Categories
Economics Politics & government

[858] Of minimum wage and unemployment rate debate in Malaysia

According to the New Straits Times on August 9, there’s a plan to introduce minimum wage “for three categories of workers“.

KUALA LUMPUR: Minimum wages are on the horizon for three categories of workers, a little over 25 years after the initial attempt failed largely due to flaws in the system.

A total of 250,000 private security guards, private clinic assistants and casual farm workers will soon be the first people in the country to enjoy a minimum wage.

If all goes well, they are expected to take home guaranteed monthly wages by the end of the year.

The article focuses on the benefits of minimum wage but it fails to be neutral by highlighting the other side of the coin. The article in fact only quotes bodies and individuals that are for minimum wage – labor unions and politician within a government that already have strong interventionist tendency. Therefore, allow me do a public service by raising the ugly side of minimum wage.

In a free market, prices and wages – for the sake of simplicity, let’s call prices and wages as simply prices – are the points where demand and supply coincide. That prices are at equilibrium. If we impose a price ceiling below the equilibrium prices, according to the law of supply and demand, supply will decrease while demand will increase. Artificial shortage will occur and this describes the current artificial sugar shortage in Malaysia. If the ceiling is above equilibrium prices, chances are, nothing will happen as the ceiling doesn’t affect the market. Remember, price ceiling simply means the “less or equal than” operator.

Price floor on the other hand is the “more or equal than” operator. So, if we impose price floor below the equilibrium points, nothing will happen because the restriction doesn’t affect the point itself. However, an introduction of price floor above free market prices will artificially decrease demand and increase supply. This last scenario is very relevant to minimum wage.

In other word, less employers will want to employ more workers while more employees will want to work. Hence, higher unemployment rate, ceteris paribus .

There are already talks of high unemployment among Malaysian youth. Despite that, unemployment rate of Malaysia as of the first quarter of 2006 is 3.8 according to Malaysia Department of Statistics, which is quite respectable in my opinion. Germany and France are used to around 10% unemployment rate while the US and most European nations currently suffer above 5%. Regionally, Brunei has 4.8% (2004), Cambodia 2.5% (2000), Indonesia 11.8%, Laos 2.4%, Myanmar 5.0%, Singapore 3.4 (2005 by Singapore Department of Statistics) and Thailand suffers 1.8% unemployment rate according to 2005 The World Factbook by CIA.

As for me, I oppose minimum wage. I prefer the market to decide on it, as long as market failure doesn’t occur.

Regardless of what I think, the introduction of minimum wage will reignite public discourse in youth unemployment as unemployment as a whole will go up with imposition of minimum wage above equilibrium wage.

Categories
Sports

[857] Of Ajax goes to the second leg with great advantages

Preliminary matches for the UEFA Champions League are underway and Ajax are on their way to the first stage . Ajax’s first opponent is FC Copenhagen and Ajax won the first leg in Denmark 1-2, courtesy of the best purchase by Ajax in recent years – Klaas-Jan Huntelaar. That win gives Ajax the away goal advantage and all Ajax need to do now is to at least draw in Amsterdam.

I didn’t watch the game and I haven’t had the chance to watch the proper highlight of the game. Despite that, I’m somewhat happy to hear good reports on some players. With Jaap Stam in the team, it seems that Ajax have found their new Chivu. Or Frank de Boer if we want to go down farther down the line. Still, it’s Stam’s first competitive game with Ajax and it would be premature to praise him too much.

Babel seems fantastic as always. I’m convinced that he’ll gain a place in the first team soon. One of the reasons why I like Ajax is the fact that the team keeps chunning out unbelieveable talented player over and over again. People like Babel.

Rosenberg and Rosales still look good. Both are as good as the other; both are excellent wingers. I’m not sure about Kenneth Perez though. He’s Ajax’s new signing from AZ Alkmaar.

But the real person on trial here is Ajax’s new coach, Henk ten Cate. Remember, Henk ten Cate was Rijkaard’s assistant at FC Barcelona, the last season’s European Champion.

I do feel however that this season is the first time Ajax will have a stronger attacking force coupled with reliable defense for a full season in recent times. Ajax’s problem has always been converting possession into goals ever since Ibrahimovic left Ajax for that old hag Juventus. So, this is a promising season, both for Eredivisie and in the European arena.

Categories
Economics Liberty

[856] Of censorship of blogs and its possible impact on web hosting industry

I bought a hosting plan from a Malaysian web host provider a year ago and it’s going to end later this month. I don’t plan on quitting blogging any time soon. Furthermore, I’m pretty much happy with the current service that I’m receiving; I don’t have too much complaint against my provider. So, it makes sense for me to renew my contract with them. However, with talk of censorship of blogs abound, I’m having a second thought; I’m thinking of relocating my server out of Malaysia.

As I’ve said again and again, I’d like to recognize myself as a libertarian. I hold liberty close to my heart. I will disagree to any infringement of my liberty and censorship is an infringement of my liberty. Therefore, it’s only natural for me to scorn the idea of censoring of any kind.

If the Malaysian government is going to censor blog, I’d like to preserve my liberty. It seems to me that the easiest way to preserve my liberty is to move my server out of the Malaysian authority’s sphere of influence. That means moving my server out of Malaysia and thus physically removed the threat of censorship off me. Australia sounds like a good country where free speech is relatively guaranteed. They speak English – well, sort of – and the time difference between Malaysia and Australia isn’t too perturbing.

I’m sure I wouldn’t be the only person in Malaysia to think of this. I’m sure if censorship of blog becomes a reality in Malaysia, many would move their server out of Malaysia. This would mean, less business for Malaysian web hosting providers.

What I’m trying to say is that censorship of blogs would hurt Malaysian web hosting industry with all else being equal. Government intervention would reduce the growth and probably the size of the industry .

Categories
ASEAN Environment Liberty

[855] Of happy 39th anniversary, ASEAN

39 years ago in Bangkok on this day, five countries that later many would identify as the Asian tigers – Indonesia, Malaysia, the Philippines, Singapore, and Thailand – gathered together to form the Association of Southeast Asian Nations . It’s ASEAN.

Mohd Hafiz Noor Shams. Some rights reserved

August is such a fun month. It’s the month Malaya gained its independence – and also North Borneo – it’s the month when Singapore was voted out of the Malaysian Federation by the Malaysian Parliament. By the way, all these three states with Sarawak later formed Malaysia on September 16. And then, it’s also the month of Indonesian independence. Remember, Indonesia tried to absorb Malaysian states into Indonesia.

Yes, again, it’s also the formation of ASEAN month. Happy birthday ASEAN.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

p/s – goodbye friend:

BANGKOK, Aug 7 (Bernama) — The endangered leatherback turtle population is effectively extinct in Malaysia and has deprived the country one of its most charismatic tourist lures, says a United Nations Environment Programme report.

Shedding light on the plight of the turtle species in the Indian Ocean and Southeast Asian region, it says Malaysia offers one of the most dramatic, best-documented examples of decline in the nesting population of marine turtles.

I last saw a real leatherback on the coast of Terengganu more than ten years ago. Now, it seems, the younger generation may never have the chance that I had.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

pp/s – re: government takeover of Coliseum, what the… From Bernama:

KUALA LUMPUR, Aug 8 (Bernama) — The Coliseum Theatre at Jalan Tuanku Abdul Rahman here, which will be taken over by the government, will not be converted into an arts film theatre.

Culture, Arts and Heritage Minister Datuk Seri Dr Rais Yatim said instead, the 84-year old building with Roman architecture would be transformed into a National Heritage Centre to exhibit Malaysian arts, culture and heritage.

I don’t think Dr Rais Yatim gets it. It’s the act of stealing from private citizens that makes this an issue; not the act of converting it into arts film theater or a heritage center.

Please Dr Rais Yatim, listen to us. There’s an opposition to the move yes, but please do know what the opposition is about. Get to know the why there’s an opposition.

Categories
Economics Environment Liberty

[854] Of the Malaysian Big Brother

For those that have read and understand Eighteen Eighty-Four by George Orwell, today’s front page of the New Straits Times should remind you of an Orwellian future . This is an adaptation by BBC, taken from page Eighteen Eigthy-Four at Wikipedia:

Fair use. Copyrights of BBC, from Wikipedia

The New Straits Times presents you the Malaysian Big Brother. He will watch out for us all:

Fair use. New Straits Times. Scanned by Mohd Hafiz Noor Shams.

Remember when Winston Smith was in his home, trying to write a diary despite the fact that was an offense? And that there was a camera in this home that transmitted everything the camera caught and send it back to the Big Brother?

It’s a tragedy that the opportunity cost of security is liberty and vice versa. A real tragedy. But does it have to be like that?

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

p/s – Kuala Lumpur is introducing congestion tax? From New Straits Times:

In planning to introduce an area road pricing scheme as a means to discourage private cars from entering cities, the framers of the National Urbanisation Policy are travelling a path that has been traversed with considerable success by London. But charging drivers a fee to enter the city centre would not exactly be a popular move and the authorities must be prepared to navigate the flak from a hostile public. But with Kuala Lumpur choking in traffic, despite new expressways, street widenings, one-way streets and yellow boxes, there is every reason to follow in London’s footsteps. Motorists need to get used to the idea that there is a price to pay for free-flowing traffic. Congestion pricing can no longer be ruled out as a solution.

This is a progressive policy and usually, I’d support it. But, like what the article later said:

If motorists are to be priced out of their cars, however, they also need to be served by an extensive, speedy and reliable network of rail and bus services every bit as efficient and accessible as the one that London provides – and which the city keeps on improving through funds augmented from the charges collected. Unless there is a viable alternative to the car, there is very little point in pursuing the idea of road pricing. The bottom line is that a broad array of other strategies, a proper transport plan and an integrated approach to urban planning is needed. This would require more thought, discussion, planning and better inter-agency co-ordination and collaboration with the local authorities.

Two days ago, I made a passing mention of Stockholm’s congestion tax trial. Read about it here.