The M inimum W age Crisis

1. The Minimum Wage Crisis By: Mia Foucek

2. The Case Study • The 5W’s: “The Deadliest Garment-Factory Accident in History” • Who- • Workers in garment factory in Saver, Bangladesh • Managers of the factory • Ali Ahmed Khan (head of the Bangladesh Fire Service and Civil Defense) • What- • Collapse of garment factory • Ongoing pattern in developing countries where workers are paid low wages • Where- • Saver, Bangladesh • When- • April 24, 2013 • Why- • Lack of proper building permits/ fire hazards • Building was no made to support heavy machinery

3. Minimum Wage: What is it? • The lowest wage permitted by law • First enacted in New Zealand in 1894 • More than 90% of countries around the world have a minimum wage • Highest– Australia ($15.75 an hour) • Lowest- Mexico ($.65 an hour) • President Roosevelt enacted a minimum wage in 1938 that “an hourly worker had to be paid at least $.25 an hour” • Laws are proposed by states to lobby a higher MW • There are many that lobby against raising MW • Large corporations • Minimum wage workers are hired by highly profitable, large businesses • Higher profit margin for large companies • How much is minimum wage? • In US, minimum wage is $7.25 (except for 5 states)

4. Graph taken from: http://en.wikipedia.org/wiki/Minimum_wage

5. Map of Global Minimum Wage per Hour in U.S Dollars

6. Inflation and Minimum Wage • What is inflation? • A general increase in prices and fall in the purchasing value of money • Is there an increase in the cost of everyday items if minimum wage increases? • NO! • Minimum wage only makes up a small part of the cost of an item (others include manufacturing, transportation, equipment, advertising etc.) • “Think Again: A Wage and Price Survey of Denver Area Fast Food Restaurants” • A survey that included four multi-national fast food chains  each one employing minimum wage workers. • -Concluded that higher prices do not make for higher wages • “Survey results indicated that higher starting salaries are coupled with only higher, identical, and in many cases lower prices than those in stores that paid a lower starting wage.” Universalliving.org • Deregulation: • The act or process of removing or reducing state regulations

7. Living on Minimum Wage • The median income of those in New York is $56,951 • $7.25 = weekly income of about $290 ($15,080 annually) • With a salary such as this, it is almost impossible for a single parent to support their children • In a 1996study, 21% of Americans were supporting extended family • Some Examples: • Groceries- • The average American spends $6,443 on groceries yearly (about $60.00 per trip)  11% of a minimum wage employee’s annual income • Food Stamps  47,635,297 people on food stamps (SNAP) • Rent- • Average person in our country spends about $821 a month

8. Push for Minimum Wage Increase and Barriers • President Obama’s work with wage increase: • Requested federal wage increase to $9 an hour in early 2013 • Political parties coming together for increase • Many in favor of increase to $10.10 by 2015 (“uphill battle”) • Is this still not enough? • Barriers include: • Big businesses lobby the government against raising minimum wage • The economy of a country’s government (GDP) • Lack of education (of both children and adults)

9. Minimum Wage Around the World • The Developing World: • Uneducated people work for low wages to support large families • This leads to an increase in child labor due to lack of education • Mangers in factories do not pay attention to building codes/ fire hazards • Puts all workers at an increased risk of building collapse • For example: • Workers in Bangladesh factory were concerned about their safety • Managers threatened to withhold what little pay they offered if workers did not come to work • Lack of “collective bargaining” • Frequently, workers are aware of their underpayment, however do not know the extent of the “lowballing”

10. China and Thailand • China: • Migrant peasants from countryside immigrate to large cities to find better work • Due to lack of education, workers are unaware of labor laws that protect their rights • Work on a “piece-rate basis” • Unions are permitted but are frowned upon • Thailand • Employees (3/4 female) work on a monthly salary basis (Agency Workers) • Group-based industrial work: • Groups of ten women who produce garment for both local and export markets • Work from a private home under a lead member • Earn less than agency workers and must cover the costs (time and transportation) and secure orders from the main firm • Managers in Thai factories do not allow formation of unions • This is strictly prohibited by Thai law • Against labor standards by the International Labor Organization

11. Raising the Minimum Wage • How can we make sure minimum wage requirements can be met in developing countries? • Set laws to make sure the people are being paid a fair amount for the work they are doing • Monthly required (free) building inspections provided by the government • Formation of unions in developing countries (with help of the International Labor Organization) • More push from ILO and the United Nations (such as inspections etc.)

12. My Blog! • Visit my blog to help support the raising of minimum wage! • raisingminimumwage.wordpress.com