dc.description.abstract | Taiwan is in a state of "Prices have gone through the roof, excluding the wages." The government has been increasing the minimum wage since 2010. They hope that increasing in the minimum wage will lead to increase in the wages. Can the minimum wage policy raise the wages? What is the amount of variation in the adjustment of the minimum wage to wages? The above problems give me the motivation to do the research, and are the purpose of this thesis.
In this research, we use time series analysis to analyze the minimum wage effect on the wages in the economy, as well as in the industrial and service sectors. The data is from AREMOS Taiwan Economic Statistical Databank and Manpower Survey from Directorate General of Budget, Accounting and Statistics, Executive Yuan, R.O.C. The period is from 1994 to 2013. We use both annual data and quarterly data.
The empirical results show that the increase in the minimum wage lead to decrease in the wages in the short run, but it may have a positive effect on the wages after a while. In the long term, the increase in the minimum wage has a negative effect on the wages in the economy and the service sectors. However, it has a positive effect on the wages in the industrial sectors. The magnitude of the impact of the minimum wage to wages in the economy is from -0.034% to -0.093%, in the industrial sectors is from 0.193% to 0.832%, and in the service sectors is about -0.052%. The minimum wages hike has a greater impact on the marginal labors and employee of Small & Medium Firm Enterprises (SME). The industrial structure is mainly SME in Taiwan. The enterprise may hire more atypical workers when the minimum wage is increasing. These are reason why the increase in the minimum wage has a negative effect on the wages. The empirical results are different from previous researches. We find that the increase in minimum wages will compress the wages in the economy. It means that increasing the minimum wage will have a negative impact on the society; hence the government must carefully evaluate when making the minimum wage policy.
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