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Author: Hafiz Noor Shams
For more about me, please read this.
I am disappointed at the treatment which Tunku Aziz received with respect to his comment about the Bersih’s sit-in. It is quite clear the DAP-led Penang state government ended Tunku’s senatorship to punish him for criticizing the sit-in.
While I disagree with Tunku’s position and I do support the sit-in, the path taken by the state government is utterly disproportionate to the issue at hand. It reveals immaturity of those in power in handling disagreement over what I see as a minor issue. Worse, it suggests some kind of intolerance towards differences of opinion.
Some differences may require severe punishment. The case of Hasan Ali in PAS is a perfect example where there were severe differences that translated into actual actions that caused real unrest and consternation among the populace. Hasan Ali appeared determined to weaken the state government.
In the case of Tunku however, this is really the first real public disagreement. Furthermore, the disagreement is over something that cannot be turned into action. What could the Tunku do as a senator? To be sure, nothing as nearly as severe as what Hasan Ali did. And Tunku has no intention to bring down the state government or break the unity of Pakatan Rakyat coalition.
Another disappointment is the naivety on the part of the state government. It is pure foolishness to peg Tunku’s senatorship to his take on the sit-in. The result of the pegging has now raised questions about DAP’s commitment to free speech. That opens DAP to attack unnecessarily, especially when the general election is just around the corner. Now that Tunku has decided to quit the party, the DAP finds itself in a deeper hole dug by the party itself.
Among these disappointments, there is an insulting opinion floating around accusing Tunku as an UMNO mole.
What is this? Prior to this, the man was praised as the hallmark of integrity. Now, the man has none?
The DAP-led state government is a mistake. DAP supporters and sympathizers need to realize that. Step out for awhile and see the larger picture.
Instead of that they are leveling an outrageous accusation against a gentleman that is Tunku.
What is this? How is this filth any different from the slime UMNO is employing?
Have a bit of class. Now, class is something they can learn from Tunku.
I do not typically post news articles these days, but I think this news article is particularly relevant on one issue that I raised earlier.
MALAYSIA is losing billions of ringgit in palm oil exports because there is not enough foreign workers to harvest fruit bunches in the oil palm fields.
The Malaysian Palm Oil Board (MPOB) estimates that the industry need to hire another 40,000 foreign workers to harvest the riped fruit bunches in order to achieve the 19.3 million tonnes of oil output target.
[…]
“The trees are fruiting, but there’s acute shortage of harvesters and this is affecting the country’s palm oil export earnings,” he told reporters on the sidelines of MPOB seminar titled “Labour – Key Driver For Continued Sustainability of the Oil Palm Industry” held here yesterday.
“If the government approves of another 40,000 foreign workers, we can reduce wastage and surpass the 19.3 million tonne output target easily,” Lee said.
It is estimated that millions of tonnes of fruit bunches rot in the fields because planters are not able to hire enough foreign workers to harvest them. [Labour shortage hits palm oil export earnings. New Straits Times. May 15 2012]
This is the difference between debating from market knowledge with context and theorizing by reading one line in a news article.
Up in Washington,
he wrote the Lexington,
now in the mist,
no longer an economist.
(Peter David, the Lexington columnist at The Economist, died in a car crash in D.C. yesterday)
One impact of minimum wage is the general increase in labor supply in the market. Let us be clear and not talk too generally or loosely. Precision is key. I think if you cannot be clear, then it is very likely that you do not understand or have not thought of the issue well enough. And I think I understand it very well.
And I apologize if this appears to use a lot of jargons. I try to explain each jargon but I believe you will be able to overcome the jargons if you are really interested in the issue; if you really interested in the issue of minimum wage and not merely interested in the ideological battle, then you have to understand the mechanics. There is no short cut. Besides, the jargons are really self-descriptive.
And this is not a moral argument but rather it is the mechanics; just as explaining why the sky is blue does not make any moral argument, so is this.
So, here is the precise simplified mechanism: labor supply will increase if the newly instated minimum wage is higher than most of the prevailing wages. Higher wages attract workers into the labor market thus increasing the labor force/supply.
At the same time, minimum wage puts a limit on total jobs growth. Walter Williams has explained how that is so. Williams explains it in a specific context, but the logic can be generalized beyond the competitive context that Williams describes.
Now, combine the two effects related to labor supply and total jobs growth.
If you understand how unemployment rate is calculated, then you will realize how this will increase unemployment rate. For the uninitiated, the unemployment rate is calculated by taking the ratio of total unemployed individuals to the total labor force.
This is of course is not the general effect between minimum wage and unemployment rate, but part of that effect is explained by this particular interaction between variables.
This is how minimum wage, jobs and labor supply interact.
If total filled jobs grow faster than labor force, then unemployment rate will decrease.
If total filled jobs grow slower than the labor force, then unemployment rate will increase.
With minimum wage, there will likely be a shock to both total jobs and labor force growth. Since minimum wage puts a cap on total jobs growth and at the same time encourage more individual to join the labor force, there is a strong case to expect total jobs growth will be slower than labor force growth at the time when minimum wage is in force.
That will cause the unemployment rate to jump up. That elevated unemployment rate will remain at its new high level, discounting for other effects, until further development happens.
These other effects may increase or lower the unemployment rate on the balance. One factor that may blunt the effect of minimum wage on unemployment is inflation.