The impact of legal minimum wages on employment, income and poverty incidence in the Philippines
Paqueo, Vicente B.; Orbeta, Aniceto; Lanzona, Leonardo | December 2016
Abstract
It is commonly believed that mandating higher legal minimum wages (LMWs) is needed to help the poor earn a level of income that would allow them healthy and dignified lives. It is also seen as a tool to protect the weak against exploitation. This popular belief motivates and justifies the recurrent demands for hefty increases in LMW. But what is the empirical evidence behind this? This article seeks to address this question. It finds that in the Philippines, higher LMWs: (i) are likely to reduce the work hours of average workers; (ii) can be disadvantageous against the very groups that LMWs are intended to protect; (iii) decrease the employment probability of the young, inexperienced, less educated and women laborers; and (iv) tends to ironically reduce average income and raise household poverty rate. These results illustrate how rapid rises in LMWs can be counter-productive and can go against the spirit of equal protection principle of the Constitution. If the goal is to help the poor and protect the weak, then these findings warrant the need to think more deeply and prudently about the use of LMWs and to consider other tools for achieving decent wages.
Citation
Paqueo, Vicente B.; Orbeta, Aniceto; Lanzona, Leonardo. 2016. The impact of legal minimum wages on employment, income and poverty incidence in the Philippines. © Philippine Institute for Development Studies. http://hdl.handle.net/11540/9226.Keywords
Alleviating Poverty
Anti-Poverty
Extreme Poverty
Fight Against Poverty
Global Poverty
Health Aspects Of Poverty
Indicators Of Poverty
Participatory Poverty Assessment
Poverty Eradication
Poverty Analysis
Poverty In Developing Countries
Poverty Reduction Efforts
Urban Poverty
Results-Based Monitoring And Evaluation
Project Evaluation & Review Technique
Performance Evaluation
Impact Evaluation Reports
Evaluation Criteria
Development Indicators
Environmental Indicators
Economic Indicators
Educational Indicators
Demographic Indicators
Health Indicators
Disadvantaged Groups
Low Income Groups
Socially Disadvantaged Children
Aging
Rural Conditions
Rural Development
Social Conditions
Urban Development
Urban Sociology
Project finance
Resources evaluation
Needs assessment
Cost benefit analysis
Poor
Economic forecasting
Health expectancy
Social groups
Political participation
Distribution of income
Inequality of income
Developing countries
Rural community development
Mass society
Social change
Social policy
Social stability
Population
Sustainable development
Peasantry
Urban policy
Urban renewal
Results mapping
Risk assessment
Participatory monitoring and evaluation
Cost effectiveness
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