By Rodrigo Zeidan, Fundação Dom Cabral
The debate over the minimum wage in the US is an interesting one. Wages have been falling in real terms for the last 30 years but there is strong resistance to any kind of increase in the federal minimum wage. The social contract in the US calls for a flexible labour market, and market efficiency trumps equality considerations. Not even Nobel Laureates can influence the debate. But there are lessons to be learned from the strong real growth minimum wage policies in two of the Bric countries, Brazil and China. Read more
Will South Koreans earn higher wages than the French, Germans, Americans and Brits in twenty years or so? Perhaps, according to a study published on Thursday by professional services firm PwC. Read more
With crucial wage negotiations under way amid persistent strikes and declining commodity prices, South African mining has become symbolic of everything going wrong in the country. So would the latest mining production figures give any reason to hope?
Hardly. While a 0.7 per cent year-on-year contraction in May was better than the 4 per cent drop many economists had forecast, the outlook for the rest of the year is still on the depressing side. Read more
By Saurabh Mukherjea and Ritika Mankar-Mukherjee of Ambit Capital
Indian newspapers paint a gloomy picture of the state of the nation. They point to the 5 percentage-point drop over the last five years in the country’s once-feted economic growth rate. They bemoan the depressed stock market which has delivered negative returns over the last five years. And they point to the stagnant incomes of their readers who are, generally, white-collar workers and businessmen.
What the newspapers don’t do is discuss the remarkable surge over the last five years in the fortunes of less privileged workers – wages for blue-collar workers have been growing at a staggering 15 per cent or more annually. Read more
It is the second day of a bandh, a general strike in India triggered by rising prices and economic reforms that are seen as “anti-labour”.
And in the middle of all this, new data has been released predicting that wage growth in 2013 will be the slowest India has seen in a decade – excluding 2009, the height of the sub-prime crisis. Read more
We are all China bulls now.
So the stock markets appeared to be saying for the past few months. The Chinese government released a slew of positive data in January — ranging from strong exports in December to faster GDP growth in the fourth quarter to the news on the weekend that industrial profits were up 17 per cent.
But Diana Choyleva, a persistent bear on China at Lombard Street Research, wants none of it and is now trying to take away the punch ladle just as the party was getting started. Read more
Workers in emerging markets hoping for a pay rise this year might be in for disappointment. A new survey from Grant Thornton shows only 11 per cent of businesses operating in the BRICs are expecting to offer their staff above-inflation pay rises in 2013 – down from 21 per cent this time last year. Read more
A 2012 protest over wages
The battle over factory pay in Indonesia is intensifying, with vocal local trade unions joining hands with a US non-governmental organisation to pressure Nike suppliers into paying minimum wages.
A yawning gap is opening up between employers, who argue that hefty minimum wage increases are destroying their profitability, and trade unions, who argue that wages must rise further and employment conditions be improved. Read more
The Thai government, known for its string of populist policies including rice and fuel subsidies, is delighting working class voters (those with a job, anyway) with the introduction of a national minimum wage, which kicked in on January 1.
The policy has already triggered fierce criticism in business circles and reports of job losses, particularly in rural provinces. Yet, some experts argue that despite short term pain, a hefty national minimum wage increase will raise both living standards and productivity. Read more
While average wages in emerging markets have increased in many countries, especially China, they are still well behind those in developed nations.
But not at the top. Over the last decade, senior salaries in EMs have caught up with those in the west, and in many cases surpassed them, according to a report by management consultancy Hay Group. Read more
By Majid Jafar, CEO of Crescent Petroleum.
The threat to stability in the Arab world posed by youth unemployment is such that governments old and new must urgently address the worsening economic environment. If a solution is not found soon, the whole region risks instability or even secondary revolutions. Read more
Idris Jala, the Malaysian minister in charge of economic development, tells the FT’s Sarah Mishkin how his department is seeking to lift Malaysia out of the so called middle income trap through economic and labour market reform
Happy labour day, labourers in Malaysia. On Tuesday the country got its first ever minimum wage, part of prime minister Najib Razak’s ambitious plans to make the country work smarter, not just harder, and double per capita income by 2020. Read more
Alexander Lukashenko wants average salaries in Belarus to go up – and what the authoritarian leader wants, he usually gets, which is likely to mean more trouble for the ex-Soviet republic’s battered economy.
“What is the average salary of $500? This is quite a low level – we should get higher. And this is a task for everybody,” Lukashenko told local officials this week, according to the local press. Read more
Hon Hai has announced it is raising the base salary of its 1m-plus workers by between 16 to 25 per cent, the first major pay hike since it doubled pay for operators and line managers in 2010 following a tragic series of suicides at its plants.
With Hon Hai, the Foxconn parent, and other Apple suppliers’ plants currently undergoing an audit by the Fair Labour Association, that’s good news, isn’t it? Not so for investors, according to HSBC head of Taiwan research Jenny Lai. Read more
As business confidence in many western countries is once again being hammered, staying in work is the first thing on many managers’ and professionals’ minds.
But not so in Asia. As the regional economy remains resilient, employers will continue to hire, and the only question for executives and other white-collar staff , especially in China, is how much their salaries will rise, says Hays, the recruitment agency. Read more
It’s a new year, but for Foxconn, the old problems seem to be coming back all over again. It turns out that early last week, at least 150 workers at the Taiwanese group’s factory in the Central Chinese city of Wuhan threatened collective suicide in a pay dispute gone wrong.
After a Chinese internet post with pictures was picked up by Taiwanese media and then by Western blogs this week, Foxconn hurried to say late Wednesday that the dispute had been settled “peacefully” the same day, and Microsoft, one of the companies whose products are manufactured at the Wuhan plant, said it was looking into working conditions there. Read more
By Ifty Islam of Asian Tiger Capital Partners
The macro uncertainties for 2012 remain daunting. The prospects for the next phase of the eurozone crisis still looms large, while an ongoing Chinese real estate crash (and a prospective banking crisis) and the sharp decline in the Indian Rupee suggest that Asia EM may not be the counterbalance growth optimists would hope for. US consumer confidence has been surprisingly resilient but fiscal reality and housing gloom is likely to re-assert itself.
So the balance of risks remains for the global economy to slow significantly more than consensus. Against this backdrop, investors may wish to consider increasing exposure in the less correlated frontier markets such as Bangladesh. Read more
The Thai government is pressing ahead with a large minimum wage increase despite appeals from companies concerned about the financial impact of the worst floods in 50 years.
Wages in Bangkok and six other relatively prosperous provinces will be increased by around 40 percent to 300 baht (£6.20) a day from April next year, the government announced after a meeting with employers and trade union representatives on Monday. The wage increase was a key campaign pledge of Yingluck Shinawatra, the recently elected prime minister. Read more
Wages are the key to competitiveness – aren’t they? Well, yes and no. They are an important factor in costs, and can dictate where stuff is made. But they aren’t the whole story.
Two recent stories about wages – a deal in South Africa to reduce the minimum wage, and strikes in Brazil – highlight the same issue: China. This week’s chart (after the break) looks at minimum wages in different countries – and the numbers are surprising. Read more