The Minimum Wage Crisis By: Mia Foucek

The Case Study The 5W’s: “The Deadliest Garment-Factory Accident in History” Who- Workers in garment factory in Saver, Bangladesh Managers of the factory Ali Ahmed Khan (head of the Bangladesh Fire Service and Civil Defense) What- Collapse of garment factory Ongoing pattern in developing countries where workers are paid low wages Where- Saver, Bangladesh When- April 24, 2013 Why- Lack of proper building permits/ fire hazards Building was no made to support heavy machinery

Minimum Wage: What is it? The lowest wage permitted by law First enacted in New Zealand in 1894 More than 90% of countries around the world have a minimum wage Highest– Australia ($15.75 an hour) Lowest- Mexico ($.65 an hour) President Roosevelt enacted a minimum wage in 1938 that “an hourly worker had to be paid at least $.25 an hour” Laws are proposed by states to lobby a higher MW There are many that lobby against raising MW Large corporations Minimum wage workers are hired by highly profitable, large businesses Higher profit margin for large companies How much is minimum wage? In US, minimum wage is $7.25 (except for 5 states)

Graph taken from: http://en.wikipedia.org/wiki/Minimum_wage

Map of Global Minimum Wage per Hour in U.S Dollars

Inflation and Minimum Wage What is inflation? A general increase in prices and fall in the purchasing value of money Is there an increase in the cost of everyday items if minimum wage increases? NO! Minimum wage only makes up a small part of the cost of an item (others include manufacturing, transportation, equipment, advertising etc.) “Think Again: A Wage and Price Survey of Denver Area Fast Food Restaurants” A survey that included four multi-national fast food chains  each one employing minimum wage workers. -Concluded that higher prices do not make for higher wages “Survey results indicated that higher starting salaries are coupled with only higher, identical, and in many cases lower prices than those in stores that paid a lower starting wage.” Universalliving.org Deregulation: The act or process of removing or reducing state regulations

Living on Minimum Wage The median income of those in New York is $56,951 $7.25 = weekly income of about $290 ($15,080 annually) With a salary such as this, it is almost impossible for a single parent to support their children In a 1996 study, 21% of Americans were supporting extended family Some Examples: Groceries- The average American spends $6,443 on groceries yearly (about $60.00 per trip)  11% of a minimum wage employee’s annual income Food Stamps  47,635,297 people on food stamps (SNAP) Rent- Average person in our country spends about $821 a month

Push for Minimum Wage Increase and Barriers President Obama’s work with wage increase: Requested federal wage increase to $9 an hour in early 2013 Political parties coming together for increase Many in favor of increase to $10.10 by 2015 (“uphill battle”) Is this still not enough? Barriers include: Big businesses lobby the government against raising minimum wage The economy of a country’s government (GDP) Lack of education (of both children and adults)

Minimum Wage Around the World The Developing World: Uneducated people work for low wages to support large families This leads to an increase in child labor due to lack of education Mangers in factories do not pay attention to building codes/ fire hazards Puts all workers at an increased risk of building collapse For example: Workers in Bangladesh factory were concerned about their safety Managers threatened to withhold what little pay they offered if workers did not come to work Lack of “collective bargaining” Frequently, workers are aware of their underpayment, however do not know the extent of the “lowballing”

China and Thailand China: Thailand Migrant peasants from countryside immigrate to large cities to find better work Due to lack of education, workers are unaware of labor laws that protect their rights Work on a “piece-rate basis” Unions are permitted but are frowned upon Thailand Employees (3/4 female) work on a monthly salary basis (Agency Workers) Group-based industrial work: Groups of ten women who produce garment for both local and export markets Work from a private home under a lead member Earn less than agency workers and must cover the costs (time and transportation) and secure orders from the main firm Managers in Thai factories do not allow formation of unions This is strictly prohibited by Thai law Against labor standards by the International Labor Organization

Raising the Minimum Wage How can we make sure minimum wage requirements can be met in developing countries? Set laws to make sure the people are being paid a fair amount for the work they are doing Monthly required (free) building inspections provided by the government Formation of unions in developing countries (with help of the International Labor Organization) More push from ILO and the United Nations (such as inspections etc.)

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