“In the Army, we do more before 9 a.m. than most people do all day.” Today, the U.S. Army’s longstanding slogan could be used for millions of low-wage workers across the globe.
By 7 a.m., most of them have already started their daily struggle just to survive. In Chattanooga, Tennessee, some of those with more desperate needs are up early to beat the crowds of local housekeepers, poultry-plant employees, and discount store cashiers who also need assistance with paying their heating bills or feeding their families, says Steven Greenhouse, the labor and workplace reporter for The New York Times.
“And once Metropolitan Ministries opens at 8 a.m., these workers fill the charity’s 40 chairs, with a bawling infant adding to the commotion,” Greenhouse added. “From pockets and handbags they pull out utility bills or rent statements and hand them over to caseworkers, who often write checks — $80, $110, $150 — to patch over gaps in meeting this month’s expenses or filling the gas tank to get to work.”
However, opinions seem to vary about whether such support is best provided through an overall increase in minimum wage, or some other closely related policy, such as government benefits. And the never-ending minimum wage increase debate is not just about the U.S. workers who are struggling to rise above the poverty threshold. According to a new report by the Organization for Economic Co-operation and Development (OECD), a 40-hour work week keeps millions of low-wage workers across the globe in poverty. The question is how are the “daily grinds” different for global low-wage workers based on their countries’ government assistance, or lack thereof? The following explores the global minimum wage crisis.
Here’s another way to look at it: Somewhere in the U.S., there’s a single father with two teenagers who will work over 50 hours this week at a minimum wage job just make sure that he can feed his family. In the U.K., there’s another single father who also has two teens; but he will only have to work 16 hours this week at a minimum wage job to put food on his table.
In other words, minimum wage employees in the U.S. need to work three times as many hours a week to "climb out of poverty" compared with their counterparts in the U.K. What’s wrong with this picture? Well, there are several issues with it, according to the OECD report which was released earlier this month.
“Although economic output is now well above 2007 levels in a large majority of countries, employment and wage gaps persist, especially amongst disadvantaged groups,” the study said. “In more than one out of three OECD countries, pay in the lower part of the wage spectrum was still lower in 2013 than it had been six years earlier.”
According to The Wall Street Journal, the federal minimum wage in the U.S. is $7.25 an hour, and the minimum wage rate in the U.K. is £6.50, or about $9.92 an hour. The disparities over statutory minimum wages— considered both “controversial and common” worldwide— are much lower in some countries than in others, according to the OECD. For example, in Spain, a minimum wage worker would have to work over 70 hours per week just to stay above the country’s poverty threshold. In the other 25 countries that the OECD examined, minimum wage levels range from 40 percent or lower in the Czech Republic, Mexico, the U.S, Estonia, and Japan, to over 60 percent in Slovenia, France, Chile, and Turkey. And in Colombia, the minimum wage level is more than a whopping 80 percent of the median wage in the formal sector, and is much higher than in any OECD country. So why is there such a big difference in net minimum wages per country?
According to the Cornell University Law School, the purpose of implementing the minimum wage system was to stabilize the economy and protect the workers in the labor force. The goal for most countries, however, was to establish a basic standard of living. But critics argue that the real objective was only to help those who live in poverty, and who lacked enough bargaining power to acquire fair wages on their own.
The problem is that while minimum wages are meant to aid low wage workers, the cost of hiring as well as possible increases for them has continued to stir global debates. As a matter of fact, the total values of hourly minimum wages changed a great deal, from less than $3 per hour after taxes and social contributions in Mexico, Latvia, Chile, Estonia, Hungary, and the Czech Republic to over $9 in Luxembourg and Australia, according to the OECD.
“A large part of those disparities reflects country differences in average wage and productivity levels more broadly,” says the OECD. “But tax burdens play a significant role as well.”
So, how are the “daily grinds” different for global low wage workers based on their countries’ government assistance, or lack thereof? It’s only a matter of location, location, location.