The probability to be employed along with the changes in the number of working hours was also explored in the studies mentioned above. The Arango and Pachon study in 2004, found that there is a reduction in the probability of household heads to be employed when minimum wage was increased. Irrespective of this, the probability of non-heads being employed increase (Gindling & Terrell, 2006 pages 9-14). The studies provide evidences that show that there is a negative relationship between poverty and increase in minimum wage, especially on the country level data’s.
Micro-level data on the other hand provides a view regarding the family structure and household responses to the increase in minimum wage (Gindling & Terrell, 2006, pages 9-14). Honduras: In Focus Honduras is a country in Central America which is considered as a developing country. It has a struggling economy, with an annual Gross Domestic Product of US$2,900 as of 2006. Its great majority is composed of the poor with the distribution of income controlled by a few. The wage is very low, with only $160 per month. Most of the people are dependent on the remittances that come from the illegal immigrants that go in the United States.
Most people in Honduras works in the textile industry earning the minimum wage, under poor conditions (U. S. Department of State, 2007 page 1). It is said that about two-thirds of the people living in Honduras are living in poverty according to state. gov. 3. 2% of its GDP is attributed to Services, 18% on the Manufacturing industry and the remaining 14% to agriculture (U. S. Department of State, 2007 page 1). The management in Honduras are said to impose overtime work to their employees. Refusing this policy would result to three days no pay suspension.
Practically, it would be very difficult if not impossible to refuse doing overtime work. Because of this situation mothers are forced to live their children to their relatives. If one would refuse or would not be able to attend overtime, the person would be under an eight day, no pay, suspension (Lee, 2002, page 1). The factories in Honduras also have poor working condition and poor ventilation systems. In one factory, there is even no available pure drinking water. There are even incidents of maltreatments. Although the law permits workers to create unions and rally, there are reports that indicate employers harassing union sympathizers.
There are even numerous appeals in the Honduras labor courts concerning being fired from work because of joining the union. Forced labor is also not permitted, but as stated above, it was popularly done in most factories. Children are also permitted to work even without parental consent. The violation of Child Labor act is frequent in rural communities. There are approximately 350,000 child workers in Honduras (U. S. Department of State, 2007, page 1). There are several increases in the minimum wage of Honduras, currently; the minimum wage is set at US$2.
12 a day for those working in the agricultural sector while the highest would be US$ 3. 47 per day (U. S. Department of State, 2007, page 1). Workers shall only work for only 44 hours per week, must have 10 days paid vacation per years however this were disregarded by most employees and workers are not given a chance to complain because of the high demand for job. (National Economies Encyclopedia) The scenario above shows that the laws in Honduras are not properly being implemented. This indicates that the working condition and environment in Honduras is indeed very low.
This might be a good environment for investors but it definitely degrades the welfare of the workers. However, it seems that there are not much foreign investors who are interested in the country. This might be rooted from the inability of the government to implement laws which make the economy shaky and make the investors scared to spend or put up their investment. Minimum wage and Honduras In the research conducted by Gindling and Terrell, they have found out that ever since Honduras had legislated minimum wage laws, they have been able to set up to about 22 minimum wages.
The minimum wage was being change on the rate of twice every year. The minimum wage that applies to bigger firms is about 27% higher than those that belong to the much smaller firms. However the rapidity of increase in smaller firms is 3% faster or greater than those of the larger ones (Gindling & Terrell, 2006 pages 5-9). In the data’s gathered by the PHSMP, otherwise known as the Permanent Household Surveys for Multiple Purposes plotted in a graph that was use by Gindling and Terrell, it shows that Honduras has been stable as of 1999.