Economics, Management and Sustainability (Nov 2024)
A global minimum wage formula as a proactive measure for climate migration
Abstract
On February 14, 2023, United Nations Secretary-General Antonio Guterres spoke to a global audience, stating, "The world will witness a mass exodus of entire populations on a biblical scale." Purpose: This paper proposes a global minimum wage formula tied to local rent prices as a proactive measure to strategically incentivize populations to migrate away from coastal areas threatened by climate change. Methodology: The author employs a theoretical approach, utilizing economic principles and financial literacy practices to develop a scaffolded, multi-year plan for implementing a global minimum wage formula. As this is a theoretical paper, there are no experiments or empirical results to evaluate. Results: The proposed global minimum wage formula, based on a 'Recent and Relevant Rent Price Index' (3RPI), is designed to anchor wages to a rent-price index, allowing laborers to afford housing on 30% of their wages. This formula is expected to incentivize migration inland, spur entrepreneurism, and increase local tax bases. Theoretical contribution: This paper contributes to climate change adaptation by proposing an economic solution to manage the anticipated mass migration due to rising sea levels and coastal erosion. It highlights the potential of market-driven measures to mitigate the economic shocks associated with climate change-induced migration. Practical implications: Implementing the proposed global minimum wage formula could help governments proactively manage climate change-induced migration's economic and social impacts. It may also contribute to funding the annual $2.4 trillion gap for addressing climate change, as described by the United Nations, by temporarily increasing discretionary funds and tax bases. Sustainable Development Goals (SDGs): SDG 10: Reduced Inequalities; SDG 13: Climate Action; SDG 11: Sustainable Cities and Communities; SDG 1: No Poverty
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