Tag Archives: Minimum Wage

The Minimum Wage

A minimum wage is essentially a basic labor standard that sets the lowest hourly, daily, or monthly salary rate that an employee legally receives. Historically, the implementation of this criterion was first executed in New Zealand in 1894 and in the Australian state of Victoria in 1896. In 1912, the state of Massachusetts later instituted this minimum wage policy as well. However, it only applied to both women and minors working in distinctive businesses; these ‘proletariats’ comprised the majority of the working class people who were not administered in a union: “relying solely on public opinion to pressure employers into compliance” (2013, July 28).

In 1918, British Columbia and Manitoba were the first provinces in Canada to establish the minimum wage statute. These inaugurated laws appertained exclusively to female workers because they were considered to be “unorganized and, hence, more vulnerable to exploitation” (). Moreover, the majority of North American unions guaranteed that men received a sufficient salary through collective bargaining – “negotiation of wages and other conditions of employment by an organized body of employees.” Nevertheless, in 1925, the province of British Columbia was the first to launch a regulation concerning the minimum wage of male workers; they adopted the Men’s Minimum Wage Act. During this period, there was an emphasis on the standard or expectation that men were the breadwinners and women were the caregivers: “rates for men were initially set higher than for women” (2013, July 28). Although by 1974, gender-based minimum wages gradually disappeared.

According to Bowal and Franssen, both researchers claim that the cost of living in Canada, even with minimum wages “do not comprise a sturdy living wage for the long term” (Bowal & Franssen, 2012). Through the empirical knowledge of significant others, what these two researchers assert seem factual and/or valid. Moreover, Bowal and Franssen indicate how calibrating the minimum wage in the market too high could potentially result in a decrease of jobs; the government is focused on maintaining a balance between living wages and job opportunities. Today, the principles of a minimum wage assists in protecting non-unionized workers in unskilled jobs and influences the level of compensation of other employees as well.

In Don Watkins’ article “To Protect The Defenseless, We Must Abolish The Minimum Wage,” he shares his subjective opinions and experiences in regard to the how the distribution of means (income) has been substantially unfair. First, he introduces and shares an abstract scenario where the government is concerned about individuals like Watkins and how his gain [money] does not match or outweigh his loss [laptop]: “I’d rather have two hundred bucks than nothing.” This analogy pertains and emphasizes on the enforcement of the minimum wage. Coincidentally, Watkins has a similar outlook to both Bowal and Franssen in that the minimum wage “doesn’t ensure everyone can earn a living.” Evidently, he questions how the system is regulated and doesn’t accept why there are rules that govern how much a person such as one who is skilled, is likely to start off with the minimum: “But it’s not voluntary! You needed the money…” (Brook & Watkins, 2013). In addition, Watkins is convinced that the majority of people acquire work for the sole purpose of improving their resumes; many individuals are trying to climb the ladder. Lastly, Watkins shares his perspective on how an employer should be privileged and/or have the authorization to distinguish the amount a worker should earn – basing on the individuals skills set and experience.

There are three differing schools of thought that have their own interpretations of labour law: Unitarianism, Liberal Pluralism, and Marixm. In correlation to Don Watkins’ article, the school of thought that best fits and/or exemplifies his thoughts and viewpoints would inherently be the Unitarianism Perspective. It is perceptible in Tuckers’ report that in the unitarianism perspective, there are protective legislations including the minimum wage-laws that operate through judicial decision-making. Watkins describes how employers should have the privilege and/or authorization to make recommendations in regard to how much an individual should actually make. The union he believes should not have full control of what a person makes. He affirms that the remuneration should best reflect the skill set and experience of the employee. These statements express the same ideologies of an unitarianism perspective: “It has deprived both workers and employers of freedom of choice and undermined Canada’s economic performance…” (Comack, 2006).

The liberal pluralist approach is a school of thought that contrasts with the unitarian view in association with labor laws. In this particular system, it depicts the labour market by an “imbalance of power between the individual worker and the employer” (Comack, 2006). This perspective opposes the Unitarianism thought because both the employer and employee have the ability to devise an agreement that would benefit and stabilize commercial relations. Whereas in the unitarian ideology, both the workers and employers are concerned with “maximizing their individual liberty and gaining from wealth generated by capitalism” (Comack, 2006). As a counter argument/response to Watkins’ article, liberal pluralists would reply by stating how they can see inequalities without standards such as the minimum wage: “…being responsive to an array of competing interest groups and not the servant of any single body” (Comack, 2006).

In relation to Watkins’ remarks in regards to the minimum wage, in my opinion, the minimum wage standard provides a safeguard to workers and opportunity for everyone. It protects non-unionized workers in unskilled jobs by providing them with a minimum – without the implementation of this act employers could potentially exploit their employees. Those who are uneducated/undereducated or unskilled, the minimum age provides them with a window of opportunity; gives them a sufficient enough of money. Although, we should also bear in mind that because there are so many positions being filled, it prevents jobs for those who are skilled and those who are trying to climb the ladder or better their resume: “…forced the movie theater to pay a wage higher than what my ability justified, it wouldn’t have magically made me more productive – it would have made me unemployable” Overall, Watkins provides convincing remarks that demonstrate why the minimum wage isn’t appropriate but there are also pros concerning this regulation that make it suitable for the economy.

Sources:

Bowal, PeterFranssen, Chris. “Minimum Wages In Canada.” Lawnow 36.3 (2012): 58-60. Canadian Reference Centre. Web. 12 Nov. 2013.

Comack, E. (2006). Locating law: race/class/gender/sexuality connections(2nd Ed.). Halifax, NS: Fernwood Pub.

Minimum Wage Database Introduction. Web. 28 July 2013. <http://srv116.services.gc.ca/dimt-wid/sm-mw/intro.aspx?lang=eng&gt;

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Minimum Wage and Society

Minimum wage positions are typically learning wage positions—they enable workers to gain the skills and knowledge necessary to become more productive on the job. As workers become more productive they command higher pay and move up their career ladder. During the Great Depression, with jobs scarce and many job-seekers, workers frequently found themselves exploited and their wages hitting rock-bottom. In 1938, President Franklin Roosevelt signed into law and “congress instituted the minimum wage… as part of the Fair Labor Standards Act” (Sterk, 2013). The Fair labor Standards Act establishes wage guidelines for businesses with hourly employees. The purpose of the minimum wage during this time was to stabilize the post-depression economy and protect the workers in the labor force. The minimum wage was designed to create a minimum standard of living to protect the health and well-being of employees.  The first minimum wage was set to 25 cents an hour, in 2007 changed to $7.25, reaching its highest in modern times U.S. in Washington State at $9.19. The minimum wage law serves the purpose of establishing a “living wage”–mostly for lower-class families that depend on labor jobs which often pay the least.

Brook and Watkins’ argument against minimum wage explains that “minimum wage doesn’t ensure everyone can earn a living… it doesn’t guarantee that everyone is paid fairly” (Brook & Watkins, 2013). This is a broad statement about minimum wage. Brook and Watkins are simply stating that the minimum wage does not allow one to save/ earn anything, and it denies you the right to decide what pay rate to offer or accept by your employers. Watkins gives a great example of himself when he was seventeen years old as he applied for his first job at the local mall for an entry- level position as a ticket taker at the theatre. He explains how he was offered $5.35, just above the minimum wage at the time, with little to no experience in the work field. The only reason he took the job was because no one else was offering more at the time. If he were offered $5.00 and tried to counter offer to get todays minimum wage of $7.25, he would have never gotten the job. The only reason Watkins accepted the offer of $5.35 was because no one was offering him that much at the time, and with no experience he was eager to start and understood that he was not worth more yet. He knew that it was not about the pay rate. It was about building your resume in order to move up the ladder to earn more than the minimum wage. To conclude Brooke and Watkins’ argument, they state that “it isn’t low pay that’s unfair—it’s preventing people from offering and accepting jobs that are unfair” (Brook & Watkins, 2013). 

There are three major schools of thought that have shaped the study of labour law. The first, Unitarianism—envisions the capitalist labour market as a realm of freedom and an engine of economic growth. The second, Liberal Pluralist—believe that the labour market is characterized by an imbalance of power between the individual worker and the employer. The third, Marxists—argue that capitalism produces crisis and that over time capitalist relations of production (the wage relation) become a restraint on economic development.

In relation to the three schools of thought, Brooke and Watkins’ argument falls under the Unitarianism view. Unitarians see labour laws as the product of special interest groups that have distorted the political and legal process for their own selfish ends. They believe that without labour law workers and employers can share a common set of interests which include maximizing their individual liberty and in gaining from the wealth generated by capitalism. They believe that labour law should provide a legal framework within which workers and employers can freely negotiate the terms of their relationship. In Brooks and Watkins argument that is exactly how they feel. They feel as if the government is sitting there at the interview table with the employer and the job- seeker, but the employer and job- seeker are not the ones negotiating the wage, the government is doing it for them by implementing the minimum wage.

The liberal pluralists claim that capitalist is a powerful engine for producing wealth, however the joint efforts by the workers and employers are not fairly divided and the workers interests and voice are insufficiently recognized and protected. Their counter- argument to the article is that they think for the state to protect vulnerable workers they need to set minimum standards which would produce fairness in the labour market. This kind of delegation of power protects labour law. The article argues that minimum standards does not provide fairness, therefore abolishment of minimum wage is required. The article states that “the problem is that the minimum wage doesn’t ensure everyone can earn a living—it ensures that many of us can’t earn anything. And it doesn’t guarantee that everyone is paid “fairly”—it unfairly denies us the freedom to decide for ourselves what pay to offer or accept” (Brook & Watkins, 2013). It contradicts with the liberal pluralists as they argue for the idea of having labour laws that set out minimum standards, as labour laws do not provide fairness matter of fact it takes freedom away from both the worker and employer to negotiate what pay to accept.

In my opinion, I agree that a person should make a wage according to their skill set and experience. I also believe that minimum wage is necessary as it helps those in poverty. Minimum wage also stops companies from exploiting those with little employment options. I agree with the article as the article states minimum wage takes away freedom from both the worker and employer. However, minimum wage is necessary for the unprivileged group, who do not get to discuss/negotiate their wages with their employers. Minimum wage is required so the employer has a standard of paying his workers. This keeps the employer from abusing the employees’, if the company is losing money the employer cannot just cut the employees’ wages. This was a common issue in the industrial revolution, where the emergence of the labour laws needed to come about and did.

Sources:

Comack, E. (2006). Locating law: race/class/gender/sexuality connections (2nd Ed.). Halifax, NS: Fernwood Pub.

What is Minimum Wage: Its History and Effects on the Economy. (n.d.). The Heritage Foundation. Retrieved November 8, 2013, from http://www.heritage.org/research/testimony/2013/06/what-is-minimum-wage-its-history-and-effects-on-the-economy

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Food for Thought: Class Interests and the Law

We continued our discussion of Critical Legal Studies this week, looking at two studies on class interests and the law – Eric Tucker’s (2006) “Locating Labour Law: The Regulation of Occupational Health and Safety” and Mosher’s (2006) “The Construction of ‘Welfare Fraud’ and the Wielding of the State’s Iron Fist”.

As with last week, I have two food for thought questions for you to dig into.

1. Regarding Labour Law

Tucker (2006) applies unitarian, liberal pluralist, and Marxist theoretical frameworks to make sense of the law (and politics) surrounding the regulation of occupational health and safety. As we discussed in class, occupational health and safety law is one of many legal regimes that apply to labour. Others include legal regulations around collective bargaining, equality of treatment, the length of the work week – and the minimum wage, which is the focus of this food for thought question.

First, please read this article – To Protect The Defenseless, We Must Abolish The Minimum Wage, by Yaron Brook and Don Watkins, from Forbes Magazine.

Then write a food for thought post that does the following:

  1. Briefly explain the origins of the ‘minimum wage’, how this concept has been enshrined in law, and the purpose of the minimum wage.
  2. Briefly summarize Brook and Watkins’ argument against the minimum wage.
  3. Drawing on Tucker (2006) (and other sources if you wish), locate Brook and Watkins’ argument in relation to the three major schools of thought that have shaped the study of labour law. Which school of thought does their argument fit into? Which school of thought would provide a counter-argument?
  4. Conclude by presenting your own response to Brook and Watkins’ position.

2. Regarding the Construction of Welfare Fraud

One of our research teams prepared and delivered a teach-in on the construction of ‘welfare fraud’, drawing on the work of Janet E. Mosher (2006). Their teach-in incorporated a number of statements from people directly involved in and impacted by welfare law, including a single mother on welfare (let’s call her A). This exchange really stood out to me:

[Researcher] Do you think welfare fraud is intentional or accidental?

[A] The system is set up for dependency and fear. When you’re tying to feed your kids and pay rent and utilities and whatnot on the minimal funds they give you , any excess cash or income you make you don’t want to report because it comes off your check and then your kids can’t eat next month. I think that the government has given the welfare agencies the ability and encouraged them to make ‘monsters’ of the people relying on welfare benefits. They are forcing parents to do illegal things, like not report income, just to survive and try and give their kids a better life than what they have. You can’t save any money on welfare because welfare just takes it out of your check”.

Mosher’s analysis of the social construction of welfare fraud is informed by Wacquant’s (2001) observation that “The ‘invisible hand’ of the casualised labour market finds its institutional complement and counterpart in the ‘iron fist’ of the state which is being redeployed so as to check the disorders generated by the diffusion of social insecurity”.

Food for thought:

Respond to A’s remarks. Does this interpretation of the nature and function of the welfare system reflect Mosher’s (2006) analysis?  [You could also choose to relate it to Wacquant’s analysis]. If A’s interpretation of the system is correct, what can we (drawing on Critical Legal Studies) say about the role of welfare law in neoliberal societies?

Posts should be submitted before our next class. 

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