Minimum W Minimum Wage Analysis ge Analysis Labour Market - - PowerPoint PPT Presentation

Minimum W Minimum Wage Analysis ge Analysis

Labour Market Information Unit (LMIU)

Day 2: Tuesday, 1 November 2011 P t M J i J th L b M k t S i li t II Presenter: Ms. Jamie Jaggernauth, Labour Market Specialist II, Labour Market Information Unit (MOLSMED)

Summary

Review of the types of information available for minimum wage

i d l i setting and analysis

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

G tti it Ri ht E l t S b id Mi i W ? Getting it Right: Employment Subsidy or Minimum Wage? (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 l ll b (1) Legislation (tripartite, collective bargaining, government) (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:

“Th I f Mi i W T i id d d T b ” “The Impact of Minimum Wages on Trinidad and Tobago”

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:

The Impact of N i l Mi i

Content:

National Minimum Wages on Trinidad and Tobago. OBJECTIVE:

Introduction and Country Experiences Theoretical Framework

To outline the developments and changes in the national minimum

Theoretical Framework Features of the T&T labour market climate Lit

t i

national minimum wage; address features of the T&T labour market climate; analysis of

Literature reviews Poverty and compliance

climate; analysis of the impact of the national minimum wage.

Conclusions on the impact of the National Minimum Wage

• Employers
• Employees
• 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 Th

b f i i i l

The number of minimum wage earning employees 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 l i l i Wage legislation

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: P li i l ti

• Policy simulation
• Analyze how economic variables will be affected by a wage change

(2) An Estimation of Differences Model: To investigate different economic

• utcomes 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 ( )