Categories
Economics

[2542] The ageism of minimum wage

In general, minimum wage affects the labor market negatively. At some level, it will increase the unemployment rate. That may happen either through direct disemployment as employers struggle to meet the cost, or through the freezing or insufficient job creation growth as the labor force increase. Whatever it is, I believe the relationship between minimum wage and unemployment rate is relatively well-publicized and many who are serious about the issue do know of the relationship. The lay proponents of minimum wage still promote their policy but they do know that relationship is a wall to scale.

There are other less publicly known effects. Discrimination against small firms is one. The adverse impact on low-skilled workers is two. There are others.

Here is another and it is the distribution effect across age.

Consider two workers of the same skills. Worker A is 25 years old. Worker B is 50 years old.

Both qualify for minimum wage.

If an employer had to choose between the two for a low-skilled job, which would the employer employ?

Without hesitation, I would take the younger one if I was the employer.

Between a 25 years old and at 50 years old, it is very likely that the 25 years old will be the preferred choice of anyone with profit-motive. He is young and that means he has better health than his older counterpart in general. There are other factors of course like attitude and initiative (if the particular person in his 20s is a damn punk and the 50 years old person is a nice old lady, I will employ the lady) but there are many reasons to think that an employer can squeeze more productivity out of the young worker than out of the older worker for a given wage, on average.

For those who know their economic jargon, then that means the younger worker offers better marginal product than the older worker will on average. In simpler terms, the younger worker offers greater productivity than the older worker.

How about experience? Surely experience works in favor of the older workers, right? Remember however that low-skilled jobs require little training. The kind of jobs requires no or little experience. That effectively discounts experience as a consideration.

When one pays a person according to his or her productivity without any restriction on compensation, then one can employ anybody up to any number until your last marginal product of labor is no longer positive. Note the causality: your productivity determines your wage. The first determination is your productivity and your wage is a function of your productivity.

Under minimum wage, the wage is the first determination and your productivity now is a function of your wages. Here, wage is the first determination because an employ know his cost and he will want to find workers with the productivity that matches the cost that is minimum wage. This immediately limit the kind of workers that the employer will employ.

Now, go back to the productivity of the young and the older workers mentioned in the beginning. Older workers will have lower productivity to younger workers. That is an immediate disadvantage in terms of employability in the age of minimum wage.

I think this point is important because a lot of younger workers do not really need a job. Many are out of school and are merely looking for extra pocket money to have some fun. These young workers will qualify for minimum wage. They do not need the jobs. The jobs are merely summer job so-to-speak, not necessarily part-time too.

Compare this to older workers who qualify for minimum wage. This type of older workers will likely need the minimum wage jobs more than the younger workers. They are in it to survive.

Controlling for everything else, minimum wage can hurt the workers that, arguably, the policy of minimum wage is supposed to help. Yet, the policy hurt those that it is set out to help.

Categories
Photography Politics & government Society

[2541] He wants a clean election

Categories
Sports

[2540] Here is to the 31st Eredivisie title

This season has been an amazing one for Ajax. Ajax had to fight really hard to get where it is right now and that is number one.

Too many times, the prospect of a spot in the highly lucrative Champions League that is important to the financial health of the team was increasingly distant. AZ Alkmaar, FC Twente and PSV Eindhoven dominated the top spots while Ajax lingered below. It was frustrating.

The sign showed that the Dutch Eredivisie was no longer a division dominated by the Big Three: Ajax, Feyenoord and PSV. It has been so far several years now but this season has been the most competitive as far as I remember. AZ and Twente had sealed their reputation. Their previous years performance was not just a temporary luck. It was a permanent boost that made the two deserving of respect.

By mid-season, Ajax was fourth in the Eredivisie, 5 points behind leader AZ Alkmaar and just 2 points above Feyenoord. By the end of February, Ajax was fifth with even Heerenveen was placed above Ajax. The only saving grace was that Feyenoord squatted the sixth rung. Yet, Feyenoord beat Ajax 4-2 in January. The more painful defeat was back in November when FC Utrecht beat Ajax 6 to 4.

Things only started to turn around late in the season as the latter stages of the Champions League and the Europa Cup were underway. Ajax performance in the Champions League and later in the Europa Cup was disappointing. I personally thought Frank de Boer, despite being an Ajax legend and despite his stewardship that brought the title back to Amsterdam in the last season.

But the exit had a silver lining. It allowed the team to focus on the domestic league while others were still busy with European competitions.

It was during this time that PSV did terribly and suddenly found themselves quickly discounted from winning the crown. Ajax meanwhile scored 12 straight wins since February. That included 2 wins against PSV and Twente.

And yesterday, Ajax effectively won the Eredivisie from the 31st time. It is still not official because with two games remaining, only 6 points separate Ajax from Feyenoord. But with over 53 goals difference and Feyenoord having only 29, Ajax definitely can lose the final two games and still win the Eredivisie.

I think the biggest surprise is Feyenoord. The Rotterdammers did very poorly in the last few seasons that it was impossible to hate them. In the last season, Feyenoord finished 10th. This season they may finish second. At worst, sixth. Judging by their fixture, first against Heracles and later Heerenveen, they are unlikely to lose their grip on the second place.

Whatever happening to the Rotterdammers, I am happy. This is the first time in a very long time Ajax won the title in two consecutive years. The last time that happened was in, well, 1995. How appropriate!

Categories
Photography Society

[2539] Crowd violence and police stupidity

I had an expensive bet with a friend that more than 200 would be arrested after the Bersih dust settled. The tally now is coming close to 500. I won. My record with him now is 2-0 in my favor.

In the beginning, the odds were against my favor. It appeared that the government had finally reached a kind of maturity to match a more political active society. The gathering crowd was not harassed and the authorities, apart from closing Dataran Merdaka with barbed wire, were largely taking a hands-free attitude. I started to think that I had entered into a fool’s wager.

There were some stupidity by the police, like trying to drive several trucks right through the middle of the crowd. Some irresponsible individuals threw plastic water bottles at the trucks. This trend would prove bad later as the situation deteriorated beyond anybody’s control after somebody broke the barricade to Dataran Merdeka that invited overreaction by the police force, which fired unreasonably tear gas right into a largely peaceful crowd. With the crowd spanning from Dataran Merdeka to Sogo on both Jalan Tunku Abdul Rahman and Jalan Raja Laut and to well beyond Masjid Jamek, it is a wonder that there was no deadly stampede. (There was another large group on the other side of Dataran Merdeka, at the Bar Council; Marina Mahathir has story from the other side).

So, I had expected to lose the bet. That was until I saw on the road to Jalan Parlimen a troop of riot police was equipping themselves with their gears. This was probably an hour before the chaos began.

When I saw that, I began to retreat to the back, expecting the worst. I know how it feels like to be exposed to tear gas. I had no intention to go through the same experience all over again.

I did not know whether the riot police was just on standby mode or was preparing to disperse the crowd regardless of what happened. I am more inclined to believe the latter. The reason is that in the morning, plain cops were forming a barrier. The riot police riot in their full gears took over when it was close to 2 o’clock, the time when the Bersih sit-in was to begin officially.

Whatever the possibilities, the crackdown started later than I expected. So, I spent the time exploring the true size of the crowd.

The size was just amazing. This was larger than the first and the second incarnation of Bersih. I went to both and this sit-in surprised me the most. I had expected protest-fatigue. I had expected a smaller protest. I was dead wrong. This was bigger than anything Malaysia had ever seen. Anybody who thinks otherwise is probably a Barisan Nasional sympathizer, or an anti-protest couch potatoes dependent on papers like Utusan Malaysia.

Both my phone and internet connection did not work close to Dataran Merdeka. Somebody told me it might be network congestion. The funny thing was that, farther away from Dataran Merdeka, the connection worked. I suspect a jammer was deployed.

As we all know by now, the worst came. Some fools broke the barricade and the even more foolish riot police fired tear gas into the crowd of thousands without warning. The police could have arrested those whom broke the barricade, but despite the hundreds of police officer deployed at Dataran Merdeka, they chose to punish the thousands.

That made the crowd angry but they knew they were no match for tear gas and water laced with chemical. And so they retreated.

This was an angry crowd. Remember that adjective.

The anger was focused solely on the police though. It requires no brainpower to understand that. It was a concentrated anger against the police force and there were proofs to this. Civilian vehicles were let through. The medical team was cheered on and let through.

The police, well, water bottles were thrown at them. With kilometers of angry crowd, some police officers had the audacity to drive their vehicles through the angry crowd. This was utter stupidity by the police, always clueless about the situation on the ground, despite having deployed helicopters and paragliders in the air, in the era of social media.

The hostility and violence of the minority in crowd was regrettable and should be condemned. Yet, would you, being the sole focus of crowd anger, drive through a road filled with kilometers of angry crowd, at unbelievable speed that could cause roadkill?

Here is a proof of that stupidity and the targeted hostility.

More balls than brain.

The unnecessary violence by some in the crowd, and the stupidity of the police caused a police car to ram into at least two protesters as it was later reported. And the car was overturned by an angry mob. It is unfortunate that that is the focus of the mainstream media, and not the context, or the larger issue of electoral reform, or the lies of political transformation program.

Categories
Activism Photography Politics & government Society

[2538] Where were you today?

And so I went.

I went because I remembered a line from CNN long ago. The news network ran an advertisement showing videos of important development from around the world. It ended with a line, “where were you?”

I do not want to answer, in the future, “I was in my bed.

I will not need to. I went.