment.

Surely in larger cities one can have a much more interesting and varied life thanks to the availability of many cultural establishments, and regions will not soon overcome this difference. That is why people may still be attracted to living in the capital even if wages arrive at about the same level. Besides, formerly the attraction of the remote areas was their cheap prices for everything other than housing, such as food, entertainment, services, etc. A rise in wages will probably change that, making prices go up.

In conclusion, housing prices will go up in regions as compared to the province as a result of dwindling difference in wages. However, prices in capital or larger cities will still remain higher.

Bibliography

Sloman, John & Mark Sutcliffe. Economics for Business.

Categories

## Labor Market Research: Calculating Nursing Wages

This paper will explore two of Mankiw’s (2001) “ten principles of economics” (p. 3) and how these apply to the labor market for nurses. The paper will briefly discuss the two principles: a) “No. 1 People Face Tradeoffs,” (p. 4-5) and b) “No. 7 Governments Can Sometimes Improve Market Outcomes” (p. 11). Afterwards, the paper will discuss how the State of New York calculates nursing wages considering the two principles.

First, the said discussion will identify the factors that could influence the supply and demand for nurses. Second, it will discuss how a nurse’s pay is determined and how the salary is structured. Third, it will provide recommendations on how the State of New York can increase its supply of nurses. Finally fourth, it will summarize how Mankiw’s two principles basically apply to the labor market for nurses.

The two economic principles this paper centers on belong to Nicholas Gregory Mankiw, chairman of President Bush’s Council of Economic Advisers from 2003 to 2005. Principle No. 1, People Face Tradeoffs, refers to the situation when people have to choose one activity or thing over another (p. 4-5). This principle states that people’s choices affect efficiency and equity (p. 5). Mankiw defines efficiency as: “how huge the pie people create” or essentially the wealth that a society produces while equity is “how the pie is divided” or the redistribution of the wealth that the society has created (p. 5).

Meanwhile Principle No. 7, Governments Can Sometimes Improve Market Outcomes, refers to the imperfect actions of government to manage a society’s efficiency and equity (p. 11). Government actions can result to market failure due to externalities and market power (p. 11). On one hand, externalities can either be good or bad (p. 11). It refers to the unintended results of a particular action in pursuing a certain purpose (p. 11). On the other hand, market power refers to the influence of a person, sector, or society due to limited supply or great demand on a particular thing or service (p. 11).

Speaking of service, this paper will next explore the nursing service in the state of New York, then in the entire U.S.A. Brewer and Kovner (2000) identified several factors that influence the supply for nurses in New York. According to the two authors, the factors that affect supply are: a) “negative real wage growth from 1989 to 1996”; b) decreasing “admissions and enrollments in nursing programs”; c) “decrease in licensed nurses”; and d) “aging and retirement of registered nurses or RNs.” Meanwhile, the U.S. Department of Health and Human Services (2003) identified the following factors that influence the “continuing decline of nursing graduates” nationwide: a) “increasing professional opportunities for women outside nursing”; b) “stagnant pay and more onerous working conditions for many in nursing”; and c) “a decline in pubic perception of the attractiveness of the nursing profession.”

For the demand-side, the U.S. Department of Health and Human Services noted that: “The U.S. Census Bureau projects a rapid increase in the elderly population starting around 2010 when the leading edge of the baby boom generation approaches age 65.” Hence, the department concludes: “…the rapid growth in demand for nursing services is especially pronounced for long-term care settings that predominantly provide care to the elderly.”

Next in the discussion are: a) how a nurse’s pay is determined, and b) how the salary is structured. Brewer and Kovner (2000) pointed out that: “Hospitals are having significant difficulty financially due to the Balanced Budget Act and state legislation.”  The authors also concluded: “Funding changes that effect hospital financial viability will significantly influence the balance of supply and demand.” Moreover, Brewer and Kovner (2000) observed and opined: “Current shortages are relatively localized and moderate in severity, and if hospitals achieve sufficient financial relief politically they may abate.”

With these evidences, government essentially determines a nurse’s pay. As for how RN salaries are structured, Brewer and Kovner (2000) suggested that: a) great demand versus limited supply; b) experience; c) specialized skills; and d) regional demand variations led to: “1) ease with which new graduates are finding employment; 2) organizations offering sign-on bonuses; 3) anecdotal and news reports; 4) focus group reports, and 5) surveys of employers which indicate difficulty hiring RNs.” The said factors essentially determine how RN salaries are structured.

Thirdly, due to the factors previously identified and discussed, this paper recommends that the State of New York increase its supply of nurses thru: a) recruitment of RNs from abroad, and b) encouragement of retirement homes abroad in countries with sufficient supply of RNs that are acceptable to the U.S. or those that can comply with U.S. standards.

Finally, this paper notes that Mankiw’s first and seventh principles have a profound effect on the supply and demand of nurses, RN pay, and RN salary structures. One, based on the data previously discussed, the U.S. shortage in RNs could be attributed to two major factors: a) State legislation and the Federal government’s Balanced Budget Act which essentially reduced the RN supply, and b) the retirement of baby boomers and their great demand for health care.

Note that both factors relate to government policies or decisions. Specifically, Roosevelt’s New Deal triggered the baby boom generation while Reagan pushed for the Balanced Budget Act. Two, due to the said government policies which were intended to manage efficiency and equity, the U.S. DHHS observed that people made choices that affected the supply and demand for nurses. This trend shows how positive and negative externalities came into play and determined the current market power of RNs.

References

Brewer, C.S. & Kovner, C. (2000). “Abstract: An Evaluation of the Supply and Demand of Registered Nurses in New York State.” Gateway, National Library of Medicine. Retrieved July 14, 2007

Mankiw, G. (2001). “Ten Principles of Economics.” Principles of Microeconomics Second Edition. Fort Worth, TX: Harcourt College Publishers. pp. 3-15.

U.S. Department of Health and Human Services. (2003). “What is Behind HRSA’s Projected Supply, Demand, and Shortage of Registered Nurses?” Health Resources and Services Administration. Retrieved July 14, 2007

Categories

## Gender Wage Discrimination in Pakistan

| Gender Wage Discrimination in Pakistan| Evidence from Pakistan 2008/09 and 2010/11| | | | Table of Contents Introduction2 Literature Review2 Methodology3 Variables Used – Characteristics of Workers5 Results7 Discussion7 Bibliography8 Appendix A9 Selectivity Bias Logit Regression Results:9 Introduction This paper explores the dynamics of gender wage discrimination in Pakistan for two data sets; Labour Force Survey for the year 2008/09 and 2010/11. We will explore whether or not women are discriminated against, as it has been suggested for a predominantly Islamic country like Pakistan.

Labour theory addresses many reasons for wage discrimination. For the purposes of this research we will concentrate on ‘employer wage discrimination’. Following this our research will be aimed at discovering if women are paid less than their male counter-parts especially with the same set of characteristics. For this purpose we will use the Oaxaca-Blinder method to calculate the coefficient for discrimination across genders. Literature Review The basis of this paper is the work done by Oaxaca and Blinder in 1973 about wage discrimination models.

In the paper ‘Interpreting the Decomposition of the Gender Earnings Gap’ (Giaimo R. 2007) this method has been applied to find out how different characteristics change the discriminatory behaviour of employers in Italy. Oaxaca’s method for calculating discrimination was further adapted in the paper ‘Gender Wage Discrimination at Quantiles’ (Javier Gardeazabal 2005), and was used to calculate discrimination coefficients for quintiles. In a study conducted in India (Tilak 1980), it was found that the incidence of unemployment was higher for women than for men with the same characteristics.

In this study the only characteristic that was taken was education. This is a different angle to look at discrimination from what this paper will do. Rather than looking at the unemployed, this paper will see the women in the labour force and if they face discrimination with respect to their wages. However, the underlying aim and also the hypothesis formed are the same. The paper ‘Wage Differentials and Gender Discrimination: Changes in Sweden 1981-98’ (Mats Johansson 2005) explored the wage gaps between men and women in Sweden.

They found that the wage gap was 14%-18% during the 1990’s. Their study also indicated that this difference could not be explained by applying the job requirements and qualifications to women’s wage function. The conclusion was that there is undoubtedly some other factors other than the characteristics of the workers that determined the wages in the Labour Market. Methodology This paper calculated a coefficient for Gender Wage Discrimination from the Oaxaca-Blinder decomposition. D= Xf? m-Bf+ ? m(Xm-Xf) Here ‘? ’ is a vector of characteristics of workers.

Therefore, the first part of the equation shows the wage differential between males and females on the basis of characteristics. Second part of the equation normalizes characteristics, for females in this instance, and then subtracts the wage differential based on characteristics, to give us the overall differential based on discrimination. As a control, we also work out the converse of this Oaxaca Blinder Decomposition as follows; D= Xm? m-Bf+ ? f(Xm-Xf) To control for selectivity bias, we have also used the ‘Heckman Procedure’.

A multi-variable Logit model was run and three variables (Lambda1, Lambda 2 and Lambda3) were calculated to act as control for variables missed in our model. This discrimination coefficient has been calculated for two data sets using characteristics such as age, marital status, education level, province, region, professional trainings and status in the family. These characteristics have been selected after being shown significant as the determinant of wage. Natural log of wages was the dependant variable in the following regression; Table [ 1 ]: Wage Determinants – LFS 2008/09

Table [ 2 ]: Wage Determinants – LFS 2010/11 Our results are much better for the data set of 2010/11. The signs of education are expected. For the data set of 2008/09, signs for education are positive which does not support theory. Even after efforts to remove multi-colinearity, they still show positive signs. Most of the variables in the regression are also insignificant. However, when we take the data for LFS 2010/11, and correct it for selectivity bias, we get much better results. Most of the variables are significant as well as show the correct signs. The same algorithm was applied to both the data sets, and the same variables have been taken). Results of Logit models for correcting selectivity bias are attached in Appendix A. Variables Used – Characteristics of Workers Summary tables from LFS 2010/11 1. Age * Theory suggests that this is one of the most important determinants of people’s decision to work. 2. Marital Status * This variable was taken as a dummy variable in the regression. * It is a significant variable in the decision to work, especially in developing economies like Pakistan. 3. Province This is also taken as a dummy. The Baluchistan province was omitted from this analysis. However, the calculations of the Oaxaca Blinder method take this omitted variable into account. This is because the method takes the vectors of the estimated regression equation. 4. Region * Whether a person is from a Rural or urban background has impact on the opportunities and the job growth pattern. 5. Education Level * This is linked directly with the variable wage. * This is again taken as a dummy variable, and higher education was omitted from the regression. 6. Migration (Rural-Urban) Although not a very significant variable in our regression, there are other empirical studies that have shown how the migrated families have better opportunities for work than those who do not. 7. Literacy * This is a dummy variable, and is significant in our analysis. 8. Selectivity Bias Variables * These are Lambda’s in the model. And have been calculated using the Heckman Procedure for controlling selectivity bias. Results To find the discrimination coefficient a matrix exercise was done in Stata using the data from LFS 2007/08. This presented the following equation; D= Xf? m-Bf+ ? Xm-Xf D=10. 030812+-7. 4166332 D= 2. 614212 The discrimination coefficient for LFS 2010/11 was calculated as follows: D= Xm? m-Bf+ ? fXm-Xf D=0. 11964462+0. 31341527 D= 0. 43305989 Just looking at the numbers we can say that discrimination have gone down significantly over the last two years. Whether this is actually the case, or this is just due to the problems in the data, we cannot be sure. However, we think that the result for 2010/11 is a better estimate overall. The results show that women are at a significant disadvantage in Pakistan’s Labour Force. These results are quite expected.

However, we also need to take the problems in data collection and measurement into account. Many of the cottage and small scale industries are not counted in the LFS and they are a prime source of employment for women in Pakistan. Discussion There are many limitations of this study. First of all this can be made more powerful if panel data is used, however, there are no sources of such data. Secondly, an easy method of expanding this study would be to do an inter year comparative study. There are more limitations that are related directly to the data that we have used.

Many questions have been raised about the methodology and the authenticity of the data in Labour Force Survey of Pakistan. However, this limitation is beyond our control. There have also been questions raised about the Oaxaca-Blinder method of calculating wage discrimination. While we have attempted to review paper that have used this technique and have achieved good results, there are still many questions about the technique, still. There are few policy implications that we can derive from these results, especially if we look at the significance levels in the data for 2008/09.

However, this paper does prove to some extent that there is a problem of gender wage discrimination is Pakistan. We can attribute a lot of this to social factors as well; women do not want to work in most professions, so we can also argue that there may be a case for discrimination by the employees rather than the employers. Bibliography Giaimo R. , Bono F. , Lo Magno G. L. “Interpreting the Decomposition of the Gender Earning Gap. ” University of Palermo Journal, 2007. International Standard Industrial Classification of all Economic Activities (ISIC-Rev. 2, 1968). ILO. 2012. http://laborsta. lo. org/applv8/data/isic2e. html (accessed 2012). Javier Gardeazabal, Arantza Ugidos. “Gender Wage Discrimination at Quantiles. ” Journal of Population Economics, 2005. Mats Johansson, Katarina Katz, Hakan Nyman. “Wage Differentials and Gender Discrimination: Changes in Sweden 1981-98. ” Acta Sociologica, 2005. Stat. Stata. 2012. http://www. stata. com/meeting/5german/SINNING_stata_presentation. pdf. Tilak, Jandhyala B. G. “Education and Labour Market Discrimination. ” Indian Journal of Industrial Relations , 1980. Appendix A Selectivity Bias Logit Regression Results: LFS 2008/09 LFS 2010/11

Categories

## Minimum wage, good or bad?

Having a job had been a premiere concern for the people particularly when they have the strong desire to live. Nowadays, money seems to make the world go round. Without the valued piece of paper, we could not purchase the basic necessities in life such as food, clothing, shelter, and education. Given this perspective, a person then would strive to earn the valued paper. As this is the case, some people then would try to look for suitable jobs. A person doing so should then take into account the information about minimum wages.

MINIMUM WAGE

Minimum wage is known to be “an important cornerstone of Government strategy aimed at providing employees with decent minimum standards and fairness in the workplace (“National Minimum Wage,” 2007).” It is in this case that minimum wages would be the basic pay that an employee would receive. I believe then that the minimum wage law is a clear indication then that the government is trying to adhere to the concept of justice and fairness.

I see that the main purpose of the minimum wage law is to safeguard the working class from any abusive companies and the likes. This working people then are known to be workers (“The Definition of a Worker,” 2007) and the term employee would then be loosely used in this paper to pertain to workers. The question then is whether or not minimum wage is good for the people then my answer would certainly lead me to assert that it is good for the people.

The concept of goodness or badness is not the issue here but I believe that the concept of bad and good would spring from the idea if whether or not minimum wage law is beneficial. After clarifying this point, my argument would then have to be lean towards proving the beneficence of minimum wage law particularly in the United States.

Minimum wage is under the Wage and Hour Division. It was said that minimum wage is part of the labor laws that the United States of America has. It is dully under the Fair Labor Standards Act that employees should receive a minimum wage rate of \$5.85 per hour as of July 24, 2007 (“General Information on the Fair Labor Standards Act (FLSA),” 2007).  This provision is used in order to address the growing economic factor of the land.

It could be inferred that the increase in the minimum wage would be to address the growing cost of living. Employers then should be able to address these changes for the benefit of their employees and for the benefit of a good working condition and ambiance for the employees that would lead to an established quality of the goods to be products. Minimum wage law then has two beneficial outcomes.

First is that since it was made to protect the workers, then this could be an assurance that the people who are working would have the fair amount of share from the labor that they have done for the employer. Also in connection to this perspective is that the workers would be protected against abusive employers. Without the Minimum Wage law then the employer could just impose on unfair hour rates and even unfair working hours. It could be seen then that a person who are naïve about the rules of the Labor domain would be lost. Realistically speaking, some employers could become abusive with the labor rights of their employees.

The main reason for this would be a twisted sense of fairness and a dosage of greed. The Minimum wage law then would be an assurance to the workers that they are protected from these kinds of employers. The next step then that the government has to do is to ensure that the rules would be followed and that they should be able to uphold their own laws. Some countries are unfortunate when it comes to the implementations of the laws. The rules may be set but there could be some employers who would feed on the ignorance of their workers. This would be deceitful but as I have said earlier, this is greed that drives them.

Second is that it would also be beneficial for the employers as well. A healthy or conducive ambiance for work would mean that an employer could address the needs of the employees. The supposed needs then are the monetary factor of the work. If the employers could satisfy this basic need then the services could either be maintained or it will grow considerably. It was said that a person’s capability in his/her work may be related to the job strain that he/she would feel (Gretchen M. Spreitzer, 1997).

If this is the case then the efficiency of a worker’s job would then be affected if his/her stressful disposition would not be improved. This stressful disposition may be due to the strain that he/she might be feeling when it comes to his personal matters. Some people may frown on this point since work ethics would declare that personal matters should not be mixed with business matters. But psychological impacts could not be easily dismissed in this case. A problem would then arise in the work place.

The objective of the government then to put up this law is noble. But what should be taken into account then is the implementation of this law. People should then spread the awareness of this law so as those who are abused by their employers could clamor for their own labor rights. One of the problems in the labor sector is the wage problems and I believe that the minimum wage law could ensure that the rights of the workers could be fulfilled. The question of its beneficence then would be the next recourse.

It could be inferred then that the beneficence of the said law then could be considered good. Since it was already stated before that the goodness or badness of the topic would be regarded through the beneficence that the law would bring then it would be remarked that the minimum wage law is a good output. It will safeguard the workers and it could ensure stability and fairness in the country. The social hierarchy may still be present but by giving a rule for the wages would help ensure that the poor who are trying to make a living would not be subjected further to the harshness or greed by other people.

References
The Definition of a Worker [Electronic (2007). Version]. The Minimum Wage and Therapeutic Work. Retrieved August 23, 2004 from http://www.berr.gov.uk/files/file36956.pdf.

Gretchen M. Spreitzer, M. A. K., Stephen W. Nason. (1997). A dimensional analysis of the relationship between psychological empowerment and effectiveness, satisfaction, and strain (Publication. Retrieved August 23, 2007: http://findarticles.com/?noadc=1

Categories

## Minimum Wage: My Case to Raise It

Introduction

In my opinion, minimum wage should be raised.  It is time for the United States to stand up for the original purpose of the Fair Labor Standards Act.  The low wage is hurting the economy as a whole because it is squeezing the lower income level so tightly that they have to make choices between paying rent or buying food.  The three main reasons for this increase are as follows.  First, an increase in minimum wage would directly impact those at the bottom of the economic ladder.  Second, by increasing minimum wage, you also increase the value of work.  Third, because the cost of living has increased so much, the cost of work must follow its lead.  Due to these reasons, minimum wage must be raised.

History

In 1938, the Fair Labor Standards Act was passed.  This was a reaction the hard work of women like Jane Adams and Eleanor Roosevelt who were trying to end child labor and increase the standard of living in the poorest communities. The labor unions were advocating for it as early as the late 1800’s when women in the Lowell factories claimed they deserved equal pay and treatment.  Its passage was also influenced by industrial disasters like the Triangle Shirtwaist Factory fire in 1911, which killed many of the young workers in New York.  The Jungle written by Upton Sinclair about the struggles of the working class in Chicago, influenced politicians and communities and caused them to start looking at its workers in a different light and with increased understanding.

It set the maximum work week, standards of child labor and overtime pay.  It also created minimum wage.  This is the idea that there is a minimum standard of pay that everyone should be given.  It was set at twenty five cents an hour.  The act succeeded in many ways but it failed in keeping pace with inflation.  Originally, this was written into the act.  Now, raising minimum wage to keep pace with inflation has become a political issue. Usually democrats are in favor of raising the wage and republicans are against it.  Because the federal government has failed to protect its people by raising the wage, many states and cities have taken it upon themselves to raise their own wages.

Argument against

The conservative argument against raising the wage is primarily economic.  They say this action hurts the whole economy and doesn’t help the lower classes at all. (Chapman)  Their argument is that if employers have to pay more, they will limit the employees they have or even take their work overseas, which is a valid threat.  They claim that in reality, the people who benefit are in higher economic classes because they learn to manage their businesses more efficiently and the boom lines their pocketbooks.

My Argument

As my thesis demonstrates I disagree with the conservative stance.  I feel that an increase in the minimum wage would help the people intended.  It would add value to what they do and keep up with the cost of living, as it was originally designed to do.

The lower income families in the U.S. are hurting. “Today more than 28 million people, about a quarter of the workforce between the ages of 18 and 64, earn less than \$9.04 an hour, which translates into a full-time salary of \$18,800 a year—the income that marks the federal poverty line for a family of four.” (Working and Poor)  It is extremely difficult, if not impossible to raise a family on that amount of money.  The argument has been made that you can make more money on welfare than working for minimum wage.  What kind of lesson does that teach?

So, is the answer raising minimum wage.  According to Jeff Chapman in his brief for the Economic Policy Institute, it is.  “If the federal wage were raised to \$7.00, the bottom 40% or households would receive nearly 60% of the benefits.” (Chapman)  He goes on to say, “Raising the minimum wage provides income support to families in need.  While it is important to understand that the minimum wage should not be judged solely on its efficiency at targeting low-income families, research shows that it does just that.”(Chapman)

Business Weekly agrees with these finding. “Lifting the minimum wage by \$1.50 an hour, would boost the incomes of 10 million workers.” (Working and Poor) My research indicates that raising the minimum wage would be an effective way to target lower income workers and increase their income.  This would help offset the cost of inflation, as I will prove is a necessity.

Originally, the wage was designed to increase as the cost of living increased.  This system makes sense.  If things cost more, people need to make more money to afford them—not luxuries, necessities.  If this adjustment is not made, the consequences affect the family, not just the worker. “Some experts on homelessness say the numbers are growing because of the widening gap between low pay and high rents.” (Kaufman) “Real pay for the bottom 10 percent of wage earners rose less that one percent in adjusted dollars from 1979 to 2003, according to the Economic Policy Institute. (Kaufman)

If the wage doesn’t keep up, how can people afford rent?  If I make just enough to cover my bills, and my rent increases but my salary doesn’t, I have no choice.  I would have to get another job, which may not be a possibility, try to work overtime, which my job might not allow, or move.  What if I live in the cheapest apartment available?  This is the cycle that must be stopped. It leads to hopelessness, debt and in some circumstances, homelessness.

“Even if the minimum wage were not well-targeted at helping those in need, it serves an important role in the U.S. economy and society.  It is a fundamental statment of principle about the value of work, opportunity and the responsibilities of employers.” (Chapman) Increasing minimum wage validates the worker.  As the girls in Lowell were looking for acknowledgement of the value of their work, so do the workers of today search for validation for what they do.

When the government raises the wage, they are sending a clear message that they value the workers and understand their position.  The C.E.O. of Costco is quoted as saying, “We no longer have a motivated working class.” (Working and Poor)  This is a huge problem.  If you can’t take pride in your work, what’s the point of working at all, especially if you can take advantage of the welfare system? If no one values what you do, why try to do any better than the bare minimum?

Raising the minimum wage demonstrates employer accountability.  The government is making them responsible for the people their success rests upon.  “No employer should be allowed to unreasonably profit by exploiting the lack of negotiating power of low-wage workers.” (Chapman)  Labor simply has no power anymore.  The unions have been broken and they have no voice.  Someone has to hold the employers accountable.  Someone must step forward for the workers.

An increase in the wage would do just that.  As I have shown, it does have a direct affect on those in the deepest need. “Everyone should have the opportunity to earn a decent wage.  No American should be compelled to work at a rate that amounts to the federal poverty level.  This is equally true for a middle-class youth working to raise money for college as it is for a single mother supporting a family.” (Chapman)

Conclusion

Minimum wage is one small part of the Fair Labor Standards Act that was designed to protect the worker.  Society saw its people falling through the cracks and they stood up for those people, claiming that everyone who works hard deserves a chance to succeed.  Minimum wage is the foundation of that success.  I have shown three strong reasons for the need to increase minimum wage.  The first is that raising the wage directly affects those in the greatest need.

They do benefit from a raise as it corresponds to the raise in the cost of living. My second reason demonstrated this.  As the cost of living increases so should the minimum wage.  This way, workers can easily adjust their earnings to cover new expenses and not have to make hard decisions that could greatly impact their families.  The third reason is philosophical.

Adding value to the worker validates the job that is being done.  When employers are held to greater accountability, the working class feels they are appreciated.  This is so important for our society.  Welfare shouldn’t have to be an option for a family willing to work and take part in the economy.  Without a raise in the minimum wage, this might be a serious threat.  “Equality means dignity.  And dignity demands a job and a paycheck that lasts through the week.” (Weisman)  I feel this quote from Dr. Martin Luther King Jr. conclude my thoughts on this subject.

Categories

## Minimum Wage

The concept of a minimum wage has been around for over a century; New Zealand was the first country to have a minimum wage, enacted in 1894. The United States introduced minimum wage during the Great Depression in 1938. (Anderson) A minimum wage is a price floor; this sets a base line wage that companies have to pay their employees. Currently in the United States nearly 75 million people work minimum wage jobs. (Goldstein) In 2004 the federal minimum wage was \$5. 15 an hour and only 12 states had higher minimum wages. (Wall Street Journal) Today it is \$7. 5, last updated in 2009. Polling shows that the public supports an increase in the minimum wage. (Kusler) Minimum wage brings together theoretical economics and real world economics, by coming up with a number that is as close as possible to the natural equilibrium while still providing a wage that workers can live on. It has positives and negatives, but I think the positives outweigh the negatives. Proponents of the minimum wage want a base line wage that workers can earn so they are not taken advantage of and can earn enough to provide for their families.

This side of the argument assumes that the employers are making a profit for themselves and will exploit their workers as much as they can. Minimum wage is a protection for workers from getting exploited and not being able to provide for their families. Many argue that minimum wage is too low at this time, leaving millions of workers still needing assistance from the government, which is paid by tax payers. As tax payers we are picking up the slack of low wages paid to low earning employees. By increasing the minimum wage, we would be giving more purchasing power to the people who are most likely to spend it.

For example, in 2009 in Georgia the minimum wage was the current minimum wage of \$7. 25. If you spend a third of your income in housing, the recommended amount, to rent a one bedroom apartment in Atlanta of about \$800 you would need to earn \$16 an hour. (Gatlin) As this example illustrates, the wage that workers are getting today is not allowing them to support themselves, making the government have to step in with social services to help them. (The Wall Street Journal) If minimum wage had increased with inflation from 1968, people would be earning \$9. 2 an hour, which is a lot closer to a living wage. (Gatlin) Other calculations suggest that if it had followed that path today, the minimum wage would be \$10. 55. (Goldstein) Earning more is a reward for low wage workers, they are more likely to be loyal, more productive, less likely to not show up for work and shirk their duties. What owners think they save in payroll with paying workers less, they spend looking for new employees because old employees are leaving for jobs that pay higher wages.

They also lose the investment that they made in training the person, that training will now have to be invested in someone else. Micah Domato, who runs A. L. Bazzini, a store that sells nuts, in New York City pays his employees an entry wage of \$8; he keeps it at that level because other stores would not be able to compete with his pricing. (Wall Street Journal) If employers restructure their wage scales almost 400,000 more workers would benefit; they are the ones working slightly above minimum wage.

Indeed, on January 1st, 2012 eight states raised their minimum incomes to adjust for inflation and over 1 million workers benefited. There is so much agreement on this topic that both Mitt Romney and President Barack Obama have said that they support an automatic increase to keep up with inflation. (Kusler) In conclusion, raising the minimum wage will give purchasing power to low income earners who are the people who need it the most. It will also create more business because people will be buying more with their increased incomes.

People who are against minimum wage feel that it creates a surplus of unemployed workers. This surplus can’t get hired because there isn’t enough money to pay them from the profits that they are making at that level of production. Not only will it slow job growth, but an increased minimum wage will actually lead to even more job losses than the first minimum wage. For example, in 2009 in Georgia, the unemployment rate rose from 4. 5% to 10. 7% in 18 months around the time when the latest minimum wage was set.

This price floor will limit job creation in the long run for the least skilled workers. Their employers will have to calculate if the new hourly wage exceeds their hourly product of labor, and then employers will have to see if they should substitute the worker with a more productive worker that will work at a level that is more than his or her wage or they will keep the costs they would have spent on a worker. In both cases, increasing minimum wage is a risk for the current worker. An alternative for minimum could be income subsidies, which can be considered less market intrusive. (Kusler)

The National Federation of Independent Business says a tax credits for heads of households is another good alternative that won’t shrink job opportunities or place collateral damage on small businesses. Higher wages can discourage employers from hiring new employees because they can’t afford them. They will in turn maximize their profits with their current employees. The governor of New York in 2004 George Pataki said he would rather the increase be federal minimum wage than state wide because it gives states with lower minimum wages an advantage. In the end, an increase in the minimum wage is feared to only bring disaster.

Fewer people will get hired and small business will have to take on a cost they cannot afford. This issue has been debated close to home as well. On November 6 of this year, San Jose passed a law with 58% of the vote that would increase the city-wide minimum wage from \$8 to \$10 an hour. This new minimum wage is what it was in 1968, adjusted for inflation. Only San Francisco, Washington DC, Santa Fe and Albuquerque have set their own minimum wage before. The measure started in a San Jose State University classroom. The students drafted the measure and got enough signatures to turn their idea into Measure D. Goldstein) In San Jose an average minimum wage worker salary is \$1,280, which is not even enough to cover the average rent of \$1,800. More people, therefore, have to rely on government assistant to get by. This new law will help 40,000 low wage workers. (Myers-Lipton) The Mayor of San Jose, Chuck Reed, sided against it and the City Council was divided. The Mayor says that it will take about \$600,000 to put the law in place because they have to make sure everyone follows it. This will put a huge strain on the city’s budget, in addition to the 25% increase in their pay roll for the city’s own minimum wage workers.

The opposition says that this increase would lead to cuts in staffing or hiring fewer workers. For example Fourth Street Pizza says that they will have to consider some increase in their prices so they don’t have to lay any one off. (Rusk) Measure D will go in effect early 2013. Only the future will say what effect this measure will have on the economy of San Jose, I hope it proves to be a positive outcome. Minimum wage helps keep a balance between the theoretical economic world and the real world by giving workers better wages than they would otherwise have.

The big debate now in many states and municipalities is whether to keep it or increase it. Increasing would lead to workers having better lives and being more loyal and productive at work. Others say increasing it would lead to staffing cuts and fewer jobs because firms wouldn’t be able to cover their cost of paying workers more or having more of them. San Jose just raised its city minimum wage by voter approval. In the future it could go both ways, but hopefully it will improve the economy because people will have more money so they will spend more money.

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## Poverty: Minimum Wage and Economical Unstable Childhood

College Essay Carlos Urias 9/1/2011 Robert Leighton once stated, “Poverty keeps the vision pure. ” I fully understand and can relate to this quote as it pertains to my life. Exposure to economic difficulties at a young age helped shape the person I would grow up to be. Being economically troubled is an experience that has changed my character and has stimulated the decisions I have made throughout my life. Through the hardships of living an economical unstable childhood I have learned to embrace opportunities, the importance of perseverance, and become a charitable person.

The cause for being at an economic disadvantage can be traced back to when my parents immigrated to the United States. Because my parents were immigrants, they had no documentation and had to work vigorous hours for minimum wage. They moved into California, and this is where I was born. We lived in a poor neighborhood and there was only enough money for the things we needed and not for what we wanted. Rising rent prices and minimum salaries were among the contributing factors that led to my family struggling to stay economically stable.

My parents had to each get multiple jobs to try and make us enough money to proceed on living here. The lack of money resulted in problems at home, work, and the neighborhood. Alongside my family, although just a child, I also suffered the consequences of living in these conditions. Because we were living like this, I witnessed a lot of violence, hate, and many hard times. I understood that we were at a disadvantage and learned from my experiences as I witnessed how my family tried to cope with all the problems.

Although there was not any money to throw around, I learned many valuable lessons from my family, my environment, and the situations we were living in. As a result of having an economically unstable childhood, I have learned to embrace opportunities. When my family and I were living under the economic pressures of California, it was clear to me that we did not have opportunities of any kind open to us. It is because of this that we were living the way we were. As I grew older, I realized that there were so many opportunities for me and the options were limitless.

Because I remember the hard times in which I came from, I do not take this for granted and take advantage of every beneficial opportunity that is presented to me. My experiences taught me that not everyone has opportunities available to them and the ones that do should be thankful and not take it for granted. These hard economic times led me to see the importance of having perseverance. I admired the way my parents would work so hard day after day and their hopes and dreams would never be crushed.

I realized that you cannot give up on what you desire the most. As a child, I always told myself I would pull us out off the hard times; however, I had no idea how. I know now that the key is perseverance. I also understand now that having perseverance helps you keep pushing forward and makes you never question your goal, but instead keep striving for it. Without perseverance we never would have gotten through the economic troubles and the conflicts that came along with that.

Lastly, being economically unstable has shaped me into the charitable person I am today. As a kid I came to understand that many people did not have everything they wanted and that they too faced extremely hard times and struggled to live. Because I can relate, I have sympathy towards everyone who lives in those conditions, or even worse than that. My childhood showed me that there are some things you have no control over and sometimes living in poverty is one of them.

For this reason, I try to help as much as I can and extend my hand to those who need it the most. Living in an economically unstable childhood helped me to appreciate opportunities that may rise, realize the importance of perseverance, and become a helpful person towards the needy. Taking into consideration that not everyone has the opportunities that are available to me, I take advantage of them. Perseverance is needed to harness these opportunities and make the most out of them. Because I know where I have come from, I know where I am going.