Just Wage vs Capitalism

[aball1035]

I’ve recently heard that in the middle ages they didn’t have capitalism as it’s seen today. They had a “just wage” system? Can anybody tell me about the history of it?

 

[mrphilosophias]

After much thinking I realized that the only thing equal among all makind is that we are born of women, and naked. We all have the same legitimate needs. When i tried figuring out why all the socioetal woes I realized its money and greed, which really boils down to pride and sin.

Before this would ever work however we need to prioritize our economy in such a way as to provide a sufficient supply of those resources which are necessary to fulfil the needs of all who participate. Only after there is a sufficient, efficient and affordable mechanism for meeting the needs of all should we even begin to worry about producing trivial plastic trinkets and luxories. However our economy would be better directed if we aimed the excess productivity of the work force toward making the world a better place for our children, through research, tech, education, etc, then spent waging war, which has become a wastebasket of innocent human life and precious resources.

If (MW*FT)<Cost to fulfil basic needs, then it is the case that the wage is unfair.

mw=minimum wage
ft=full time work week

if you wanted to find a just wage, and to solve many of the problem we have then you have to take the power to print money away from the banks (federal reserve isn’t what you think it is) and put it back in the hand of the Congress. Then one would simply create a reasonable and accurate cost of living index and divide the cost of living for a week by whatever full time is define as. This would result in an increase in wage and a revaluation of the dollar. This would put an economic burden on business owners and employers, and so congress could then print the necessary legal tender to cover the adjustment. This would just be a minimum standard of living so even people working ‘menial’ jobs would have sufficient income to survive, but would obviously raise in proportion to skill, experience, etc.

Time could be used to back the currency as our time is worth more than silver or gold, and since it is all monopoly money anyway we can says its worth productivity/time or cost of living/time.

just some ideas ive brewed up based on inherent human dignity

 

[Julian0404]

I’ve recently heard that in the middle ages they didn’t have capitalism as it’s seen today. They had a “just wage” system? Can anybody tell me about the history of it?

See and read Pope Leo XIII

 

[JimG]

The Middle Ages comprises about a thousand years from the Fall of Rome in 476 to the beginning of the early modern age around 1500. It’s divided into a least three major sub-eras, and of course, the history of life during that period varies considerably from century to century, and place to place. The social / economic conditions include both feudalism and mercantilism. It would be a mistake to generalize about just wages as characterizing the extended period.

 

[tafan]

I am sure what you heard about was the guild system in the cities. It existed a very long time and was very practical. So I would take exception to the statement made above that it could not apply to all of the middle ages. I am pretty sure the trade guilds started as part of the Roman Empire. Remnants of it lasts today, but a competitive marketplace drove out many of its functions by the 17th and 18th century in most places. The Guild system was not captialism, that is an important point. You had no free market place for services, nor did you typically have any division of labor and capital. But it did require a rather ordered society which Christendom supplied. Would be great to bring it back today for many of our local services.

The guild system applied to most non peasants. For example, to be a blacksmith in a city or town, you had to belong to the blacksmith guild. They controlled how many were in the town, so as to not have an over supply. Prices for goods or services, in general were not competitively set, but were set by the guild. So competition was mainly based on quality of work instead of price. They made sure prices were high enough so that a blacksmith could earn a living, but also so that the services could be afforded by the public. Members were typically required to take apprentices. If someone got hurt or injured, the guild is who supported the family until he went back to work. The guilds would also supply credit to each other when needed, at no interest of course.

I do not think people like inn-keepers or merchants were members of guilds (I could be wrong about that), but all craftsmen were. Leatherworkers, carpenters, blacksmiths, etc.

This is a simplistic explanation, this wikipedia article looks pretty accurate:

en.wikipedia.org/wiki/Guild

 

[JimG]

Here are a couple of other sources with respect to medieval economic systems:

Medieval economic sourcebook

Medieval economic thought

 

[GratefulFred]

If (MW*FT)<Cost to fulfil basic needs, then it is the case that the wage is unfair.

mw=minimum wage
ft=full time work week

Should the wage for a particular job be determined by the value of THAT job or by the basic needs of the worker?

How do we fairly define the Cost of Basic Needs? An 800 sq ft apartment or an 1,600 sq ft home?

If my wife also works and together we cover more than our basic needs, should I be paid less so my co-worker can be paid more? If she does not work, should I be paid more?

Also, in simple terms, Revenue minus Cost of Goods Sold = Profit.

Cost of Goods Sold includes the product itself, LABOR, and the facility where goods are made and sold, liability insurance, and taxes.

If I do not make a profit, I am in danger of going out of business and my workers would lose their jobs. Many jobs have gone overseas because US Labor costs are too high to ensure goods can be sold at price customers will pay and still make a reasonable profit.

Will a college educated computer programmer be willing to be paid less so a high school drop out maintenance man can make more?

Setting a Just Wage is complex process.

 

[JimG]

I’m trying to recall the encyclical Rerum Novarum, on capital and labor. If I recall correctly, Leo XIII (this was in 1891) made reference not to a just wage but to a living wage. A living wage was one that would be sufficient to support a wife and family.

Of course, in a society where both parents are commonly employed outside the home, that idea has already been lost. Because a living wage, in the sense of a wage sufficient for one breadwinner to support a family, is undermined if such one-earner families are a only small minority.

 

[centurionguard]

I’m trying to recall the encyclical Rerum Novarum, on capital and labor. If I recall correctly, Leo XIII (this was in 1891) made reference not to a just wage but to a living wage. A living wage was one that would be sufficient to support a wife and family.

Of course, in a society where both parents are commonly employed outside the home, that idea has already been lost. Because a living wage, in the sense of a wage sufficient for one breadwinner to support a family, is undermined if such one-earner families are a only small minority.

A living wage was one that would be sufficient to support a wife and family.

In a democratic society today what governmental society has defined what is classified as Living Wage is actually Poverty Level.

Not sure what is described as poverty annual income in the U.S. but here in Canada any annual gross salary before taxes under $27,000 is classified as people living in poverty.

Net income after taxes with a $27,000 annual salary would be in the ballpark between $22,000 and $23,000 less for a single person and marginally more for a married couple making the same income.

 

[Ridgerunner]

In a democratic society today what governmental society has defined what is classified as Living Wage is actually Poverty Level.

Not sure what is described as poverty annual income in the U.S. but here in Canada any annual gross salary before taxes under $27,000 is classified as people living in poverty.

Poverty level, too, is relative. Poverty in the U.S. is a far cry from what poverty is in Haiti.

Also, “poverty” depends on a lot of things. Not all resources can be measured in money or the same standard applied everywhere or to everyone. I have to think (as one example) of the young men who lug feed at the feed store I go to. Very hard work, and the pay isn’t very much at all. But they’re the ones who haunt to the country cattle auctions, buying baby calves for next to nothing, to raise. Renting land is cheap, but the labor involved is high. Their objective is to gain equity in their cattle, and then, ultimately, in land. And they do pretty well at that.

These poultry farmers might owe two million dollars and not net much more than $27,000 starting out. But they can end up being multi-millionaires, and many do.

Fellow next door to my daughter and son-in-law. He is almost certainly “poverty level”, but his wife inherited their house from her parents. He keeps it in good condition. They both garden. He knows where every good deal is on the face of the earth, including the poultry processor “factory stores”. He knows farmers and cooperatively raises a hog now and then. They live very well by almost every measure except silly consumer goods, and they even have some of those. He built a pickup for his teenage son, virtually from scratch; old parts and newer parts. If he paid $200 for it to start with, I would be surprised.

I know a guy on SSI who rents a country farm house for next to nothing and yet lives surprisingly well. He does have an advantage. He can cook very, very well, particularly wild game. Neighbors bring stuff to him to cook and, of course, he gets his share. Well, he raises beagles, rabbit dogs, and sells some now and then. Yes, he probably poaches a bit, but one doesn’t ask. He picks berries and makes his own wine. It’s good, too.

But, yes, I imagine if one lived in NYC and made $27,000, and had no advantages otherwise, and no prospects, life could be grim.

 

[Ridgerunner]

I am sure what you heard about was the guild system in the cities. It existed a very long time and was very practical. So I would take exception to the statement made above that it could not apply to all of the middle ages. I am pretty sure the trade guilds started as part of the Roman Empire. Remnants of it lasts today, but a competitive marketplace drove out many of its functions by the 17th and 18th century in most places. The Guild system was not captialism, that is an important point. You had no free market place for services, nor did you typically have any division of labor and capital. But it did require a rather ordered society which Christendom supplied. Would be great to bring it back today for many of our local services.

The guild system applied to most non peasants. For example, to be a blacksmith in a city or town, you had to belong to the blacksmith guild. They controlled how many were in the town, so as to not have an over supply. Prices for goods or services, in general were not competitively set, but were set by the guild. So competition was mainly based on quality of work instead of price. They made sure prices were high enough so that a blacksmith could earn a living, but also so that the services could be afforded by the public. Members were typically required to take apprentices. If someone got hurt or injured, the guild is who supported the family until he went back to work. The guilds would also supply credit to each other when needed, at no interest of course.

I do not think people like inn-keepers or merchants were members of guilds (I could be wrong about that), but all craftsmen were. Leatherworkers, carpenters, blacksmiths, etc.

This is a simplistic explanation, this wikipedia article looks pretty accurate:

en.wikipedia.org/wiki/Guild

I do not particularly question that the guild system had a lot of good things to it. But apprenticeship was very, very hard, if the accounts are to be credited. And then too, wars were fought over “turf”. The Hanseatic League was, as near as I can tell, just one huge guild. But it didn’t hesitate to war for territory, fishing rights, and so on. It wasn’t all roses and clover.

 

[Brendan]

If (MW*FT)<Cost to fulfil basic needs, then it is the case that the wage is unfair.

mw=minimum wage
ft=full time work week

Let’s say that a business have two employees, both equally skilled and qualified. They are paid the same amount.

For the first employee, he is a single man who lives in an apartment.

The second employee is married with 4 kids.

If the amount I pay is sufficent to fulfil the basic needs of the first man, but not the second, is the wage being paid a just one or not?

Or would the employer be morally required to pay the married man more than the unmarried man for the same work?

 

[centurionguard]

Ridgerunner:

Poverty level, too, is relative. Poverty in the U.S. is a far cry from what poverty is in Haiti.

Also, “poverty” depends on a lot of things. Not all resources can be measured in money or the same standard applied everywhere or to everyone.

True; and not to advocate what I’m about to say as a general rule but I think if we have the eyes enough to see in our own respective countries, there are citizens living in poverty that could be classified at the same level as people living in Haiti. Again; this it not a general rule but I do think if one has eyes that are not biased you’ll find such people living in destitution in our very mist around us, in our own cities.

 

[GratefulFred]

Did some checking. The following numbers are rounded just for discussion.

For an American family of 4, the poverty level is $22,000. With the standard deduction and personal exemptions, there is no Federal income tax due on incomes below $26,000 for that family of 4. But Social Security and Medicare (FICA) tax is 7.65%.

In California, Min Wage is $8 per hour. To earn $22,000 a year at min wage, one has to work 53 hours in each of the 52 weeks in that year.

$22,000 less 7.65% FICA is $1,700 a month for a family of 4. Realistically, how much can they pay for food, clothing, housing (rent and utilities), medical, transportation, personal care, etc?

It is very hard for me to think that the Poverty Level is a living wage.

In Rerum Novarum Pope Leo taught that everyone is entilted to the fruits of his labor. If one is able to earn more, he has a right to it. His heirs have a right to what he leaves.

But Pope Leo also taught that each of us is responsible for how we use our earnings. It is immoral for an owner to become very rich while paying his workers less than a living wage.

The US and State governments set the minimum wage. Individuals then bargain for wages above the minimum, or move to better paying jobs.

Often forgotten in the discussion of a just wage is the individual’s responsibility to acquire a decent education and job skills. Whether one earns $8 or $80 an hour depends on one’s education and job skills. If we follow God’s Commandment to Love, we will encourage (demand) that our children get a decent high school education. But 25% to 30% do not get that diploma.

 

[Monte_RCMS]

Seems that there is a disconnect between the title of the thread and the original post.

And all of the posts except one have wandered WAY off topic.

And, of course, there is a difference between European Capitalism and American Capitalism.

And, of course, there is a difference between basic needs and high productivity.

And, of course, there is a difference between charity and entitlements.

Seems to me that the basic issue in this thread and the way it is “evolving” relates to present day United States economic development versus what went on in Europe a thousand years ago.

 

[JimG]

Let’s say that a business have two employees, both equally skilled and qualified. They are paid the same amount.

For the first employee, he is a single man who lives in an apartment.

The second employee is married with 4 kids.

If the amount I pay is sufficent to fulfil the basic needs of the first man, but not the second, is the wage being paid a just one or not?

Or would the employer be morally required to pay the married man more than the unmarried man for the same work?

In the first professional job I ever had, it was company policy to start married employees at a slightly higher rate than single employees, because they had a family to support. That would be illegal today, but it was sort of in line with Leo XIII’s idea of a living wage.

 

[Monte_RCMS]

There is also an issue with … don’t know what to call it … “expectations”.

On numerous occasions, people who were not working and having severe financial distress … houses under threat of foreclosure, etc … REFUSING to take an excellent job … because they didn’t like the benefits package. No joke. And refusing to work for what they called “chump change”. It was more than what I was making by far. And I had NO benefits package. And what they turned down offered premium pay for overtime. And the work was definitely needed so they would have the best kind of job security. And it was not dangerous work … not like fishing for crab in the Bering Sea.

It’s like … gimme a break!

So, they stuck to their guns … and as far as I know, lost everything and moved in with relatives.

Hello!!!

 

[ManOnFire]

I’ve recently heard that in the middle ages they didn’t have capitalism as it’s seen today. They had a “just wage” system? Can anybody tell me about the history of it?

Basic food, basic clothing, and basic shelter are the only real necessities of life, with basic healthcare being a possible fourth. The relative interpretation of a “just wage” to pay for these is very different from those who believe they should be paid a just wage to buy a big screen TV, music and video entertainment rentals, NFL Sunday package, pimped out car, weekend drug allowance, etc. Good luck getting the closed-minded mainstream media to remind people of these very basic facts in order to free people from unreasonable expectations. Many people don’t understand that “pay me what I’m worth” is an economic fantasy. If an employee generates $70K per year in production, that person can’t be paid $70K per year because there would be $0 left over. Why would any business hire, train, and manage someone for a pay check of $0? Would you be happy if your paycheck said $0? Then why would the business owner? Worse yet, social security of 7.6%, plus unemployment comp, plus disability ins. adds up to almost 10% that shows up nowhere on the employee’s pay stubs. So there’s another almost $7K that the employer must pay to the govt. on behalf of the employee. Now the employer would be losing $7K per year by keeping the person employed. Think of all the bitterness and anxiety that occur because our education system fails to teach these basic economics of business. It’s almost as if they want to aggravate people with misunderstanding. IMAGINE how much peace could be brought to workers who understand how business works. Good luck getting the closed-minded media to enlighten and free the public from unreasonable expectations. Where are the public service announcements that would serve and free the public?

 

[aball1035]

Seems that there is a disconnect between the title of the thread and the original post.

And all of the posts except one have wandered WAY off topic.

And, of course, there is a difference between European Capitalism and American Capitalism.

And, of course, there is a difference between basic needs and high productivity.

And, of course, there is a difference between charity and entitlements.

Seems to me that the basic issue in this thread and the way it is “evolving” relates to present day United States economic development versus what went on in Europe a thousand years ago.

Well do you think that the just wage system is better or worse than capitalism?

 

[JimG]

Well do you think that the just wage system is better or worse than capitalism?

It’s not a question of better or worse. A capitalist system might better generate the income needed to be able to pay a just wage.

But whether one lives in a capitalist system, a socialist system, or a guild system, the guild, or the company, or the government must first be able to generate enough income to be able to pay workers a just wage. And of course the allocation of income is determined in a different manner in each of those systems.