Minimum wages: possible effects on the distribution of income

Since the 1980s, there has been increased interest among unions and two opposition parties in the possibility of introducing a national minimum wage (NMW). The central argument for a minimum wage is a social justice one: a minimum wage is deemed necessary to prevent some employers exploiting workers with little bargaining power by paying them less than the value of the goods and services they produce. The aim of this paper is to establish what sort of people might be affected by a minimum wage, how this might have changed over time and how far a minimum wage can be used as a tool to redistribute income from the rich to the poor. No attempt is made to simulate the effect of a NMW on employment and prices, and obviously any complete analysis needs to take these effects into account. Recent research (see the discussion below) on this issue, however, indicates little evidence that a `moderate\\\' minimum will have any effect on employment and it is thus likely that the ‘first-round effects\\\' described in this paper are informative.

What happened to the wages of men since the mid-1960s

The gap between rich and poor has increased dramatically over the last 25 years and the incomes of the bottom 10 per cent were no higher in 1991 than in 1967 (see Goodman and Webb (1994b, this issue)). Wages are an important part of household income and the trends in the dispersion of wages mirror very closely the trends in the dispersion of income. Knowing the reasons for the changing structure of the wage distribution is thus crucial to an understanding of the trends in overall household income.

Changing public sector wage differentials in the UK

The paper estimates public sector wage differentials and their changes over time for men and women in the United Kingdom using panel data from the New Earnings Survey/Annual Survey of Hours and Earnings for the period 1975 to 2006. It presents estimates that are robust to unobserved workforce characteristics and that also show the impact of policy changes and cyclical factors, by allowing the average measured public sector 'premium' or 'penalty' to be time-varying. The methodology also allows us to examine the extent to which discrepancies in public and private sector pay induce changing relative qualities of the sectoral workforces. Results are given for men and women comparing mean wages in the public and private sectors as a whole. There is, on average, a very small positive premium over the whole period for public sector women and a very small penalty for men; however the variability of the differential is much more striking than the average difference. The method can also be applied to sub-groups in the labour market, and we illustrate the case of female public sector nurses and midwives, where the comparison group are private sector workers who have ever been, or will be, public sector nurses or midwives. Measured variations in this nurses' differential reflects the various changes in pay structure and government pay policies over the period; it is striking however that in the last decade, the 'raw' differential accruing to public sector nurses and midwives has declined almost continuously, whereas the composition and quality-adjusted differential shows no overall trend.

Wages, Trade Unions and the Labour Market

This thesis examines the links between unions, labour market outcomes and changes in the structure of demand for labour. It is split up into three self contained sections. The first looks at the determination of union presence in the private sector workplaces. Given the decentralised structure of wage bargaining in the U.K industrial relation system, the focus is on the presence of a union recognised for the purposes of bargaining over pay and conditions at the workplace. This is found to be determined historically by the characteristics of the labour and product market at the time the workplace is created. This means that unions may still have influence over wages in some industries and markets where their current relative power is weak. It is also shown that the presence of a recognised union at the workplace is the crucial determinant of union membership. Variations in union density, conditional on union coverage, in the workplace appear to be fairly random. The second part of the thesis looks at the relationship between unions and the structure of wages. It presents results suggesting that wage differentials between and within groups are narrower in the union than in the non union sector. It then exploits the finding that union presence in the workplace is determined separately (at a different time) from wages to test whether unions actually alter the wage policies in workplaces or whether negotiations only take place when they are deemed by management to have no effect. It is shown that part of the "sword of justice" role of trade unions, compressing wage differentials amongst semi-skilled workers can be explained by the different composition of the union sector. There still remains some evidence, however, that unions do compress the wage distribution. The last part of the thesis looks directly at the recent changes in the distribution of wages. It is shown that increases in the return to education can explain about half the overall increase in wage inequality and that there has been a sharp drop in the relative wages of new entrants into the labour market without post compulsory schooling. It is also shown that the decline in trade union coverage can explain a significant part of this increase in inequality, although it is accepted that economic factors (such as changes in technology) might have caused both the fall in union presence and the rise in wage inequality. Finally a comparison with West Germany from 1984-1992 reveals the importance of other labour market institutions such as the education and training system in determining the response of an economy to changes in the structure of demand

British Unions in Decline: An Examination of the 1980s Fall in Trade Union Recognition

The authors analyze establishment-level data from the three Workplace Industrial Relations Surveys of 1980, 1984 and 1990 to document and explain the sharp decline in unionization that occurred in Britain over the 1980s. Between 1980 and 1990 the proportion of British establishments which recognised manual or non-manual trade unions for collective bargaining over pay and conditions fell by almost 20 percent (from 0.67 to 0.54). The evidence reported demonstrates the importance of the interaction between the labour market, the product market, employer behaviour and the legislative framework in determining union recognition status in new establishments. The sharp fall in trade union recognition appears to be largely driven by a failure to achieve recognition status in establishments set up in the 1980s. These results, when taken in conjunction with recent changes in the nature of employment in the British labour market, seem to paint a bleak picture for unions and there appears to be no reason why the decline in union activity should not continue into the 1990s.

Changes in the distribution of male and female wages accounting for employment composition using bounds

This paper examines changes in the distribution of wages using bounds to allow for the impact of non-random selection into work. We show that bounds constructed without any economic or statistical assumptions can be informative. However, since employment rates in the UK are often low they are not informative about changes in educational or gender wage differentials. Thus we explore ways to tighten these bounds using restrictions motivated from economic theory. With these assumptions we find convincing evidence of an increase in inequality within education groups, changes in the "return" to education and increases in the relative wages of women.

A case study of Bigodi Wetland Sanctuary as a community driven Community-Based Natural Resource Management initiative : maintaining livelihoods and wetland health

Community-Based Natural Resource Management (CBNRM) is considered a win-win approach to reconcile conservation with natural resource use. CBNRM aims to accomplish conservation whilst prioritising development and contributing to poverty alleviation. This study analysed the different components of a CBNRM initiative, Bigodi Wetland Sanctuary (BWS), located in western Uganda. The study was carried out by interviewing the managing committee members (n= 8) as well as local households (n= 68) regarding the manner in which the project works, and the associated benefits and constraints. The main management issues recognised were a lack of monitoring and committee cohesiveness. The information gathered through the household survey enabled the calculation of the value of local livelihood options. This was done on the premise that conservation is better accepted when land users realise the economic value of natural resources. The average annual value of household livelihoods was represented by 30% crop production, 57% natural resource use, and 13% livestock. Lastly, wetland assessments were performed using the WET-Health and WET-EcoServices methodologies from the Wetland Management Series. These assessments indicated that the impacts of local livelihoods on the wetland were currently low but potential issues could arise with the increasing human population density. Ultimately, BWS presents both environmental and social costs and benefits. With a detailed and interdisciplinary method specific recommendations of improvement can be made to reduce such costs and further reconcile the conservation of Bigodi Wetland with local natural resource use.

Systems Analysis and Sectoral Linkages Impacting Climate Resilient Development in the SADC Region

SADC Future project supplementary material: Systems analysis and sectoral linkages impacting climate resilient development in the SADC region

Historical Analysis of Climate Change and Agriculture Events in the SADC Region 1970-2020

Historical analysis in foresight planning involves looking at what has happened over a relevant, prescribed timeline to try to understand why current and future patterns are emerging. This is done by reviewing relevant events, stakeholders involved, processes, and patterns that occur within the chosen historical time frame. Any recent history relevant to the focal issue is assessed for its potential continuation into the future, essentially providing a temporal bridge. For the purposes of this analysis, the historical time frame selected as relevant to the theme of climate-resilient agri-food systems in the SADC region is 50 years (1970- 2020). The topics chosen for analysis include the external systems or drivers of change likely to impact the future productivity of regional agri-food systems, namely climate change (droughts and flooding), agricultural pests and diseases, human health, trade, political past, and conflict. The timelines show the years that relevant events took place and the magnitudes of their impacts e.g. the number of human lives lost