Just Wage vs Capitalism

[Ridgerunner]

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.

Paying more to the person who is supporting a family is capitalistic. It’s the free choice of the employer, and it really was common once, though it’s illegal now. Requiring equal pay for all doing the same thing, is not capitalistic. So, it seems Pope Leo’s exhortation of employers to pay a “living wage” based on the individual’s ability to support a family, is more in line with capitalism than what we have now. There really is no concept of a 'living wage" in the current regulatory system. Interesting that individuals were often willing to provide it while government is unwilling to allow it.

 

[Newbie2]

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.

Indeed.

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?

One thing to bear in mind is that a “just” wage is an ideal; that ideally the breadwinner for a family can support his (or her) family on what they make. However, some jobs just don’t pay enough to support a family, perhaps depending on the size of the family.

Not to mention that there are jobs that will never pay enough to support a family i.e. clerk at a 7-11.

The idea of the just wage has to do more with the employer not taking advantage of workers i.e. paying them resonably for the worth of their work to the business.

I just read about a city bus driver in Lansing Michigan who made…wait for it…$140K last year, working an ungodly amount of overtime. Interesting case from a moral perspective; if another driver (maybe two) would be hired to do the work that this guy got in overtime, one or two more people would be employed and the City, which is broke, would save money.

Apparently this guy worked 80+ hours a week (or at least was paid for that amount of time). Have to admire his work ethic, provided he really was working for all that pay and not finding a way to work the system…although finding a way to make 140K in a year as a city bus driver presupposes “working the system”, methinks.

 

[tafan]

One thing to bear in mind is that a “just” wage is an ideal; that ideally the breadwinner for a family can support his (or her) family on what they make. However, some jobs just don’t pay enough to support a family, perhaps depending on the size of the family.

Not to mention that there are jobs that will never pay enough to support a family i.e. clerk at a 7-11.

The idea of the just wage has to do more with the employer not taking advantage of workers i.e. paying them resonably for the worth of their work to the business.

.

Unfortunately, the way our modern economy works, your point seems logical. But it is not in line with Catholic social justice teaching. Yes, some jobs require more skill and will always be worth more to an employer. No one says that the market place plays no role in defining wages. But a just wage is a living wage, period. If a business cannot justify paying its workers a living wage, then it really should not exist. If people took that attitude, then the market would actually work better.

In the great words of Leo XIII in his wonderful encyclical Rerum Novarum

“Doubtless, before deciding whether wages axe fair, many things have to be considered; but wealthy owners and all masters of labor should be mindful of this - that to exercise pressure upon the indigent and the destitute for the sake of gain, and to gather one’s profit out of the need of another, is condemned by all laws, human and divine. To defraud any one of wages that are his due is a great crime which cries to the avenging anger of Heaven”

…

“Now, were we to consider labor merely in so far as it is personal, doubtless it would be within the workman’s right to accept any rate of wages whatsoever; for in the same way as he is free to work or not, so is he free to accept a small wage or even none at all. But our conclusion must be very different if, together with the personal element in a man’s work, we consider the fact that work is also necessary for him to live: these two aspects of his work are separable in thought, but not in reality. The preservation of life is the bounden duty of one and all, and to be wanting therein is a crime. It necessarily follows that each one has a natural right to procure what is required in order to live, and the poor can procure that in no other way than by what they can earn through their work”
…

“Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner”
…

"If a workman’s wages be sufficient to enable him comfortably to support himself, his wife, and his children, he will find it easy, if he be a sensible man, to practice thrift, and he will not fail, by cutting down expenses, to put by some little savings and thus secure a modest source of income. Nature itself would urge him to this. We have seen that this great labor question cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners. "

 

[Monte_RCMS]

If someone works as a clerk at the local 7-11 and wants to earn enough money to be able to support a family and buy a house, then that person needs to get a higher paying job OR start a business OR get education and training that would allow himself or herself to move up. Perhaps moving up to a manager position at 7-11.

But just because an employee in a low-paid position wants to marry, have a family and buy a house, does not automatically mean the employer must raise that person’s pay … in other words, not justification for simply raising one person’s pay while not also raising everyone else’s pay.

It gets back to the issue of “expectations” … and that’s why people make strenuous efforts to improve themselves and move up.

At the very least, the employee needs to ask his boss, what can he (or she) to to get a position with more money.

I met a guy once who was a senior manager; he once had been a supervisor and his boss said he would never get ahead in that company and to change companies. So the guy changed companies and was now a senior manager and his old boss stayed at the original company and was only a junior manager.

 

[ignatius777]

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?

Great question. Should a “just” wage be equivelant to the amount of work perfomed or the amount of bills someone incurs? If I own a business and someone has a 20 room house and 4 cars why should I take that into consideration if he is performs the same duties as a guy living in a tent?

 

[Newbie2]

Unfortunately, the way our modern economy works, your point seems logical. But it is not in line with Catholic social justice teaching. Yes, some jobs require more skill and will always be worth more to an employer. No one says that the market place plays no role in defining wages. But a just wage is a living wage, period. If a business cannot justify paying its workers a living wage, then it really should not exist. If people took that attitude, then the market would actually work better.

What part of my post is not in line with Catholic Social teaching?In the great words of Leo XIII in his wonderful encyclical Rerum Novarum

“Doubtless, before deciding whether wages axe fair, many things have to be considered; but wealthy owners and all masters of labor should be mindful of this - that to exercise pressure upon the indigent and the destitute for the sake of gain, and to gather one’s profit out of the need of another, is condemned by all laws, human and divine. To defraud any one of wages that are his due is a great crime which cries to the avenging anger of Heaven”

…

“Now, were we to consider labor merely in so far as it is personal, doubtless it would be within the workman’s right to accept any rate of wages whatsoever; for in the same way as he is free to work or not, so is he free to accept a small wage or even none at all. But our conclusion must be very different if, together with the personal element in a man’s work, we consider the fact that work is also necessary for him to live: these two aspects of his work are separable in thought, but not in reality. The preservation of life is the bounden duty of one and all, and to be wanting therein is a crime. It necessarily follows that each one has a natural right to procure what is required in order to live, and the poor can procure that in no other way than by what they can earn through their work”
…

“Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner”
…

"If a workman’s wages be sufficient to enable him comfortably to support himself, his wife, and his children, he will find it easy, if he be a sensible man, to practice thrift, and he will not fail, by cutting down expenses, to put by some little savings and thus secure a modest source of income. Nature itself would urge him to this. We have seen that this great labor question cannot be solved save by assuming as a principle that private ownership must be held sacred and inviolable. The law, therefore, should favor ownership, and its policy should be to induce as many as possible of the people to become owners. "

If someone works as a clerk at the local 7-11 and wants to earn enough money to be able to support a family and buy a house, then that person needs to get a higher paying job OR start a business OR get education and training that would allow himself or herself to move up. Perhaps moving up to a manager position at 7-11.

But just because an employee in a low-paid position wants to marry, have a family and buy a house, does not automatically mean the employer must raise that person’s pay … in other words, not justification for simply raising one person’s pay while not also raising everyone else’s pay.

It gets back to the issue of “expectations” … and that’s why people make strenuous efforts to improve themselves and move up.

At the very least, the employee needs to ask his boss, what can he (or she) to to get a position with more money.

I met a guy once who was a senior manager; he once had been a supervisor and his boss said he would never get ahead in that company and to change companies. So the guy changed companies and was now a senior manager and his old boss stayed at the original company and was only a junior manager.

Exactomundo. There are jobs in our society that do not and never will be sufficient to allow a person to raise a family. Not every job is expected to be able to provide a “living wage” per Catholic teaching, otherwise it would be immoral for employers to offer part-time jobs (assuming that nearly all if not all part-time jobs do not pay a wage sufficient to support a family let alone a single person).

 

[Monte_RCMS]

Exactomundo. There are jobs in our society that do not and never will be sufficient to allow a person to raise a family. Not every job is expected to be able to provide a “living wage” per Catholic teaching, otherwise it would be immoral for employers to offer part-time jobs (assuming that nearly all if not all part-time jobs do not pay a wage sufficient to support a family let alone a single person).

My first couple of jobs were “starter jobs” … paid minimum wage, minimal benefits … there were “family men” who stayed on and got better pay and benefits but often they worked two jobs. They did not want to invest their time and money in college education or in higher degrees and were able to get by ok.

Those of us who went on to college were able to show those early jobs on our resumes for some years afterwards … some of the jobs were relevant entry level jobs and some of the jobs showed that we were not layabouts and were out there getting actual job experience … having to set an alarm clock, for one thing. One place had everyone starting at six o’clock in the morning and I had to get up at 4:30 in the morning to get there on time.

Ånd some of the places had prestigeous names … even if we were there as the lowest of the low. When asked, we would just smile and laugh and explain the job. Added a fun element to what were usually tense job interviews.

One of the entry level jobs was so good that I was able to actually teach a course in that subject after college graduation.

Still look back on all those early entry level jobs with fondness. And I include all my former associates in my prayers.

 

[tafan]

Of course starter jobs are great. That’s why federally mandated minimum wages are so dumb. There are lots of teenagers who need very little pay, but will gain a lot from the experience of working. It can be a great situation for employer and employee. Heck, I have no trouble envisioning where a just, living wage in those situations would be close to zero.

As to any job being able to support any family, that is also not the point. Certainly the head of the family has an obligation to find the best way to support his family without just saying that any job should do.

But the attitude that the market should set all wages is equally wrong. If I have two employees doing the same job with the same quality, but one has a family and one is single, it is entirely proper to pay the one with the family more. I visited with a president of one of the newer Catholic Liberal Arts colleges in this country and he told me this is exactly what they do. Even worse, they had junior professors making more money than he did, since he was older and did not need as much money.

 

[Newbie2]

Of course starter jobs are great. That’s why federally mandated minimum wages are so dumb. There are lots of teenagers who need very little pay, but will gain a lot from the experience of working. It can be a great situation for employer and employee. Heck, I have no trouble envisioning where a just, living wage in those situations would be close to zero.

As to any job being able to support any family, that is also not the point. Certainly the head of the family has an obligation to find the best way to support his family without just saying that any job should do.

But the attitude that the market should set all wages is equally wrong. If I have two employees doing the same job with the same quality, but one has a family and one is single, it is entirely proper to pay the one with the family more. I visited with a president of one of the newer Catholic Liberal Arts colleges in this country and he told me this is exactly what they do. Even worse, they had junior professors making more money than he did, since he was older and did not need as much money.

Hmmmm…I’m not quite sure about that. Perhaps with more conditions on it…

The guy with a family has one kid and the wife is able to work part time in order to help support the family without compromising home life or her child’s care. Still OK to have disparate wages?

 

[pnewton]

The guild system applied to most non peasants…

Herein is the shortcoming of the guilds, as applied today. They never helped the poor, only the middle-class, skilled workman.

 

[tafan]

Hmmmm…I’m not quite sure about that. Perhaps with more conditions on it…

The guy with a family has one kid and the wife is able to work part time in order to help support the family without compromising home life or her child’s care. Still OK to have disparate wages?

It was a short example with little details. I only meant to say, that an employee’s needs should also be used when determining wages. This is very “counter-cultural” in todays economy, although a very short time ago, it was standard practise. I have had the fortune to work for an employer where the owners were from another country, third world, and they certainly took into account employees’ needs when determining wages. It works well, it takes a while for some employees to accept it. But it is certainly inline with Catholic teaching.

 

[tafan]

Herein is the shortcoming of the guilds, as applied today. They never helped the poor, only the middle-class, skilled workman.

Yes there were shortcomins to the guilds. Many, as a matter of fact, but they had very good points also. As to the peasant issue, when peasants were impoverished (not all the time and in all places , by any means BTW), it was not a shortcoming of the guild system, as that really did not apply to them. It was a shortcoming of the feudal system, which controlled land-ownership and agricultural workers.

To think of a modern-day guild, think of the Bar Association, which does not control price of services but does self regulate members or think of realtor associations, which both self-regulates and controls prices of services.

 

[chevalier]

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?

Fred, we could ask how the value of the work should be determined. Market value? I don’t think so. Market value is something like a stock rating, fluctuating and reflecting the willingness of others to pay. It would have to be some kind of “fair value” (a concept not unknown to the law, actually).

It’s not true that everybody has the right to define his work and work the job he wants. That way people could indeed receive good money for useless jobs or jobs that don’t help much, while they could be doing some other jobs. But like a previous poster said, the investment of full time in actual work should cover the necessities. I would say the necessities probably hinge to some extent on the culture and other such factors, and that the employer’s means should be taken into consideration in order that the employee may earn not merely enough to cover his necessities so that he doesn’t die or walk naked, but a fair, just wage, enabling living in dignity. Poverty does not preclude dignity. On the other hand, if the society itself is oppulent, it should make sure there’s no miserable lower class among those who are not simply lazy.

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

He should but you will find more money on the management, the board, the shareholders, as well as all sorts of virtual money which is born out of virtual money operations. My willingness to accept the acceptability of a system in which such virtual money is created simply out of ownership or virtual instrument while people are suffering poverty is limited. I certainly would consider the possibility of proportional taxation in such cases. I wouldn’t punish people for getting an education, having a business talent, being lucky, inheriting fortunes etc., but I’m not convinced that operators of virtual money need to be allowed to get richer and richer.

 

[jflare29]

A few thoughts as I read through these postings:

1. The example of the driver who earned $140K by working ridiculous overtime strikes me as an ABUSE of capitalism. True, he may have earned enough to buy lots of stuff, but raising a family isn’t solely composed of “bringing home the bacon”. How can a man teach morals to his children if he’s not spending time at home raising them?

Sooner or later, that may have an economic impact too, because at least one of the family may inflict societal cost by breaking the law and requiring incarceration.

1. Declaring that a married man with a family deserves greater pay than a single man DOES strike me as problematic, especially regarding expectations.

Who’s to say for sure that the married man will use the extra money for his family and not for a fancy sports car? For that matter, who’s to say that the single man won’t use extra money to donate to charity?

On the whole, I get the distinct impression that most economic theories make numerous assumptions. I’d say it’s quite risky to place too much faith in one theory over another. Both probably offer virtuous ideas if applied correctly, but serious consequences when abused.
Perhaps the solution then comes down to evangelizing the world to Catholic faith, the better to at least have some degree of common ground upon which to base our policy discussions?

 

[chevalier]

Jflare, I’ve thought for a while about the single v. married dilemma. Paying more to the married person without framing it in terms of a family bonus or something, could be seen as unjust in our culture. Not necessarily in other cultures, say, Eastern ones maybe (just guessing). And I’m not sure where the objective truth is. I just have a couple of thoughts:

• as long as the singles are paid fairly, the married can receive an extra (see the parable about vineyard workers, denar each, regardless of the time they started working on that day);
• if there were harsh times to the point of having to cut or freeze wages, I think the employer could elect to spare the families first (which is not to say the single person can’t be the sole provider or a family).

On a different note, one thing we’ve talked about is guilds. Guilds have survived in some shape of form until now. An example of those are bar associations. Whatever you can say about your own in the States, the Polish one was notorious for some 10 years after the fall of the communist regime, keeping the numbers low and making sure the right surnames pass the exams. A running joke about oral examination of candidates not related to current members of the bar was, “the ship is 30 metres long, 10 metres wide; how old is the captain?” And yes, they could ask about any unrelated field of knowledge. At the same time, the number of lawyers per number of inhabitants was so bad that prices were very high and people had difficulty getting assistance.

Also, members of the bar were free to pay pennies to the newly admitted trainees (3.5 years to gain full rights), generally “under the table” (hello, taxes, insurance?) and a fee was collected from the trainees anyway. It was near-impossible to support oneself throughout the process, making sure the new lawyers were generally the offspring of the old.

Probably the whole of the society was mad at the bar.

…On the other hand, the ministry of justice took over the core of the admission process, i.e. the entry exam and the final exam of the bar traineeship. It worked for a while until 2008, where pass rate on the entry exam dropped from 40-60% in previous years to 11%. And in 2009, they made some 76% people pass because of the outrage caused by the 2008 exam (but they didn’t admit any wrongdoing or even mistake and held fast in the court, not being above mutually exclusive assertions, i.e. patent falsehoods, in their litigation). In 2009, it was more difficult again. And they messed with the final exam and people performing well throughout their traineeship and doing their job well were no longer reasonably sure of passing the exam as long as they studied hard for some time. In reality, some questions were plain dumb, as were the criteria of evaluation.

The ministry of justice has meanwhile taken over the training of judges and prosecutors (who are two separate “bars” here), treating them to the same system of examinations where questions are difficult as heck but plain dumb in construction and assumptions.

So all in all, I’m not sure I wouldn’t like the bar back in position. (I’m currently litigating against the ministry of justice).