Minimum Wage in Naples Labor Market

 Minimum wage Is the price floor imposed by the government for the welfare of labor. Price floor Is the legal minimum on the price at which a good can be sold. It Is an attempt by the government to maintain prices at other than equilibrium levels. When a government Imposes a price floor, there will be two cases. One the price floor Is not binding if the price floor is maintained below equilibrium price level. In this case, the market forces naturally move the economy to the equilibrium level and the price floor as no effect.

In other case when price floor is above equilibrium level, such price floor is binding. In this case the market price equals price floor as government imposes such control on prices for the welfare of labors. At this point the quantity supplied exceeds the quantity demanded which results in surplus of labor I. E. Unemployment. Since the supply is high some seller are unable to sell all they want at the market price. The sellers who appeals to personal biases of the buyer, perhaps due to racial or family ties, are better able to sell their goods than those who do not.

By contrast, In a free market, the price serves as the rotational mechanism, and sellers can sell all they want at the equilibrium price. The Impact of minimum wage rate depends on the skill and experience of workers. Highly experienced and skilled workers are not affected because their equilibrium wages are above the minimum wages. Thus, the minimum wage raises the income of workers who have jobs but lowers the income of workers who cannot find Jobs. A labor market with a binding minimum wage: Minimum wage in context of Nepal: Minimum wages dictate the lowest price for labor that any employer may pay.

Wages of workers are considered a principal cause of Industrial disputes in Nepal. The prevalence of a low wage rate has aggravated the extent of economic exploitation of employees. An assessment has reflected that employers themselves are retelling a greater part of profits and benefits and only a small part to others sectors Including social securities and labor welfare activities. Wages and benefits are not compatible with increasing productivity and overall economic development of the country. So, to ensure workers a minimally adequate standard of living, the Minimum Wage

Determination Committee has set the minimum wage rate for formal sector accordingly. Naples labor market is subjected to the forces of supply and demand. Workers determine the supply of labor, and firms determine the demand. If the government does not intervene, the wages normally adjust to balance labor supply and labor demand. If government fixes the minimum wage rate above the market equilibrium level, the quantity of labor supplied exceeds the quantity demanded. The result Is unemployment. In Nepal the minimum wage was RSI. 200 In 2011 which Is not relevant due to the fast changing socio-economic realties. This Is the reason trade unions negotiating on behalf of employees are demanding that Mullen wages should be doubled to RSI. 12400. They have an argument that prices of particularly in Katmandu, an expensive city, even a monthly wage of RSI. 12400 for is far from enough for comfortable life. Some others have been asking for RSI. 15000 minimum salary claiming that it is insufficient to survive in towns and its suburbs with the present salary and wage structure.

So, let’s see the consumer price index (ICP) of Nepal to find whether the wage rate is determined on the basis of ICP. Annual National Consumer Price Index Base: 2005/2006=100 Highest minimum wage in South Asia: The minimum wage in Nepal as agreed by the employers and trade unionists in May 2013 is the highest in South Asia. Though Napalm’s minimum wage was highest in Pradesh in India raised theirs above Napalm’s. The average minimum monthly salary of India at US $47 still was lower than that of Nepal. Entrepreneurs believe that the problem of scarcity of workers in Nepal will decrease after the salary hike.

According to Upstairs Murray, Vice President of the Federation of Naples Chambers of Commerce and Industry (FINCH), the flight of workforce will be stopped as the daily wage has been increased along with the minimum monthly salary. Entrepreneurs have also claimed that the Indian workers can be attracted as the minimum daily wage has been increased from RSI. 230 to RSI. 318. Minimum Monthly Salary in Year Country In US $ Nepal Sir Lankan Bangladesh Pakistan 70 Attar Pradesh (India) Briar (India) Conclusion: The government has declared the minimum wage but it is difficult to implement because of anti-worker and anti-union mentality . N the part of the government, here is no system of implementation and mechanism for monitoring the progress. From the very beginning, disputes have emerged with respect to the implementation of the wages particularly in the formal sector. Wage issues have now become the most important agenda in the industrial relations in the country. If the government and employers do not take this matter seriously and if they fail to implement corrective measures, the workers will go frustrated resulting in industrial unrests and other adverse effects in productivity.

Over time and again minimum wage has increased. For long, the minimum wages earned by workers fell far below the amount needed to satisfy the family subsistence. But after unionization of labor, positive developments occurred in terms of real wages. However, only the fixation of wages cannot maintain healthy industrial relations. Regular monitoring of the implementation of the wages is very important. In the case of Nepal, this aspect is fully absent. Workers in enterprises or sectors where union is absent or weak are still compelled to work for a wage that is insufficient to earn a living.

It is recommended that the minimum wage is fixed for workers taking into consideration the existing inflation rate. Employers have been asking for a scientific method for salary and wage hike based on annual inflation rate published by the central bank that will end to fear every two years that employees might go on strike. The government’s move to automatically revise minimum salary and wage every two years from the beginning of the new fiscal year will give political parties little room for bickering in the industrial sector and disturb the business environment.