Preview

Minimum Wage

Powerful Essays
Open Document
Open Document
1297 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Minimum Wage
Comprehensive Analysis on Minimum Wage in Indonesia

“Comprehensive Negative Impacts Analysis of Minimum Wage for DKI Jakarta”

[pic]

Andhika Putra Sudarman
1106055822

Fakultas Hukum Universitas Indonesia
Depok

“If the Minimum Wage of DKI Jakarta is set to Rp10.000.000,00, will everybody prosper?”

Laborers in DKI Jakarta demonstrating for an increase of minimum wage[[1]][[2]] is not a rare thing to see. The reason is because they can no longer meet their needs with their current wage. However, minimum wage has been raised for many times since it was first introduced in the 1970s. So, what exactly is going wrong in our beloved country, or the problem is within the minimum wage itself?

In this essay, the vision of why minimum wage should not be put into implementation in DKI Jakarta shall be given, for not only minimum wage law do not bring welfare to the people, instead it will cause unemployment and limit the workers’ productivity. In other words, the problem lies in the minimum wage itself.

Minimum Wage Does Not Solve Poverty
If the purpose of the minimum wage is a protection to the workers so that they can prosper, it is precisely with the minimum wage system that the workers will never prosper. An increase of minimum wage equals to an overall-income increase of all workers. This means that the prices of goods and/ or services in the market are subjected to increase because as people hold more money, they demand more. This escalation of demand will eventually lead to the escalation of the price[[3]]. The prices of goods and/ or services may also rise because of cost-push inflation[[4]], whereas the businesses will try to compensate the revenue by raising the prices of goods and/ or services, hoping to receive the same revenue along with the rising wage[[5]].

These ways, the previous additional wage will mean nothing as the inflation follows. This then encourages the formation of a cycle that will never end – the workers demand an increased wage in order

You May Also Find These Documents Helpful

  • Good Essays

    minimum wage essay

    • 512 Words
    • 3 Pages

    Minimum wage has been a very controversial topic. Nowadays people just can’t survive on minimum wage. Prices are rising but yet the pay is still the same. How do they expect us to survive on eight dollars and twenty five cents?…

    • 512 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Raising the minimum wage and getting paid more sounds like a great idea. Who wouldn’t want to have more money? While it may be cool to raise the minimum wage and get paid more money, it has it’s downsides. Minimum wage is the least amount of money an employer can give to their workers. We are talking about minimum wage because it is very important in our economy. People have been trying to raise the minimum wage. While some may argue that raising the minimum wage would help those who don’t have enough money to buy resources, the US should not raise the minimum wage because it will result in people losing their jobs and things getting more expensive.…

    • 455 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Minimum Wage Effects

    • 1025 Words
    • 5 Pages

    In conclusion, minimum wage legislation has both negative and positive consequences on the economy. The demand-supply framework shows that minimum wage legislation results in unemployment. However, it should be appreciated that raising minimum wage increases aggregate demand hence boosting economic activities. In case of a monopsony, it will result in increase in labor demand. In addition, firm productivity may increase due to employee motivation and…

    • 1025 Words
    • 5 Pages
    Good Essays
  • Good Essays

    In his article “ Raising minimum wage won’t lower poverty”( Saltsman, 2011) discussed that raising the minimum wage may contribute to reducing the incidence of poverty at the same time may increase the incidence of poverty. Although raising the minimum wage contribute to the economic development and create many jobs and thus reduce unemployment. However, a lot of studies have shown that all of these pros of the lifting of the minimum wage will turn into cons by reducing the employment rate. After that , he mentioned the need to find regulations to imposing monthly salaries and hiring a lot of people instead of the consequences associated with the minimum wage.…

    • 245 Words
    • 1 Page
    Good Essays
  • Good Essays

    A minimum wage is the lowest remuneration that employers may legally pay to workers. It is the price floor below which the workers may not work. Minimum wage is set by the federal government or the state in any country. It differs from country to country and states to states. Increase in the minimum wage benefits the workers and their family. It helps to increase the demand of the goods and services which will help in the supply. There are conditions under which raising the minimum wage will increase the demand of the goods and supplies and help in economic efficiency. If the minimum wage is low then there will be buyer of low wage in the market which won’t increase the demand of the goods. The increase in demand will help to create more jobs and more sales. So positive change in minimum wage is necessary.…

    • 535 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Wage problem is an important topic that is related to sociology and economics and it is also an important part that ordinary people are close interested. As the currencies performance of the value of labor, wage is the main source of the workers’ life, maintaining the survival and development of every worker and their family members. However, it is also the material basis for social stability. The minimum wage in the form of a national law to impose an important guarantee for low-income groups of workers, most of the world market economy countries have established this system. There are some theoretical models and theoretical research achievements of several minimum wage systems. Also analyzed from both positive and negative economic effects…

    • 1537 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    Minimum Wage

    • 1906 Words
    • 8 Pages

    Minimum wage is defined as the lowest possible income that an employer can legally pay an employee. This ensures that all people are fairly paid and not defrauded by companies or businesses. Minimum wage is now a staple in 90 percent of countries in the world (Minimum). Even with these minimums, a person’s lifestyle is hard to maintain. Sustainability, in my opinion, is the ability to keep or maintain a certain amount of physical or mental property. In this light of sustainability, minimum wage is not a sustainable amount of money in which to survive with a basic quality of life. There are many supporters and objectors to the minimum wage debate. Supporters say that increasing minimum wage increases the workers earning power and wages. Objectors say that increasing minimum wage only leads to unemployment due to small companies’ inability to pay workers. Also the increased inflation rate of goods only hurts the economy, which leads to many jobs being lost, mainly the jobs held by minimum wage patrons. Although this is a heated debate there is one thing to which both sides agree; something needs to be implemented so that workers are not exploited by businesses. Economists are exploring the viability of minimum wage, the standard minimum wage payments, and if there is anything we can do to keep the world on an equal playing field.…

    • 1906 Words
    • 8 Pages
    Good Essays
  • Good Essays

    The continuing demand of more money for less work has forced the United States to raise the minimum wage innumerable times in the last century, Which results in higher prices for the rest of us. Another raise in the minimum wage would, as all the others before it, raise prices for consumers, which would again result in another demand for a raise in the minimum wage. it’s a viscous cycle that must be stopped before it loses control. Not only does a raise in minimum wage result in a raise in the cost of living, it also causes the dismissal of hardworking people who are happy with their current income. When the firing axe starts to fall, seniority often determines who goes and who stays. The more a single employee costs a business an hour, the fewer employees the business can afford to employee an hour.…

    • 760 Words
    • 4 Pages
    Good Essays
  • Powerful Essays

    Minimum Wage

    • 1943 Words
    • 8 Pages

    Minimum wage has been a continuing matter since its first establishment, and it is something everyone faces. Though, the recurring problem being brought up again and again is the issue of being underpaid, and is the set minimum wage fair? And will raising minimum wage be more beneficial or harmful in the long run? Through its history can society better understand and find a solution to this problem. Minimum wage was not instituted in the United States until the 1920s, and the idea of wages being determined by the hour was introduced in the 1930s. The Fair Labor Standards Act was born and passed through the Supreme Court in 1938, as well as the Wage and Hour Division. Raising minimum wage has promoted fairness in the work area, and has helped workers earn money for themselves and their families. Through these fairness and equality had been brought about, though its problems have risen throughout after its establishment, questioning its fairness and equality. With the unemployment rate so high, this matter needs to be looked into, as it could potentially save jobs.…

    • 1943 Words
    • 8 Pages
    Powerful Essays
  • Good Essays

    The earnings of minimum wage workers are crucial to their family’s wellbeing. Raising the minimum wage would help uphold some working families exceed the poverty line by mostly solving the primary problem with current minimum wage rate: it has failed to keep pace with inflation and the rising cost of living. In addition to providing a much-needed boost to low-wage families, increasing the minimum wage would also have other positive economic effects.…

    • 396 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Minimum Wage Essay

    • 1068 Words
    • 5 Pages

    The demand to raise New Zealand’s minimum wage has decline. We live in a society where government has to make balance between employers and employees. Workers want better paying job and at the same time employers want to control labour cost. Therefor government put the floor of minimum wage “a minimum wage is the lowest wage that each employee can legally get from an employer” (exclusive papers). This is the lowest amount that a worker can sell his/her labour and that is what we need for better economy right now especially not a price ceiling which is "a set below the market price, then a "shortage" is created; the quantity demanded will exceed the quantity supplied"(week 3w/s).However increasing the minimum wage dose have many consequences on society, people will have better standard of living and encouraging more people to work but at the same time it will affect the employers in increase on their production costs. Therefore the employers has to cut down the staff and it could be hard to find a job for unskilled workers, youth or adults could also face problems in finding the job, which may result as increase in unemployment.…

    • 1068 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Sample Minimum wage Essay

    • 881 Words
    • 4 Pages

    In spite of a temporary benefit to one group of workers, an increase in the minimum wage is harmful to several other groups. Employers, some low wage employees, and society as a whole are hurt by the increase. Employers are harmed by an increase in the minimum wage. The increase causes a company’s cost of operation to go up. Higher input prices decrease a company’s profits. Because of the higher cost of labor, an employer cannot employ as many workers. This causes a decrease in the company’s productivity, which also decreases their profits. Small businesses especially have a difficult time accommodating increases in minimum wage because they do not have as large of a budget to work with.…

    • 881 Words
    • 4 Pages
    Powerful Essays
  • Satisfactory Essays

    The purpose of minimum wage legislation is to make sure employers will not under pay its workers and ensure that workers are paid fairly I think it is good for the employees, however it can be a detriment as employers cannot afford to pay the minimum wage so they must hire less employees in order to satisfy the minimum wage requirement. Especially in today’s economy workers would accept jobs at rates below min wage, however employers cannot. The government sets these price floors and it can have two effects minimum-wage laws can create unemployment among unskilled workers, but minimum wages does raise the income of poor workers who remain employed in regulated markets. The price elasticity of demand measures the sensitivity of the quantity demanded to price. The price elasticity of demand is the percentage change in quantity demanded brought by a 1 percent change in price. The value of price elasticity of demand for a normal good must always be negative, reflecting the fact that demand curves slope downward because of the inverse relationship of price and quantity. The price elasticity of supply measures the sensitivity of quantity supplied to price. The price elasticity of supply tells us the percentage change in quantity supplied for each percent change in price. The value of price elasticity of supply for a normal good must always be positive, reflecting the fact that supply curves slope upward because of the positive relationship of price and…

    • 290 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    For this assignment I chose Economics as the field that I wanted to learn about because it has a great impact on my life. It also is something that I want to learn more about. The article that I read is called: The economics of minimum wage legislation. I really enjoyed this article because it talked about how we are always looking at what we should do to help the job market and the suppliers as well. This article talks about two things that can happen when there is a minimum wage that is enforced. The first is that there are people that work in a job that may be under qualified and if the employer is forced to pay him above what he is worth then he would lose his job. The other outcome is that if the minimum wage is razed then the employee…

    • 265 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    In late 2012, minimum worker salary for 2013 has become an important and concerning issue. This was caused by drastic increase set by the local governments across Indonesia. In Jakarta, for instance, wages have increased by 44% compared to last year. The Bogor government also has implemented strong increases, where the minimum wage climbs up 70% from 2012. Although the rise is intended to improve welfare of workers and enhance their living standards, but the huge percentage will bring negative impacts for the Indonesian economy, particularly decreasing foreign investment, slowing down economic development and creating huge number of unemployment.…

    • 857 Words
    • 4 Pages
    Satisfactory Essays

Related Topics