What Is a Just Wage?

[Theo520]

Its all about supply and demand.

Yes it is all about supply and demand, but you imagine the hatred.

I don’t hate people without the legal right to work here, I just want the benefits of demand to go to my neighbor, or their children, or myself

Large numbers of illegal economic migrants hurts our poor the most, the exact group of people church teachings calls me to help as my priority (read up on subsidiarity).

 

[otjm]

When I see articles in magazines and papers dedicated to business and the market commenting on CEO remuneration, there has often been comments concerning how high it has become; and the often made comment has been to consider it as a ration to average pay. Over the last 50 years, that ratio has increased considerably.

I do not recall what the measure ysed to be (my somewhat vague recollection was that it was a factor of 3 - but like I say, vague); whatever it was, it has increased very significantly.

It also needs to be kept in mind that often a significant pprtion of remuneration is in stock and/or stock options; the reason being that if the CEO can get the company focused and increase business, the CEO is rewarded in the stock increase; and if the stock goes down…

I have met a few individuals who were “players”. One in particular was a very friendly individual (he would give me Dungeness crabs when he went out in the bay). He had sold a rather sizeable company he had started and made very successful, to a larger company and had retired from a vice president position with the larger one. I have no clue as to his net worth, but he had his main home in Idaho; a house in Oregon, one in Florida, one I believe in Arizona and I think one more somewhere else. The homes other than Idaho were definitely not as nice as the main home; they were vacation homes and some of them may have been relatively small (e.g. condos, a popular housing in Florida). He clearly understood the value long term of real estate. I also know that some firends/acquaintences/family would use the Oregon home for a vacation.

Because of his type of business, there were a lot of employees making well more than minimum wage.

Fair? He was creative; thought “outside the box”, and created a business that gave a good number of people work and living wages.

So the articles I have seen have basically questioned why the multiples for the CEO’s remuneration have increased so much faster than mainline wages, and why, if very successful businesses decades ago paid well, then what has changed, other than CEO’s have figured out they can demand more?

Ultimately, even the CEO’s package and that of the key employees (top of the food chain) would not significantly impact the salaries of the “worker bees”.

So, yes, some of the rmuneration is attached to increased profits. And some CEOs, certainyl not all or even a majority, have engaged in bad business practices to do so; often they are “outed” - and often sent looking for something else.

I don’t know that I would say production beyond a certain point is evil; but I also hold that consumers often can be come materialistic in their drive and values.

On an interesting note, a business owner (service industry) just reduced his salary to (if I understand correctly) $70,000 per year and gave everyone in the company a significant raise (as in $10,000 or more per year). Privately owned company (he and his brother) so he can do that. Exceedingly rare, but interesting.

 

[Augustinian]

We can say, however, that accepting 1800 times as much as the workers you oversee because your job is to save their jobs and you don’t do it, there is something wrong with that:

“Forget your lust for the rich man’s gold, all that you need is in your soul.”

Really, I honestly don’t care what other men earn. That’s their business, their responsibility. I would overwhelmed if I had billions of dollars.

 

[Socrates92]

It is true that none of us can judge the disposition of the soul of another person. We can say, however, that accepting 1800 times as much as the workers you oversee because your job is to save their jobs and you don’t do it, there is something wrong with that: with the action, with the situation, regardless of what “internal disposition” might mitigate the personal culpability for it. Giving administrators handsome rewards for actually doing their jobs in a way that increases or preserves company earnings while safeguarding the wages of the workers isn’t inherently unfair. Paying people upfront to be as stingy as humanly possible with the employees is something else again.
The letter of James warned about just this kind of thing:
Come now, you rich, weep and wail over your impending miseries. Your wealth has rotted away, your clothes have become moth-eaten, your gold and silver have corroded, and that corrosion will be a testimony against you; it will devour your flesh like a fire. You have stored up treasure for the last days. Behold, the wages you withheld from the workers who harvested your fields are crying aloud, and the cries of the harvesters have reached the ears of the Lord of hosts . You have lived on earth in luxury and pleasure; you have fattened your hearts for the day of slaughter.
James 5:1-5

Harvesting fields by hand is what is now referred to as a “dead end job.” Giving work a demeaning name does not excuse underpaying the harvesters.

Demeaningness aside - how much pride one does, or doesn’t take in one’s work has no relevance upon the economic value of the work. Economic value is something completely different than personal value, of course. I can describe a guy with extreme as economically useless (a statement I wouldn’t normally make except maybe in very precise contexts), but this says absolutely nothing about his worth as a person, which is the same as any other person.

Now that that’s out of the way:
I’m going to nitpick about the definition of greed because I think it’s an essential point.
You are expressing a greedy action as something objective, based on the circumstances. You describe it in a relative manner - ie: a certain compensation is “greedy” based on how it compares to other compensations. You are defining someone’s actions as greedy according to how they pertain to circumstances of other people. To me this suggests that you are actually raising a question of justice, rather than greed. To you, the fact that a CEO makes 1800x suggests that he is unjustly withholding something due to his workers, greed being the motivation to do so. But on what basis do you determine what is justly due? Why not the amount that is agreed on by both parties in the employment contract?

 

[Socrates92]

Also, your mentality suggests a bit of a zero sum view of the economy - the fact that someone makes 1800x someone else implying that he is hoarding a disproportionate amount of fixed resources at the expense of everyone else. Normally speaking, this is not how it works though. One can only command a compensation roughly on par with how much he contributes to the growth of the economy. If he does not contribute that amount, his job is not secure. This is apart from any instance where someone is making a handsome paycheque while not properly doing their job - that is a form of theft, and obviously unjust.

Also, simply looking at what someone receives and declaring that some amount is itself unjust ignores the other side of the question. Namely, what is he doing with that amount? As likely as not, $10M in the hands of a successful CEO is likely to do more for the economy and therefore the wellbeing of the common worker over time, than the same $10M divided between a few thousand of the same workers. This is simply because the average CEO is likely to be more knowledgeable, more resourceful, more able to take risks, and more responsible economically than the Common Joe on average. Once again, growth vs. zero-sum. None of this contradicts anything Our Lord said - withholding wages is still one of the “Sins Crying to Heaven for Vengeance,” but you have to show a little more than a ratio to prove than workers have been wronged in this way.

Rather, I’d argue that our Lord even supported income inequality. The parable of the talents suggests this. There’s a large difference (albeit less than 1800x, but the concept is the same) between 10 talents and one talent. It’s interesting that it’s actually the servant who received a mediocre one talent rather than 5 or 10, that gets taken to task. The reason being that he did not take proper stewardship of the resources entrusted to him. All three servants were responsible to use their talents responsibly for the enrichment of the master (translation: for the glory of God), but at no point does Christ advocate any form of income redistribution from the rich to the poor. It’s also interesting that the Master mentions investing and collecting interest - once again the growth vs. zero-sum mindset.

I disagree that it’s a question of mitigating culpability. Rather it’s a question of whether there is any wrongdoing at all. Back to my point about the actual dollar amount being moral or immoral. Larger compensation implies greater responsibility - what level of responsibility is an immoral amount for an individual to take on?

 

[Socrates92]

It’s still a really interesting question what constitutes “underpaying”. I don’t 100% disagree that such a thing exists. But I think I can argue a couple key differences between the 21st century economy, and the 30AD economy in Jerusalem that would change how you would evaluate this. While Christ’s teaching was for all men of all time, He did live in a certain period with very specific circumstances, meaning that he expressed His teachings in the context of his given time and place so that those listening would understand Him.

• First, Market competitiveness: Basically, this didn’t exist in the same way as it does today. Labourers simply didn’t move around as much - they were often tied to the same master/employer for life. Therefore there was more potential for exploitation. There was a much greater bond between employer and employee, and therefore greater responsibility to take care of the employee. Also, the employee arguably provided greater value to the employer in that the employer knew the employee wouldn’t abandon ship to his non-existent competitor.

Nowadays, labourers are mobile, but there is also, as a result, more opportunity for an employer to replace one employee with another. This further complicates the issue, as we are now dealing with three parties. Party1: Employer, Party2: Employee, Party3: Potential Employee-to-be. The economic value of a given employee derives nowadays not only from the exact productivity that he supplies his employer, but also from how much this differs from the potential productivity of other potential employees.

Ex: Bob’s $10/hr job provides $20/hr of value to his boss. I’d argue that in the 30AD economy, the boss would be responsible to provide Bob a living wage up to and including $20/hr, since that is the actual value provided (providing that the boss could also feed himself.) However, now assume that Bill can provide $25/hr for the same (name removed by moderator)ut of labour because he is more productive. The value of Bob’s labour is no longer $20/hr because the boss is suffering a $5/hr loss by not employing Bill.

It seems like I’m arguable that Bob’s labour has suddenly been devalued simply because Bill will do more for less. But this is where specialization of labour comes in (something else that didn’t exist to the same extent back in 30AD), resulting in more productivity, and, barring gov’t tinkering with the currency, more purchasing power per dollar, and a higher standard of living for Bob as well as Bill.

• Second: the nature of wealth: This has relevance with respect to greed. In 30AD, there was a limit to how much wealth could be accumulated. And this wealth was often perishable. There was much less potential to stockpile wealth to be used to increase future production and therefore less justification for accumulating it. Quite simply, a wealthy man can only eat so much food. Today it’s a little more complex. Wealth can be invested, and used to increase productivity, making it possible to compensate workers more. Yes, this investment does require some frugality in the short-term.

Not sure how well I explained that… ;/

 

[0Scarlett_nidiyilii]

Look, I’m not an economist. Nor do I own a business.
But if I did, and I could easily afford it, I would share the wealth around the employees.
I don’t see the point in being greedy and having millions in my own bank account while my employees are making minimum wage and struggling.
But if I were struggling, and the buisiness wasn’t going well, their wages would reflect that also.
That’s all.
I’m surprised anybody is upset at this concept

 

[0Scarlett_nidiyilii]

But a just wage is not the same as a living wage.
I’m not going to pay the 16 year old kid who comes into my hypothetical mom and pop store to sweep and man the register a couple afternoons a week a high enough wage plus medical benefits to raise a family on.

And that’s final.

 

[Socrates92]

I don’t see the point in being greedy and having millions in my own bank account while my employees are making minimum wage and struggling.
But if I were struggling, and the buisiness wasn’t going well, their wages would reflect that also.
That’s all.
I’m surprised anybody is upset at this concept

And quite possibly your struggling business (and lower wages) would be a result of haphazardly throwing high wages around instead of investing the profits so that wages could be sustained.

 

[twf]

Actually, they prefer “Beef Patty Specialist” or “Hamburger Technician” or even “Protein Artist” in the more hip locales.

 

[blackforest]

But a just wage is not the same as a living wage.

So what is a just wage?

’m not going to pay the 16 year old kid who comes into my hypothetical mom and pop store to sweep and man the register a couple afternoons a week a high enough wage plus medical benefits to raise a family on.

And that’s final.

I proposed some ideas upthread to free up business expenses in order for employers to afford just that. Perhaps it’s time for Catholics to have a conversation about how to balance our moral and Magisterial obligation to pay just wages with how to change the obstacles that stop us from doing so.

 

[blackforest]

You’re on to something here. Costco is an excellent example of how it’s possible to treat workers justly and run a successful corporation. A number of people shop at Costco in order to reward them for their labor practices, giving Costco its own competitive edge in the market.

 

[blackforest]

As I demonstrated upthread, there are no “large numbers” of undocumented immigrants.

They make up less than 3% of the U.S. population and are concentrated primarily in only 6 states. There aren’t enough of them to “hurt our poor the most.”

As an aside, why does it seem that 3/4 of absolutely everything on CAF boils down to undocumented migrants and pretty much all things sexual? There are some CAFers who should really watch their wallets and car keys, lest a would-be thief distract them with, “LOOK! OVER THERE! Undocumented immigrants having sex!”

 

[Theo520]

12,000,000 to 15,000,000 people is a HUGE NUMBER
3% of the population is a HUGE NUMBER
please just stop with your failed attempts to re position the problem as nonexistent.

 

[blackforest]

That’s already covered in the link that you didn’t read.

That 11 million accounts for EVERYBODY - down to babies and toddlers - not just the employable 8 million going to work.

This is a thread about what a just wage is. Are you prepared to define it and explain how you as a Catholic intend to support it?

 

[jtavington]

Can I just say that (rightly) insisting on upholding Church teaching on sex and abortion, which are not temptations that most CAFers face while doing everything they can to diminish and deny what the Church teaches about a just wage is a lousy look?

 

[Augustinian]

When I’ve hired people for one job or another over the years, I never thought to ask them what their needs are. I just find out how much they want to charge me, and either say yes or no.

 

[blackforest]

It’s cafeteria Catholicism.

I’d love to hang around and chat more, but now I need to dodge some rotten tomatoes . . .

 

[PetraG]

“Forget your lust for the rich man’s gold, all that you need is in your soul.”

Really, I honestly don’t care what other men earn. That’s their business, their responsibility. I would overwhelmed if I had billions of dollars.

The people doing the work aren’t being paid enough to live, even when companies have the profitability to pay them that. That is a greedy business model.

 

[Theo520]

I care about the cost to taxpayers, whether from 1 million or 15 million illegal immigrants.