Minimum Wage Analysis in OECD Countries in the Neoliberal Era(1980-2014)


Koc A.

1st Forum on Studies of Society (FSS) International Conference on Social Sciences and Humanities, Craiova, Romanya, 31 Mart 2016, ss.203-210 identifier

  • Cilt numarası:
  • Basıldığı Şehir: Craiova
  • Basıldığı Ülke: Romanya
  • Sayfa Sayıları: ss.203-210

Özet

The analysis of minimum wage in the process of reproduction of labor is essential in terms of political economy. Neoliberal period of capitalism (1980-2014); in the heterodox literature, is considered to be the years of all-out attack of the capital against the labor. This study aims to test whether this argument is valid or not. In this context; the minimum wage necessary for laborers and their families to accommodate their life expenses during the Neoliberal era is investigated through data analysis. The relationship between GDP and the minimum wage during 1980-2014 are examined for the countries in OECD data set. The data are analyzed using the indexation method of relationship between two variables. The findings obtained in this study are as follows: The increase in the minimum wage indices in all countries covered by the study is less than the increase in the GDP indices. The average GDP index of ten countries increased by 2.1 fold in this period while the minimum wage index increased by only 1.1-fold creating a 1-fold difference. Thus, in the neo-liberal period, the workers who had to live on minimum wage could not fully benefit from the economic growth in their countries. The countries where the most difference between the two variables are Luxemburg with (-2.3) fold, USA with (-1.7) fold, Canada and the Netherlands with (-1.2) fold. Greece has the least difference with (-0.4-fold). Moreover, the average annual GDP growth in the ten countries in the relevant period was 2.2%, while the minimum wage increase was only 0.4. The result of this study shows that the real minimum wage in some OECD countries fell behind the increase in real GDP in Neoliberal era. The reasons behind this decline in labor income in the context of minimum wage at this period are the subject of a separate study.