tag:blogger.com,1999:blog-18156735.post114668571794097235..comments2023-10-29T17:43:27.054+07:00Comments on café salemba: How more, not less, globalization can be beneficial for low skilled workersUnknownnoreply@blogger.comBlogger9125tag:blogger.com,1999:blog-18156735.post-26915367875330493022009-05-20T11:47:28.219+07:002009-05-20T11:47:28.219+07:00agree ... more globalization can be beneficial for...agree ... more globalization can be beneficial for less developed country and surprisingly for high income countries as well, but the benefit is the lowest for middle income countries like Indonesia (i.e. middle income trap)<br /><br />"We find that when people can choose between wage work and managerial work, the output gains are U-shaped: A worldwide labor market raises output by more in the rich and the poor countries, and by less in the middle-income countries"<br /><br />http://www.nber.org/papers/w13686Haryohttp://www.facebook.com/profile.php?id=1090815621noreply@blogger.comtag:blogger.com,1999:blog-18156735.post-1147811928616069062006-05-17T03:38:00.000+07:002006-05-17T03:38:00.000+07:00Ujang, on the addendum, has anyone looked at the i...Ujang, on the addendum, has anyone looked at the impact of immigration in US on the wage GAP between skilled and non-skilled labour? Or in other words, bringing the debate into the issue of income inequality and distribution.Rizalhttps://www.blogger.com/profile/00173988218021291027noreply@blogger.comtag:blogger.com,1999:blog-18156735.post-1147267661844092142006-05-10T20:27:00.000+07:002006-05-10T20:27:00.000+07:00thanks a lot guys. will try to digest this stuff f...thanks a lot guys. will try to digest this stuff first before making any further comment. Rizal, that paper sounds very interesting, i heard somewhere about that paper, too... can't place exactly where now.Anonymoushttps://www.blogger.com/profile/13453903374418067594noreply@blogger.comtag:blogger.com,1999:blog-18156735.post-1147133031351744952006-05-09T07:03:00.000+07:002006-05-09T07:03:00.000+07:00Rizal, thanks, I forgot about that paper.I don't k...Rizal, thanks, I forgot about that paper.<BR/><BR/>I don't know of any papers linking profitability and minimum wages post-crisis. I would imagine a study like that would have to take into account plants/establishments that exited the market either because of the crisis and/or minimum wages. Otherwise you might mistakenly find little or no effects on profitability which might only be true for the survivors but not necessarily true for those driven out of business (a non-random selection/attrition problem) .Ujanghttps://www.blogger.com/profile/11743023980780274491noreply@blogger.comtag:blogger.com,1999:blog-18156735.post-1147033701014136782006-05-08T03:28:00.000+07:002006-05-08T03:28:00.000+07:00And this paper too. They conclude, among others, i...And <A HREF="http://www.ilo.org/public/english/region/asro/jakarta/download/paper3.pdf" REL="nofollow">this paper</A> too. They conclude, among others, in Indonesia, there is no strong empirical evidence showing negative relationship between the level of minimum wage and the level of employment; and despite sharp increase of minimum wage during 1985-97, business profitability was not affected --watch the period carefully, 1985-97 only. I don't know in the period afterward. <BR/><BR/>Ujang, do you have any info on this? Some observers, and businesses, of course, say that the minimum wage destroy business profitability after the crisis. Do they, or you, have numbers on it?Rizalhttps://www.blogger.com/profile/00173988218021291027noreply@blogger.comtag:blogger.com,1999:blog-18156735.post-1147022915964321452006-05-08T00:28:00.000+07:002006-05-08T00:28:00.000+07:00To me there is little question as far as policies ...To me there is little question as far as policies and regulations are concerned; what is desirable is to create more employment, and let wages be determined by labor productivity. <BR/><BR/>Policies that affect wages directly (i.e. minimum wages policy) are always controversial. Mainstream economists have always argued that minimum wages will create unemployment but the far-from-ending debate has always been about the magnitude and importance of this unemployment effects. It depends on a lot of things, for example on what kind of firms the law is actually binding, the characteristics of labor at the margin (around the minimum wage), the cost structure of the firms, et cetera. <BR/><BR/>Not many studies have been done on the effects of minimum wages in the context of Indonesia, but we can learn from the existing few such as <A HREF="http://ideas.repec.org/p/ewc/wpaper/wp38.html" REL="nofollow"> this</A> where the authors find a significant disemployment impact on women, youth, and lower skilled workers, <A HREF="http://www.economics.unimelb.edu.au/lcameron/papers/Alatas&Cameronv011.pdf" REL="nofollow"> this</A> where the authors do not find employment effects on larger firms, and <A HREF="http://ideas.repec.org/p/pas/papers/2005-09.html" REL="nofollow"> this</A> where the study shows how minimum wage is unlikely to be succesful as an effective policy to reduce household poverty. And <A HREF="http://www.econ.yale.edu/growth_pdf/cdp802.pdf" REL="nofollow"> here's</A> a paper I still find useful to read from a "big picture" kind of perspective. Hopefully these references are helpful enough :)<BR/><BR/>As to the issue of Indonesian emigrants, some think this is a very underappreciated issue. To quote a number from this <A HREF="http://ideas.repec.org/p/pas/papers/2004-02.html" REL="nofollow">paper</A>, it was estimated that around 1997/98 there were 2 millions of unregistered migrants in Thailand and Malaysia from within the regions (think Indonesia, the Phillippines), compared to 3 millions of illegal immigrants in Europe from around the globe at the time.Ujanghttps://www.blogger.com/profile/11743023980780274491noreply@blogger.comtag:blogger.com,1999:blog-18156735.post-1147014568163323212006-05-07T22:09:00.000+07:002006-05-07T22:09:00.000+07:00okaaaay... ;D i think i sort of understand that, t...okaaaay... ;D i think i sort of understand that, though if i understand correctly that still don't answer the question right? <BR/>I mean, for a country like Indonesia at the moment now, can the government legitimately argue that employment is more important?<BR/><BR/>well... just curious, i appreciate the comment anyway. any good references? I'd appreciate that. thanks!!Anonymoushttps://www.blogger.com/profile/13453903374418067594noreply@blogger.comtag:blogger.com,1999:blog-18156735.post-1146970931123122652006-05-07T10:02:00.000+07:002006-05-07T10:02:00.000+07:00Treespotter, more employment is good and so are hi...Treespotter, more employment is good and so are higher wages. Alas, in reality they sometimes -- many times -- constitute tradeoff. Economists, at least we here, believe, higher wage should come with higher marginal productivity. Or put it another way, higher productivity should be compensated by higher wage. You see, the size of employment now becomes less relevant. Yet, it can be a consequence of the other two (higher productivity and higher wage) that eventually create an incentive for employers to hire more labor and an incentive for workers to supply their labor. <BR/><BR/>Ujang can supply better argument and references, I believe. This is his department :-)Acohttps://www.blogger.com/profile/16457844915547531461noreply@blogger.comtag:blogger.com,1999:blog-18156735.post-1146905630123764282006-05-06T15:53:00.000+07:002006-05-06T15:53:00.000+07:00hi guys,i have a question not emigration related a...hi guys,<BR/><BR/>i have a question not emigration related as that is probably less relevant for Indonesia, no?<BR/><BR/>well, the question is, which is more important in the current context, more employment or higher wages? <BR/><BR/>any references in this neighborhood would be nice :DAnonymoushttps://www.blogger.com/profile/13453903374418067594noreply@blogger.com