Thursday, July 12, 2007

Govt cannot meet minimum wage demand.

Here is the latest report on the minimum wage issue in Malaysiakini.

So thats it, no repite for low income workers. Your contribution to the nation worth nothing. You are just like 'slaves' in the old days when slavery is legal and rampant.
Profit and survival of your 'master', the factory or business owners is more paramount.

I wonder what if all workers leave your jobs, would your employer businesses thrive?

In my previous article about this, I wrote about Negative Income Tax.
If Govt does not want workers get minimum wage, and the minimum liveable wage is at RM900, Then Govt should distribute money from Treasury to those workers who earn below minimum wage, to make up for the shortfall.

Let say that a worker get RM500 a month, which is RM400 below livable wage of RM900. Then Govt should give that worker RM400 to make up for the shortfall. And for those worker who earn more than RM900, Govt dont pay anything, because he earns enough for a living. This would be a fair distribution of national income, and works the same way as legislating minimum wage law. The only difference is where the money come from.
By legislating minimum wage law, the income distribution starts from the workplace itself, companies make less profit, hence pay less taxes, less income for the Govt.
Whereas, if we use the Negative Income Tax method, companies pay less on wages, giving them more profit, paid more taxes to the Govt, hence more income to Govt, which would be distributed back to those who need most - low income workers.

Now, let me present another method.
Do nothing.
Let the difference between rich and poor widens. Let the poor eat grass for a while, that will toughen them up. As the say, when the going get tough... the tough get going. What they (the poor) cannot get, they will take.
Crime would be rampant. Robberies, corruption.
Yes its another form of income distribution, and some countries have been through this....Colombia, and many other in Latin America, cant remember the names, my Geography is a bit rusty. I donot know if I can lump Indonesia and Phillippines into this category, but kidnappings and corruption are well known fact in those countries.

Think about it.

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