A National Minimum Wage in the Context of the South African...
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?
Arden Finn, UCT NMW in SA February 02, 2016 2 / 33
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
Arden Finn, UCT NMW in SA February 02, 2016 3 / 33
Datasets used in this analysis
PALMS (2003-2012) for trends
NIDS Wave 3 (2012) for household welfare
LMDSA (2014) for current labour market analysis
Arden Finn, UCT NMW in SA February 02, 2016 4 / 33
New section
The role of wages in household income, inequality and poverty
Arden Finn, UCT NMW in SA February 02, 2016 5 / 33
The role of wages in household income (p. 4)
Arden Finn, UCT NMW in SA February 02, 2016 6 / 33
The role of wages in household poverty (p. 7)
Arden Finn, UCT NMW in SA February 02, 2016 7 / 33
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.
Arden Finn, UCT NMW in SA February 02, 2016 8 / 33
New section
The current labour market
Arden Finn, UCT NMW in SA February 02, 2016 9 / 33
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
Arden Finn, UCT NMW in SA February 02, 2016 10 / 33
Current composition (p. 35)
Arden Finn, UCT NMW in SA February 02, 2016 11 / 33
Means and medians under different assumptions (p. 39)
Arden Finn, UCT NMW in SA February 02, 2016 12 / 33
Summary statistics (p. 41)
Arden Finn, UCT NMW in SA February 02, 2016 13 / 33
Summary statistics (p. 42)
Arden Finn, UCT NMW in SA February 02, 2016 14 / 33
New section
Creating a ‘working-poor’ line
Arden Finn, UCT NMW in SA February 02, 2016 15 / 33
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
Arden Finn, UCT NMW in SA February 02, 2016 16 / 33
‘Working poor’ lines (p. 46)
Arden Finn, UCT NMW in SA February 02, 2016 17 / 33
Where are poor workers? (p. 47)
Arden Finn, UCT NMW in SA February 02, 2016 18 / 33
Where are poor workers? (p. 48)
Arden Finn, UCT NMW in SA February 02, 2016 19 / 33
Where are poor workers? (p. 49)
Arden Finn, UCT NMW in SA February 02, 2016 20 / 33
New section
Where will a NMW bind?
Arden Finn, UCT NMW in SA February 02, 2016 21 / 33
Where will a NMW bind? (p. 51)
Arden Finn, UCT NMW in SA February 02, 2016 22 / 33
Where will a NMW bind? (p. 51)
Arden Finn, UCT NMW in SA February 02, 2016 23 / 33
Where will a NMW bind? (p. 51)
Arden Finn, UCT NMW in SA February 02, 2016 24 / 33
Where will a NMW bind? (p. 51)
Arden Finn, UCT NMW in SA February 02, 2016 25 / 33
Where will a NMW bind? (p. 51)
Arden Finn, UCT NMW in SA February 02, 2016 26 / 33
Where will a NMW bind (under-reporting)?
Arden Finn, UCT NMW in SA February 02, 2016 27 / 33
Where will a NMW bind, by sector? (p. 52)
Arden Finn, UCT NMW in SA February 02, 2016 28 / 33
Where will a NMW bind, by formal/informal? (p. 54)
Arden Finn, UCT NMW in SA February 02, 2016 29 / 33
Where will a NMW bind, by age groups? (p. 56)
Arden Finn, UCT NMW in SA February 02, 2016 30 / 33
Where will a NMW bind, by finer SIC codes? (p. 69)
Arden Finn, UCT NMW in SA February 02, 2016 31 / 33
Where will a NMW bind, by finer manu. sector? (p. 69)
Arden Finn, UCT NMW in SA February 02, 2016 32 / 33
End
Thank you
Arden Finn, UCT NMW in SA February 02, 2016 33 / 33