Minimum W Minimum Wage Analysis ge Analysis Labour Market Information Unit (LMIU) Day 2: Tuesday, 1 November 2011 P Presenter: Ms. Jamie Jaggernauth, Labour Market Specialist II, t M J i J th L b M k t S i li t II Labour Market Information Unit (MOLSMED )
Summary � Review of the types of information available for minimum wage setting and analysis i d l i � Review of existing literature and publications related to assessing � Review of existing literature and publications related to assessing the impact of minimum wage systems � Analyzing minimum wage policy 1. Current work-in-progress 2. Current research
Available Statistics � CSO Data : - Inflation rates Inflation rates -Average wages earned - Income levels - Participation rates Participation rates - GDP% per capita and economic growth (sector, industry) � Caribbean Food and Nutrition Institute/PAHO - Cost of basic ingredients for a well-balanced diet � Survey of Living Conditions (2005) y g ( ) - Poverty rates & poverty gaps -Welfare measures - Basic needs index
Examples of Existing Literature � Statistical Aspects of Minimum Wage Determination ( Pember, R.J. & Dupré, M., � Statistical Aspects of Minimum Wage Determination ( Pember R J & Dupré M 1996) � The Impact of Minimum Wage Legislation in Developing Countries (Jones, P p g g p g . 1997) � Minimum Wages and Compliance: The Case of Trinidad and Tobago Getting it Right: Employment Subsidy or Minimum Wage? G tti it Ri ht E l t S b id Mi i W ? (Strobl and Walsh 2002, 2003) � Setting the Minimum Wage (Tito B 2009) � Setting the Minimum Wage (Tito, B. 2009) � The Implementation of Minimum Wages: Challenges and Creative Solutions, ILO (Benassi, C., 2011)
Examples of Current Research Studies � Survey of Living Conditions (2005) � Caribbean Labour Market: Challenges and Policies UN- CEPAL (2006) Caribbean Labour Market: Challenges and Policies UN CEPAL (2006) � ECA Handbook of Wages and Salaries in Trinidad and Tobago (annually) � Central Bank of Trinidad and Tobago Annual Economic Survey � ILO Global Wage Report (2010)
Considerations in Analysis - Country comparisons: (1) Legislation (tripartite, collective bargaining, government) 1 l ll b (2) Number of minimum wages (3) Work period covered by the minimum wage (hourly, daily, weekly, ( ) p y g ( y, y, y, monthly) (4) Scope of setting (national, sectoral, occupational, output, task) - Effectiveness of key objectives of the minimum wage (e.g. poverty & Effectiveness of key objectives of the minimum wage (e g poverty & unemployment reduction) - Impact on social protection (access to benefits) - Occurrences of compliance to legislation and penalties applied for non-compliance - Achieving a decent standard of living (for a worker and their family) g g ( y)
Current Work-in-Progress (1) � Working Paper: “The Impact of Minimum Wages on Trinidad and Tobago” “Th I f Mi i W T i id d d T b ” � Objectives: - Outline changes and developments in the national minimum wage -Assess the social and economic impact of the increases in the national minimum wage minimum wage � Goal: To research identified topics with regard to assessing the impact of minimum ages and to support the pro ision of labour market information minimum wages and to support the provision of labour market information.
WORKING PAPER: WORKING PAPER: Content: The Impact of N i National Minimum l Mi i Wages on Trinidad � Introduction and Country Experiences and Tobago. OBJECTIVE: � Theoretical Framework � Theoretical Framework To outline the developments and � Features of the T&T labour market climate changes in the national minimum national minimum � Literature reviews � Lit t i wage; address features of the T&T � Poverty and compliance labour market climate; analysis of climate; analysis of � Conclusions on the impact of the National Minimum Wage the impact of the - Employers national minimum - Employees wage. - Impact on the labour market climate
Current Work-in-Progress (2) � Sample Survey of Establishments-The Impact of Minimum Wage Legislation on Firms Legislation on Firms � Scope of works (1) Identify key tools that employers use to deal with increases in the minimum wage (2) Identify employers’ views on current Minimum Wage policy (3) Assess the impact that the minimum wage has had on businesses of varying sizes (micro, small, medium and large) � Aim: To identify how firms in varying sizes deal with increases in the national minimum wage.
How do firms deal with wage increases? Sample survey to identify the key areas that are (i) affected by wage changes and (ii) the key tools that employers use to deal with wage changes, and (ii) the key tools that employers use to deal with wage increases: � The number of job applications received � The number of minimum wage earning employees � Th b f i i i l � The number of non-minimum wage earning employees � Non wage benefits � Prices of goods/services � Profitability of the company � Competitiveness of goods/services � Turnover of staff � Labour costs � Compensation packages offered to staff p p g
Current Work-in-Progress (3) � Minimum Wage Awareness Survey � Scope of works (1) Identify employed person’s views on the current Minimum Wage (1) Identify employed person s views on the current Minimum Wage legislation (2) Assess the level of awareness with regard to the current Minimum W Wage legislation l i l i � Aim: To obtain views on employees’ current understanding of minimum p y g wage policy.
Your Understanding of the National Minimum Wage Policy (Survey- Employees) To identify what working people understand about the y g p p current minimum wage legislation: � Level of awareness � How the wage should be structured (and why) - National - Sectoral - Occupational -A combination A combination � How often the minimum wage should be reviewed
Current Work-in-Progress (4) Two suggested models have been identified with regard to minimum wage analysis/setting: g y g (1) A general equilibrium model: - Policy simulation P li i l ti -Analyze how economic variables will be affected by a wage change (2) An Estimation of Differences Model: To investigate different economic outcomes BEFORE and AFTER a wage change - Identify a treatment group (that is affected by policy measures) y g p ( y p y ) - Identify a control group (is not affected by policy measures )
Questions or Comments? Questions or Comments? Ms. Jamie Jaggernauth Labour Market Specialist II (LMIU) Email: jaggernauthj@gov.tt Phone: (868) 625-8478 Mobile: (868) 372-1427 ( )
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