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Responding to Hafiz Noor Shams on Minimum Wage
May 7, 2012 by Ahmad Fuad Rahmat
Hafiz Noor Shams responded again. Here is my take on it:
1. First, he misrepresented my position again. I did not say that a minimum wage isthe only primary cause of workers participating in an underground economy. There are more structural reasons as to why people become desperate to the point of working illegally and / or with little job security.
My position has been simple all along: while the process of adjusting to a minimum wage law could realistically see a lot of resistance from businesses – making them more reluctant to hire at minimum wage – it does not negate the virtue of the law itself.
Changes will always be met with some resistance. The goal, in good conscience, would not be to avoid the law just because it is a hassle to many, but to ensure that the law embodies a principle that is just. My claim in support of the minimum wage law, first and foremost is moral.
The point is that laws must be designed with an acute awareness of need to protect the vulnerable.
In the case of commerce, the fact that wage laborers have to compete with one another, in a milieu that gets more insecure as the economy slumps further puts them in a very vulnerable place in the profit-seeking process. A minimum wage policy is one of such measures that should be undertaken to ensure that they are less vulnerable. This is why I propose that businesses, especially well profiting ones, have the bigger burden of being subjected to the law for labor malpractice.
No one ever said that a minimum wage policy is the be all and all of worker’s rights but, based on the reasons I gave, having a minimum wage policy is more humane than not having one.
It is also simply not true, as Hafiz Nor Shams, claimed again and again, that a minimum wage generalizes everybody, everywhere, everytime in the economy. A minimum wage policy can differ based on sectors, regions and union participation and demands in policy.
2. But Hafiz Shams goes further in saying that the effects of the law, in making many turn to a black market economy is also undesirable. Workers in a black market economy are routinely denied a full salary often on questionable pretexts that their less than honest employers will often concoct. Being illegal – since the workers agreed to work beneath the minimum wage law that their employers were not willing to pay – the workers have nowhere to turn to to complain or seek compensation for any damages they encounter at their workplace. In some cases this can even lead to oppressive slave labor.
The point Hafiz Noor Shams eventually makes here is that the pro minimum wage camp’s concern for workers rights is contradictory, given that reality.
So what does Hafiz Nor Shams propose? Abolish minimum wage laws so that none of the workers working in a black market economy will be deemed illegal and therefore will have more recourse and protection.
The problem – and I said this before but I’ll repeat it because Hafiz Noor Shams couldn’t get it the first and second time – is that this does not solve the problem that a minimum wage aims to solve and that is to secure decent wages for the worker. Hafiz Noor Shams is proposing an answer to a question that the minimum wage law camp is not even asking.
The solution, as I also said before, is tougher regulation on businesses. This can take many forms: for one, keep the minimum wage law, establish institutions that are designed to take care of the workers needs and concerns with regards to their employers, encourage unions and so forth. The state, in other words, is to ensure that businesses abide by comprehensive labor laws while they do as much as they can to protect the working poor.
My point is that having laws to ensure that workers are not deprived of their take home wages does not contradict a minimum wage law. Hafiz Noor Shams’ lack of imagination concludes one can only either have a minimum wage law or no laws that protect workers in a black market economy at all. I argued in essence that it is not an either-or dilemma so long as the interests and welfare of workers, given their vulnerable status in any profit-driven enterprise, is protected and taken care of. No one ever said that a minimum wage policy is the be all and all of worker’s rights.
Hafiz Nor Shams also thinks that that removing a minimum wage law will solve a lot of the problems he mentioned, namely wage denial. Had he been more familiar with the rate of exploitation that’s been occcuring in Malaysia, he would’ve known that workers, especially migrant workers, even if they are here legally, have faced the risk, if not experienced that brunt of slave labor and wage denial way before the minimum wage law was announced. How much of their cause did IDEAS take up?
Slavery and oppression are complex, structural phenomena that have causes beyond and before the introduction of a minimum wage law, but strangely (or perhaps not so strangely) it is only after that law was introduced that we find the libertarians at IDEAS suddenly so concerned about workers’ safety and welfare, often to the point of going against the demands of workers themselves.
3. I also did not say that the efficient wage is the exact equivalent of the minimum wage. Nor did I say that the differences between them do not matter. My claims were simply as follows:
I) He wrongfully assumed that an author I cited to make a point about minimum wages was talking about efficient wages.
II) The underlying difference in our disagreement is the extent to which the govt can play a role in securing decent wages for workers. By showing that efficient wages can be secured by corporations, Hafiz Noor Shams could argue against the claim that a minimum wage law would be the more suitable way workers can attain decent wages. I of course disagree and I highlighted this to show how the disagreement is rooted to a larger ideological differences, namely in the relationship between the state and commerce. I note the difference but not in the way Hafiz Nor Shams wanted me to.
This brings me to the bigger point that I was making which Hafiz Noor Shams also misunderstood:
III) there are overlaps in moral arguments made in favor of efficient and minimum wages, especially as they relate to workers’ productivity. In other words, at the end of the day the amount of wages a worker ought to get (minimum, efficient or otherwise) the question of giving a person what is due can only be answered via moral reasoning, what is right, wrong, what ought to be etc, however implicitly.
Hafiz Shams took this to somehow mean that I “dismiss” the differences between efficient and minimum wages (another deliberate misrepresentation of my argument on his part).
4. Anyway, it is on that third point that Hafiz Noor Shams contradicts himself. He insists that in economics “questions on morality only take place in private discussions” and yet recall that it was precisely for moral reasons that he rejects minimum wage laws, since it leads workers to black market labor which exposes them to the risk of slave labor and oppression.
One cannot deem something oppressive without a normative foundation. One cannot even be a libertarian economist without appealing to some normative foundation. The fact-value distinction cannot withhold epistemological scrutiny. Hafiz Noor Shams wants to have his cake and eat it too: moralize when it suits his purpose and claim that morality has nothing to do with economics when he feels like it shouldn’t.
His response would be to say something to the effect that he was referring to economics as it has been studied recently in academia. This is a moot point because – and I’ve said this repeatedly over the course of our exchange – the demand for minimum wage laws is always already an ethical demand.
That is unless one wants to be a strict textbook literalist and view an issue as moral only when the words morality or ethics are used in it. I’m sure Hafiz Nor Shams can afford more nuance than that.
5. Or probably not. Hafiz Noor Shams’ response ended on a rather sad note, as we find him scraping through a paraphrase I made.
Malaysian Employers Federation executive director Shamsuddin Bardan said that a minimum wage of RM 800 in Sabah would double the wages of some plantation workers. I paraphrased by saying that it is widely understood that many plantation workers are being paid RM 400 a month. This figure was also something I heard from reliable activist friends, which was also why I took the liberty to cite it in my initial article. I perhaps appeared too cavalier in my use of the phrase “widely understood” but Hafiz Nor Shams’ eagerness to magnify it is quite pitiful. Talk about overreaching.
Hafiz Noor Shams appears to have forgotten how it happens to be the case that we do not always express ourselves with the full clarity our ideas deserve, just like when someone can say “black market” but mean something so much narrower that it was best for the sake of clarity to use a different word in the first place.
6. All this does not hide the fact that Hafiz Noor Shams continues to avoid the real issue at stake, which is the extent to which the Malaysian working poor – with little union representation, political attention, low wages and increasing competition from foreign labor – struggle in the current economic climate. He wrongfully accuses me of ignoring his points, but he is blatantly ignoring a fundamental reason why people are demanding minimum wages to begin with.
7. His refusal to address the real hardship of Malaysia’s working poor probably explains his insistence that the classist claim that a minimum wage reduces productivity is not an argument from the anti-minimum wage camp, and at best a straw man. He does not answer why it is a straw man, indeed he refused to engage with it on the basis he had somehow not encountered the argument in his years of studies (and he talks about his years of studies overseas a lot).
I personally have encountered that argument in discussions about the minimum wage and class politics in general but what is perhaps the most evident reflection of Hafiz Noor Shams’ attitude as an interlocutor is that no argument can be included in the discussion until he has encountered it before. It’s as if he holds the key to the canon.
Had Hafiz Noor Shams read any theoretical literature on oppression, he would know that the issue of class oppression extends beyond arguments about particular policies. It is fundamentally about unequal structures of power that harms the vulnerable in society. In this, the myth that workers should not get any favors (such as a minimum wage) but should work hard to earn their success is evoked constantly to justify economic inequalities by the rich and powerful.
The fact that I have to spell this out makes it clear that Hafiz Noor Shams does not understand what oppression and freedom mean.
8. Lastly Hafiz Noor Shams says: “with minimum wage in a downturn workers can lose their jobs altogether.” True, but given the world economy as it is now, whose fault would that be, exactly? Why do workers have to pay the price? He again avoids the moral question.
Hafiz Noor Shams likes to nitpick on how statements can be read but does not want to deal with structural issues.
9. Hafiz Noor Shams wrote in such longwinded self-indulgent prose that he missed many of my points in the process. He highlighted details that do not matter, while ignoring completely issues that do. So he mentioned absolutely nothing about the conditions of the working poor in Malaysia and the meaning of development – the crux of my case in the first place – while nagging about how “widely understood” should be used and how efficient and minimum wages are different – when I never said they were not. He wrote, in other words, as if he was talking to himself.
By the end of it we find nothing more than a tedious and unoriginal ad hominem laced with economic jargon.