A National Minimum Wage in the Context of the South African...
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A National Minimum Wage in the Context of the South African Labour Market Arden Finn, UCT National Minimum Wage Research Initiative WITS Symposium February 02, 2016
Transcript of A National Minimum Wage in the Context of the South African...
A National Minimum Wage in the Context of the SouthAfrican Labour Market
Arden Finn, UCT
National Minimum Wage Research InitiativeWITS Symposium
February 02, 2016
Outline
Motivation
The role of wages in household income, poverty and inequality
Current state of the labour market
Focus on the ‘working poor’
Where would possible national minimum wages bind?
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Motivation
Society characterised by a very high levels of inequality, poverty
Large proportion of workers earning ‘low wages’ and can be thoughtof as ‘working poor’
Which groups would be affected by a given NMW? What effectsmight this have on output, demand, poverty and inequality (anotherpart of this research initiative)?
Understanding who would be affected (and how) by a NMW isessential in the developing debate
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Datasets used in this analysis
PALMS (2003-2012) for trends
NIDS Wave 3 (2012) for household welfare
LMDSA (2014) for current labour market analysis
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New section
The role of wages in household income, inequality and poverty
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The role of wages in household income (p. 4)
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The role of wages in household poverty (p. 7)
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New section
Stylised facts about trends in the labour market
Shares of agriculture, mining and manufacturing down.
Shares of trade, finance and services up.
Relatively strong growth in the mean for most sectors. Growth in themedian more sluggish.
Downward trend in aggregate hours worked per week, particularlysince 2008.
Share of ‘within sector’ inequality up from 60% to 80% compared to‘between sector’ inequality from 2003 to 2012.
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New section
The current labour market
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Current labour market conditions
Set scene for the ‘where will it bind’ section
Using merged QLFSs from 2014 (LMDSA)
Composition is all workers
Everything else is restricted to those who work at least 35 hours aweek
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Current composition (p. 35)
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Means and medians under different assumptions (p. 39)
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Summary statistics (p. 41)
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Summary statistics (p. 42)
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New section
Creating a ‘working-poor’ line
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Creating a ‘working-poor’ line
Want to have some threshold below which we consider wage earnersto be ‘working poor’
Different international approaches
Central question: What wage level would it take, on average, to bringa household living below the poverty line which has at least oneworker, up to the poverty line?
Take total number of dependents into accountWhich poverty line to choose?Take depth of poverty into account
Get the line from NIDS and take it to the QLFSs
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‘Working poor’ lines (p. 46)
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Where are poor workers? (p. 47)
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Where are poor workers? (p. 48)
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Where are poor workers? (p. 49)
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New section
Where will a NMW bind?
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Where will a NMW bind? (p. 51)
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Where will a NMW bind? (p. 51)
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Where will a NMW bind? (p. 51)
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Where will a NMW bind? (p. 51)
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Where will a NMW bind? (p. 51)
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Where will a NMW bind (under-reporting)?
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Where will a NMW bind, by sector? (p. 52)
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Where will a NMW bind, by formal/informal? (p. 54)
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Where will a NMW bind, by age groups? (p. 56)
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Where will a NMW bind, by finer SIC codes? (p. 69)
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Where will a NMW bind, by finer manu. sector? (p. 69)
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End
Thank you
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