Written by Jarrod Jong Zhiren
Statistics show that minimum wage has a minimal effect on inflation despite arguments that it might increase the inflation rate in the economy. The author sides with the argument for a hypothetical increase of minimum wage under such persuasion.
Minimum wage exists in various sectors. The tendency to use employees who lack industrial knowledge is strong. Delegation of work may be done in a way that is unfair to the employee(s). The pay that is made for the employee may not be proportional to what should be instead remunerated to the employee. Imagine a convenience store, where the hourly wage is below RM10. The amount of work done might not make up for it, in comparison to the work done by a professional instead with a much higher hourly wage. Though of course, we are talking about a difference in skill set, physical work should not necessarily be undermined in its usefulness. Lack of acknowledgement for physical labour often leads to riots where large scale protests happen due to noticeable unfair treatment. Employees without knowledge of the law in their relevant working field may not be able to circumvent unnecessary forced labour and as a result overexert themselves physically, which might even prompt medical law intervention. Therefore, this area of the law is not insignificant as it might seem on the surface.
However, for the employee to seek legal action or litigation against the employer through employment law would further cost the employee. This would go against the reasons as to why the employee sought to work in the first place, and in midst of the potential chaos that might ensue, due to reasons the employee applied in the first place as well as fearing the repercussions of legal action, might forfeit such a right. Furthermore, any employee who chose to work at a minimum wage likely does not possess knowledge of economic concepts. Minimum wage is a definition. Classical political economists might refer to the minimum wage as to be defined as a mechanism for expressing fairness norms, otherwise known as the social wage rather than wage in accordance with the market fluctuation [1]. This means that Human Rights are to be taken seriously within this contextual sphere of definition. With such knowledge, being reassured, employees might find legal action to be more comfortably actionable.
To go to the degree where legal action is required, however, would be redundant and in turn, causes further problems for the employee. As such, what the hypothetical government can do in the public sector is to increase the minimum wage in accordance with the above-mentioned definition. However in the private sector is where issues may lie, since employers could be internationally connected, or have legal protection against such measures with the aid of legal advisors. Therefore, is it ideal to raise the minimum wage in the private sector (of course, taking into consideration the differences in labour required in different variations of outlets, or stores)? This is the more important question that should be focused on.
Imagine a businessman who establishes a chain store in a country, adopting its tax regulations upon proper surveying of jurisdictional tax requirements. Such a businessman would ideally be equipped with the foresight of the possibility that employees might be aware of such advantage taking skills and would in turn arm themselves legally. However, by comparing the financial clout that is juxtaposed, it is apparent that it would be superfluous for the employee to go against a big company lead by a powerful individual or company board. More often than not, minimum wage employees do not even think of that possibility. However, for hypothetical reasons, we state this potential fact. As such, riots are far from ideal given the number of employees possibly working, counting shifts, would not be over an average number of 10. If it was a factory, it would be related to the public sector, given permits are required for an establishment to be connected to the ground. Coming back into the private sector, it would therefore be relevant to look into the particular country’s employment law, for which the private company must adhere to such regulations.The case for a raise in the minimum wage, even for private sector companies, can be looked at from a different perspective. Increasing by percentage might not cost the company too much in view of its potential returns. Minimum wage salaries usually go under 2 digits, and percentage increases do not increase the number exponentially as compared to if it was done so for a big number, with big salaries. The morale boost for the employees proves to be beneficial, which employers would perhaps be inclined to execute. Employees are more likely to retain their job as well and are more valuable to the company in terms of productivity [2].
Bibliography
[1] Understanding the minimum wage: Political Economy and Legal Forum-The Cambridge Law Journal, 78 [2019]- LexisNexis
[2] https://fee.org/articles/the-case-for-abolishing-minimum-wage-laws/