Minimum Wage versus Remittances

In order to counter the flow of illegal immigrants in the United States, they devised Acts and Regulations that restrict individuals coming from Central America. There have been increased in qualification and ineligibility to people from the Central America to enter the United States for three up to ten years if they are found guilty of entering United States borders illegally (Latin America and Caribbean Center, 2007, page 1). Honduras and Migration There is a natural tendency for people to migrate from one land to another in cases that the previous land was not abundant of resources to satisfy the person’s basic needs.

This human instinct was what can be observed from the phenomena that hit most Central American countries in 1998. Most of the family members decide to go outside of their countries for faith of having better fortunes somewhere else. There is nothing wrong with this so far, unless of course things are done illegally. At the height of the Mitch disaster, human trafficking from the Central America to United States has been so popular. People are moving out, not minding how they could get out of the poverty-stricken situation that they have been experiencing (Sica & Avina, 1999 page 1).

Although there are laws that forbid human trafficking, the enforcement of laws in Honduras was not strictly implemented as can be seen in the previous discussions. This has created more problems in United States. Honduras has started to get positive impact in this kind of solution. As discussed, remittances have continued to become a great part of Honduras Gross Domestic Product up until today. It has affected the national economy and gives the labor market a boost. There are about 40% of the households who lived under the poverty line which receives remittances.

How ever, there is a problem that most people in Central America have been experiencing concerning money transfer (Red de Desarrollo Sostenible, 2005, page 6). According to Sica and Avina (1999), the rate of money transfer to Central America is about 20% of the total amount to be sent. As the discussion progress, it can be gathered that Minimum Wage is a very problematic and risky legislative tool to take with respect to the reduction of poverty. Although it is possible to increase the minimum wage and it has some benefits, still the problems that it can present generally outweighs its necessity (Red de Desarrollo Sostenible, 2005).

Thus, as natural as changes in ecological niche and survival instincts, people from Central America specifically in Honduras have resorted to migration and human trafficking. It was one of the most popular ways of escaping the poverty in Honduras (U. S. Department of State, 2007). While it does help people to earn a fortune and it have helped the economy prosper, still, there are issues concerning migration that could deeply affect the economic relationship of Honduras with other countries especially the United States (U. S.

Department of State, 2007) . This is the case since the united States have been making it more difficult for legal migrants to enter their borders and legal migration cost more and more (Latin America and Caribbean Center, 2007). The earnings from foreign remittances have been the main source of income in Honduras. Mainly, remittances help alleviate poverty and increase the net family income without doing damage to the workers and without disrupting the labor sector (Red de Desarrollo Sostenible, 2005). Conclusion and Reccomendation

Since people receive more income through remittances, it would be very beneficial if the government of Honduras would pay attention on increasing the foreign remittances of the country. This could be done through long-term plans and with coordination to other country’s business sectors and government. First, the government must try to improve and promote quality education for those who aspire to have high-paying jobs and to work abroad. In line with this, the government must identify what are kind of workers are needed by other countries.

For instance, nurses, care givers and house maids are in demand in most European and Middle Eastern countries (Red de Desarrollo Sostenible, 2005). Second, the government must offer short term courses which would increase and develop the skills of its workers. For instance offering seminars and short courses on air conditioning repair, mechanical and electronic repairs which would help unemployed workers find jobs (Gindling & Terrell, 2004). Third, the people must in their own way help themselves out of poverty.

Provided that the people in the country are willing to work in poor working condition, they must organize themselves to fight the cruelties and repression that they receive from their employers. In line with this, the government must help the workers meet the legally due environment and system that they deserve (Katel, 2005). Fourth, the government must employ its citizens by doing road projects and infrastructure that would benefit the public as a whole. Roads are the most important way to connect people from different places and to make distribution of resources easier, faster and more convenient.

The workers in this case should be given minimum wage; this would help fuel the economy far better (Lee, 2002). The workers would buy more if they have more income, some would be able to save more for future use. Industries would also run its gears since there would be more demands from the consumers (Lee, 2002). The government would also benefit from more taxes. More government money can be use to further improve international relations and could be use to increase the minimum wage of the public sector.

Increasing the minimum wage in the public sector will help boost the economy since the workers would be willing to work in government agencies and projects (Katel, 2005). Helping the economy to move and circulate is a priority that the government must take in able to reduce poverty. Increasing the minimum wage would not affect the people in poverty as have been discussed (Katel, 2005). Changes in wages have a minimum effect on the level of poverty that the country have been experiencing, thus it is not a good idea to increase minimum wages in Honduras (Gindling & Terrell, 2006)..

The minimum wage in Honduras better stay as it is today. A better economic tool that can be use would be creating public projects in which both the general public and the private sectors could participate. Increasing the possibility of legal means of migration would also be another top priority, since it is very hard for a country like Honduras to attract foreign investors. If the minimum wage in Honduras shall increase, it should do so in only small portion so as not to affect the labor market structure.

According to Gindling and Terrell, in the span of 2001-2004 the minimum wage in Honduras rose of about 10.9% with the extreme poverty falling 2%. However, this is not sufficient evidence that the reduction of poverty is due to the increase in minimum wage but rather on other more popular ways that the people take such as immigration which bring forth more and more foreign remittances (Gindling & Terrell, 2004).

Works Cited