DETERMINANTS OF SCHOOL ENROLMENT IN INDONESIA: THE ROLE OF MINIMUM WAGE

This paper investigates the role of minimum wages in determining school enrolment (educational investment) in Indonesia using the National Socioeconomic Survey (Susenas). It finds that minimum wage legislation has a negative and significant substitution effect on educational investment. Individuals are more likely to drop out of senior secondary school as a result of a minimum wage legislation. Even though the response among low-income households is positive, this result may be generated by a fall in the probability of obtaining low-skilled employment, which offset the substitution effect.

The Pass-Through of Minimum Wages into US Retail Prices: Evidence from Supermarket Scanner Data

This paper estimates the pass-through of minimum wage increases into the prices of US grocery and drug stores. We use high-frequency scanner data and leverage a large number of state-level increases in minimum wages between 2001 and 2012. We find that a 10% minimum wage hike translates into a 0.36% increase in the prices of grocery products. This magnitude is consistent with a full pass-through of cost increases into consumer prices. We show that price adjustments occur mostly in the three months following the passage of minimum wage legislation rather than after implementation, suggesting that pricing of groceries is forward-looking.

Defining Equality

Chapter 7 describes how class intersected with the Nineteenth Amendment, in the context of the United State Supreme Court’s decision in Adkins v. Children’s Hospital and the divisions over a proposed Equal Rights Amendment. It explores the NWP’s negotiations with social feminists and legal progressives, in the three years after ratification. That negotiation was focused on modifying the language of the proposed Equal Rights Amendment (ERA), to ensure that courts would not use it to strike down protective labor legislation for women. These efforts came to naught, and the “neutrality feminists” within the NWP arranged for the ERA to be introduced into Congress in 1923. Chapter 7 argues that Adkins was the high watermark for a potentially robust or “thick” interpretation of the Nineteenth Amendment. Social feminists and legal progressives feared that the ERA would be used in the same way Justice Sutherland invoked the Nineteenth Amendment in Adkins, to justify invalidating minimum wage legislation for women. One consequence of this battle over the ERA is that it has still not been ratified, one hundred years later. But, another consequence was to create a vacuum around the Nineteenth Amendment, contributing to the thin constitutional conception that emerged following ratification.

The minimum wage remains significantly high in Morocco

Morocco passed minimum wage legislation as early as 1936 with the aim of defining minimum pay levels for employees in urban and rural areas. Decisions to increase the minimum wage (guaranteed minimum wage) and SMAG (minimum guaranteed agricultural wage), which serve as minimum wages in the non-agricultural and agricultural sectors, respectively, do not follow a pre-established timetable but arise from exchanges between different stakeholders within the framework of social dialogue. Since the early 2000s, around ten increases have been implemented on the minimum wage, however, no scientific publication analyzing their effects on the Moroccan economy has been carried out. Thus, the objective of the study published by BAM is to examine the impact of revaluations of the minimum wage on a set of macroeconomic variables of interest to the decision-maker. The study reviews the criteria for setting the minimum wage and its macroeconomic effects. Then on the stylized facts that characterize the minimum wage in Morocco, particularly in relation to wage distribution, employment, informality and youth unemployment. The study also explores the links between minimum wage, overall salary and employment. Finally, a simulation of the effects of the increase in the minimum wage on the Moroccan economy is carried out based on a more structural model derived from the IMF's FSGM model.

Wages, Salary, and Remuneration—Towards a Social Wage

This chapter traces the development of minimum wage legislation through the early to mid-twentieth century. It demonstrates the significance of the concept of ‘remuneration’ in shaping the legal environment in which workers’ right to payment was coming to be conceived. The first section begins with a discussion of this concept, tracing it from its origins in the concept of the salary. The second section builds on this analysis to explore the role of these concepts—the wage, the salary, and remuneration—in experiments in wage regulation. The third section explores the link between these different concepts and the emerging relational model of the contract of employment. The fourth section shows how these changes influenced the way in which minimum wage legislation came to be conceived in the mid-twentieth century, particularly in the context of the wages councils system of the 1940s. The fifth section then explores the broader implications of these changes, returning to the example of dock work and the various ‘decasualization’ policies of the era.

The Emergence of the Wage

The first section of this chapter begins the genealogy of the wage with an analysis of the emergence of wage labour in the years following the Norman conquest. The second section explores the development of the category of the wage through the statute of labourers and the early common law as it applied to ‘service’. The third section discusses the wage in the context of the poor law and the system of settlement of the seventeenth century. The fourth section in the chapter explores how changes in the eighteenth and nineteenth centuries, and the emergence of a labour market, affected the legal conception of the wage, an analysis that is continued in the fifth section which explores some of the social problems that emerge in this context, and the early forms of labour market regulation that developed in ‘response’. The sixth section analyses early legal responses to the problem of ‘sweated labour’, the development of the first minimum wage legislation, and the Trade Board Act, before discussing early responses to the problem of casualism, particularly as it manifested in the context of the docks.

Solo Self-Employment and Alternative Work Arrangements: A Cross-Country Perspective on the Changing Composition of Jobs

The nature of self-employment is changing in most OECD countries. Solo self-employment is increasing relative to self-employment with dependent employees, often being associated with the development of gig economy work and alternative work arrangements. We still know little about this changing composition of jobs. Drawing on ad-hoc surveys run in the UK, US, and Italy, we document that solo self-employment is substantively different from self-employment with employees, being an intermediate status between employment and unemployment, and for some, becoming a new frontier of underemployment. Its spread originates a strong demand for social insurance which rarely meets an adequate supply given the informational asymmetries of these jobs. Enforcing minimum wage legislation on these jobs and reconsidering the preferential tax treatment offered to self-employment could discourage abuse of these positions to hide de facto dependent employment jobs. Improved measures of labor slack should be developed to acknowledge that, over and above unemployment, some of the solo self-employment and alternative work arrangements present in today’s labor market are placing downward pressure on wages.

Labour market statistics

The chapter begins by identifying the theoretical roots of labour market concepts, notably the Phillips Curve relating unemployment and inflation. It then presents the definitions of “employment” and “unemployment” developed by the International Labour Organisation. These are measured by the quarterly Labour Force Survey, which provides not just simple counts but also flows between these categories, here presented graphically. One problem is that localised unemployment data use different definitions from the national headline rate, but a larger problem is that in all measures individuals must be counted as either employed or unemployed, when increasing numbers of workers work fewer or more hours than they wish, sometimes on variable hours contracts or as insecure sub-contractors in the “gig economy”. These new forms of work, generally disadvantaged, make gathering reliable data harder, and the chapter ends by discussing earnings data, and measuring the impact of minimum wage legislation.