Minimum Wage System and Poverty: A Study on Royal Dutch Shell

Research Project

Executive Summary
The present report is based on determining the system of minimum wage that traps the
workers in facing poverty specifically in Royal Dutch Shell Company. The study provides a
deeper insight relating the review and important aspects attached with the problem. It also
provides for different methods that could be used for making the study more as reliable and
valid.

Table of Content
Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
Literature review..............................................................................................................................5
Research methodology.....................................................................................................................7
Data Analysis and Findings.............................................................................................................9
Discussion......................................................................................................................................14
Conclusion and Recommendations................................................................................................17
Reflection.......................................................................................................................................19
REFERENCES..............................................................................................................................20
Appendix........................................................................................................................................22

INTRODUCTION
The current study will focus on the working of Royal Dutch Shell and on the concept of
minimum wage system and how it draws people towards the poverty line.
Aims and objectives
Aim
“To examine the concept of minimum wage and how it traps people in the poverty: A study on
Royal Dutch shell.”
Research objectives
 To articulate the key concept of the equality and diversity attached with equal wage to
workers within the work environment.
 To study the concept of minimum wage rate within the business.
 To critically evaluate the way in whichleast wage traps the people into poverty.
 To facilitateappropriate recommendation for improve concept of wage & alleviating
poverty.
Research Questions
 What isthe concept of equality & diversity associated toproviding equal amount of wages
to employees in the workplace?
 What is the meaning of minimum wage in an enterprise?
 How minimum wage traps the people into poverty?
 What are better suggestions for improving concept of wage & alleviating poverty?

Literature review
Theme 1: Concept of diversity and equality at business premises
In accordance to Simonin and et.al. (2017), equality and the diversity are different
concepts that play a crucial role in the business organization and affects the smooth functioning
of business. Equality is the concept which as ensuring that each and every person in the company
has equal opportunity & must not be treated as discriminated or differently due to their features
or traits. On the other hand diversity relates to taking an account of differences between group of
the people & individual along with it placing positive value on such differences. It reflects that
all the workers need to be treated fair and equal y giving them with same set of the opportunities
irrespective of their age, sexuality, gender, culture, race and disability. Proving the employees
with fair wages would help the company in avoiding the trap for their workers due to wage
difference so that they might not be facing poverty condition in any case. Thus, it is very
important for the business concern to promote equality of an opportunity for all the employees
by way of diversity which depicts that giving equal chance to every person for the purpose of
achieving their best potential and preventing them from the poverty because of unequal wage. In
today’s dynamic environment all the firms are been encouraged in having their equal
employment policies which helps in protecting an individual rights of an employee whereas
ensuring the employers to stay on right side of law. This kind of policy is been designed for
preventing employment related disputes and an equal opportunity guidelineswhich helps in
ensuring that female workers must be offered same job as the male employees are been paid.
Theme 2: Stating minimum wage rate system in business
In view of Barrett, Garg and McBride (2016) minimum or least amount of wage policy
reveals that minimum value of the remuneration that employers is needed for paying the wage
earners with respect to work performed at a given point of time that could not be reduced
through collective agreement or individual contract. The main purpose or objective of the
minimum wage amount is introduced to protect the workers against lower pay. They helps in
ensuing equitable & just share of fruits of the progress for all and minimum living amount of
wage to all the individuals who are recruited and needs such protection. It can also be a
component of the policy in order to overcome the poverty and in reducing differences in terms of
men as well as women. This system need to be defined and set in a manner for reinforcing &
supplementing other kind of employment and social rule with an inclusion of collective
bargaining that in turn used for setting employment terms and the working conditions. As per
ILO convention, it is essential that minimum wage must be specific regarding elements of wage
that could be counted as minimum, conditions and an extent under which payment in form of
kind could be allowed.
Theme 3: Evaluating the way in which minimum wage rate traps the people in poverty

It is been argued by Chakraborty and Chakraborty (2018) that minimum wages must be
subsidized for encouragingsocial integration by way of employing at least skilled employees
with respect to decreased demand for unskilled workers. Subsidizing companies which contracts
with the workers whose wages falls below certain level has recommended as one of the major
mechanism in protecting an income from poor. There are several problems attached with the
subsidizing entities for the purpose of increasing employment or supporting income of poor
workers. Besides difficult for monitoring, subsidizes might also generate the poverty traps as it
reduces an incentive for workers and firms for raising wages & productivity above a threshold
level. However, wage subsidies might be used on temporary basis with above effect; it deemed
that the social welfare encourages workforce participation that might turn out as detrimental to
the minimum wage earners in long run. The idea behind subsidizing work might imply that work
performed resulted as invaluable. On other side, this puts a downward pressure on non-
subsidized part of minimum wages with an effect that minimum wage might become maximum
wage.