What are the most effective labor market policies for increasing wages?

I believe in a living minimum wage from a social perspective, but as it relates to business growth and expansion, I think any measures that endanger that are concerning.

The minimum wage is not about economic theory. Indeed economic theory hardly justifies introducing it. But economists have a hard time assessing the “social costs” of having a share of society living with income below a certain threshold. It is up to policymakers as representatives of society to assess whether the benefits for society of having working people earning above a certain level offset the lost of efficiency (i.e. the cost) of having a minimum wage. Different societies will choose different options depending on their values. It is not good or bad. It is a choice.

I believe that they can grow wages by raising the minimum wage; updating overtime rules; strengthening rights towards collective bargaining; regularizing undocumented workers; ending of forced arbitration; securing workers’ access to sick leave and paid family leave; closing race and gender inequities; awarding government contracts only to firms that adhere to wage, health, and safety laws.

In the light of studies and empirical evidence from my country, I can say that minimum legal wages bring informal jobs, underemployment and unemployement. Latin America in general needs to learn from SE Asia and accept that in order to raise wages we need to accumulate investment capital, and for that to happen we need to offer global investors an enviroment that is as profitable and as safe as possible, without having to deal with minimum wages that price millions of people out of the formal job market.

L’une des mesures les plus efficaces pour augmenter les salaires, c’est de valoriser tous les métiers et secteurs d’activités. De manière à ne plus avoir des métiers ou emplois précaires mais des métiers et emplois de passion, qui mettent l’humain au cœur des politiques du marché de l’emploi. Le salaire minimum n’est pas un levier efficace, il constitue une barrière au marché du travail.

In a perfect market, labor is remunerated according to its marginal productivity. And a higher marginal productivity (i.e. a higher wage) will likely depend on the skills of the labor force, which in turn depends on training and education. So education and training will be critical to increase wages.

Investing in human capital through skills development programs empowers workers to demand higher wages by increasing their productivity and value to employers. This approach has long-term benefits but may require time and financial resources.

As we know, education develops skills that make workers more productive. Similarly, wage differentials reflect differences in productivity. Accordingly, more highly educated workers would earn higher wages ceteris paribus simply because they are more productive than their less-educated counterparts.

From my point of view this is the main way to increase wages and standards of living. Many others would likely lead to inflationary pressures.

Education is of paramount importance in the long term in order to secure a functioning economy and more technical employment with higher salaries. It is important to note though that there are significant wage disparities among comparable jobs with similar education, depending on the country. Countries with higher capital stock will have their bussinesses competing with each other for qualified labor. So, while good education is vital for higher wages in the long run, technical knowledge can only be translated to higher wages when there is enough investment.

I think when it comes to addressing this question, it might be helpful to consider implementing a couple policies together. Certainly implementing the Education and Training policy has the least inflationary effect and allows for a wage increase by merit, and in my opinion unemployment benefits may have a disincentivizing effect on the labor force. However a combination of the two might yield successful results, perhaps introducing a requirement to attaining further field-specific training and education in order to qualify to receive unemployment benefits might increase the quality of the labor force without a disincentivizing effect.

Unemployment benefits don’t help make the national labor force better. We should certainly provide a social safety net, but we should also provide opportunities and motivation to succeed in the private sector.

Unemployment benefits A safety net can allow people to maintain their socioeconomic circles which often results in finding employment faster. From an employer's perspective this offers higher candidate match success. It also allows people to retrain, increasing their employability and access to changing work environments. Employers will benefit from a more fluid labour pool. From a less economic view, a safety net improves wellbeing and health, an important aspect for the most vulnerable in society. This will likely result in people finding work quicker. It's important there is a strong safety net without being too generous. Maybe a sliding scale tapering them down over length of time? A poor one would just push the costs elsewhere.

O seguro-desemprego oferece uma rede de segurança para os trabalhadores que perdem seus empregos, protegendo sua renda enquanto procuram uma nova oportunidade. Isso ajuda a evitar quedas acentuadas no padrão de vida durante períodos de desemprego. Alguns argumentam que o seguro-desemprego pode criar desincentivos para os trabalhadores procurarem emprego ativamente, levando a uma redução na oferta de mão de obra disponível.

I know that it might be argued that there are economic reasons to have unemployment benefits (decisions are made differently when risk is mitigated). But i guess that this is a more of a social choice. What is the cost (loss of efficiency) of having unemployment insurance? What is the cost of having people without an appropriate income because they lost their job? What is bigger? This is partly about economics but it is more about social decisions. Two decent but different societies can make different choices.

I feel collective bargaining is a two-sided coin. On one hand, folks getting together to fight for the rights of the every man is great. That said, to the extent that it genuinely creates a big nuisance to the corporation, that can have detrimental effects (as we’ve seen historically).

It is all about market imperfections. Does an individual has the bargaining power of a corporation? Is a trade union the way to balance power asymmetries? Answer these questions and you will be close to conclude whether collective bargaining is the answer.

Collective bargaining is counterproductive. It creates unfair rules and pays for those not in the bargaining agreement. You can demand higher pay however you want. But if the business ended up closing down due to lack of profit, what goods does your higher pay temporarily do to your long-term financial gain? A better approach to ensuring fair labor policy is to have a basic, minimum national standard.

All the noted labor market reforms are great but unfortunately, no reforms can possibly complete with the free market economy. Ultimately, workers will be paid what they’re worth no matter how you slice it…

An industry that is capable of paying higher wages must therefore afford them. Higher wages are commonly associated with higher productivity jobs and jobs that require higher skill levels. In turn, more qualified workers should yield better returns. We see, then, two moving parts here: companies have to be more productive, get better returns and workers have to be qualified to do their jobs. Policies that help with that include incentives to companies acquiring better technology, management training for SMEs, targeted subsidies aiming at productivity. For workers, technical and vocational training, a good job-matching system, opportunities to keep learning/improving their skills

You want markets to work efficiently. And you want a fair society. And if market imperfections require government intervention then labor reforms may be an answer. But this is different from a situation when government intervention is driven by reasons other than market failures.

This reform is urgent to prepare human resources in embracing digital era with new skills related to AI. Low skill labor soon will be replaced by machines/robots. Minimum wages will disappear. It is the era we should put human beings at the high position as their innovation capabilities.

Teach the worker how to become financial independent. Also teach the worker how to recognize a need or want in society. Also how fulfill that need by inventing a product or service to satisfy that need or want.

Unbelievable poverty and destitution amidst unprecedented prosperity and wealth is one of the perplexing paradoxes of our time. While this may have been beyond the daily sight and knowledge in the past, transformative power of information and communication technology has made it clearly visible in the television screens of all around the world, making such disparities increasingly questionable and untenable. So, one of the essential fundamentals of a new and sustainable global democratic, peaceful and prosperous political and socio-economic architecture is a better system of collective prosperity and enhanced productivity with dignity of labour and caring and sharing system of free enterprise.

With structural unemployment becoming longer and longer, we have to seriously consider universal basic income and robot tax to ensure certain protections for human labor in the age of AI/Automation.

Wage transparency and subsidised job coaching: -Being able to research what everybody earns. In certain scandinavian countries, this is already reality. -If subsidised job coaching exists at the same time, people will know what their skills are, the job they would like to do, and they will have a view on whether the required educational efforts are worth it.

Here's what else to consider: 📌Targeting: Policies may be more effective if tailored to specific sectors or groups facing the biggest wage challenges. 📌Monitoring and evaluation: Continuously assess policy effectiveness and adapt based on ongoing performance and feedback.

Performance Management Systems are one way to ensure that organisations are recieving value for money in a high wage environment.