Resources | Subject Notes | Economics
Poverty is a complex issue with multiple contributing factors. One significant cause of poverty is low wages. This section will explore the reasons behind low wages and their impact on individuals and economies.
Low wages refer to मजदूरी that are insufficient to meet the basic needs of a person or family. The definition of a 'living wage' varies depending on the cost of living in a particular country or region.
Several factors contribute to the prevalence of low wages. These can be broadly categorized into:
Individuals with limited skills and education often find themselves restricted to low-skilled, low-paying jobs. This creates a cycle of poverty, as limited income hinders access to further education and training.
Labour unions play a crucial role in advocating for workers' rights and negotiating for better wages and working conditions. Weak or absent labour unions leave workers vulnerable to exploitation and lower pay.
In a globalized economy, businesses often seek to minimize costs, including labour costs. Competition from countries with lower wages can put downward pressure on wages in developed economies.
Discrimination based on factors such as gender, race, or ethnicity can lead to lower wages for certain groups of workers, even when they possess the same skills and experience as their counterparts.
While minimum wage laws aim to set a floor for wages, their effectiveness can be limited. If the minimum wage is set too low, it may not provide a sufficient income to escape poverty. Furthermore, some employers may attempt to circumvent minimum wage regulations.
If workers are not highly productive, employers may be less willing to offer higher wages. This can be due to factors such as inadequate training, poor working conditions, or a lack of investment in technology.
Low wages have a wide range of negative consequences:
| Cause of Low Wages | Explanation |
|---|---|
| Lack of Skills and Education | Limits job opportunities to low-skilled, low-paying jobs. |
| Weak Labour Unions | Workers are vulnerable to exploitation and lower pay. |
| Global Competition | Businesses seek to minimize costs, putting pressure on wages. |
| Discrimination | Certain groups receive lower wages despite equal skills and experience. |
| Minimum Wage Issues | Insufficient minimum wage fails to provide a living income. |
| Low Productivity | Employers are less willing to offer higher wages due to low output. |
Low wages are a significant driver of poverty. Addressing this issue requires a multi-faceted approach, including investments in education and training, strengthening labour unions, promoting fair trade, combating discrimination, and ensuring that minimum wages are set at a level that provides a decent standard of living.