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Raising minimum wages across Asia and the globe: the Pacific equalizer

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Beginning on April 1st, 2012 Thailand's government honoured one of the promises it made during elections and raised minimum wages across the country. This is only the beginning for new politics sweeping countries across Asia and it is a mirror of the same direction being taken in Latin America.

The Malaysian government, for example, will soon institute the first ever minimum wage in the history of the country and this is the direction that countries across Asia are heading in. Asian countries have decided that the way to combat a widening global inequity gap is by strengthening domestic social security nets -- the most basic of which is the minimum wage.

Countries in Latin America and beyond are moving in the same direction. Mexico announced a 4.2% rise in minimum wages nation-wide that took effect January 1st, 2012. The fact that middle-developing countries world-wide have not necessarily co-ordinated their efforts but still all individually see the same solution to the same problems speaks volumes to the integrity of strengthening social security nets; minimum wage, health care, pensions are only the beginning.

By comparison, European nations, as well as the United States and Canada, to offset the ramifications of national budget deficits, have focused on cutting spending meant to provide for the social security of their citizens. These are referred to as "austerity budgets" and result in taxpaying citizens paying for the excesses of their corporate and business class through the cut of social services that most taxpayers depend on.

Throughout Europe, from Greece to Spain, the taxpayers are not responding well to their "austerity budgets". The basic question remains: why should citizens have to pay the price when it was lack of government regulation and/or active accountability for the financial sector which caused the apparent budget deficits?   

For years, US government officials openly decried the cheap cost of labour in places like China or India as being the basic reason why jobs were being lost at home: multinationals took their business to where labour was cheaper. Now that these countries, like China and India, are raising their minimum wages to ensure the quality of life for their citizens, they are once again being decried by Western governments because a rise in labour cost for companies such as Apple or Nike means that the shelf price of products in US stores will also rise, unless the companies themselves are willing to settle for less of a profit margin.

At some point there has to be some reconciliation between the standard of living at the high end and low end of the inequity gap, if any sort of global unity is to be achieved. It doesn't mean that those on the bottom have to reach the level of those on top -- it means that there are those on top who may be living to an excess which is driving the inequity gap.

When Haiti tried to raise the minimum wage for its workers, the Haitian government was toppled by a Western-backed coup, Canada playing a large part in the planning and procedure. A raise in the minimum wage for Haitian workers would have meant a rise in the price of t-shirts, socks and underwear on shelves in US stores, like Wal-Mart, that many American working families would have felt in their pocketbooks. That was the problem for Western governments with Haiti's attempt: A rise in the standard of living for their working class would have been transferred onto our working class.

The solution is simple, and it is what the largest multinational corporations will have to learn to do if they wish to stay solvent and prevent domestic bloodshed over the next decade while the rest of the developing world raises the standard of living of their working class -- accept reduced levels of profit for their companies in order to maintain the standard of living of the Western working class: by not transferring their operating costs onto their domestic consumers.







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