what is a living wage quizlet

All you that labor: Religion and ethics in the living wage movement. (1968). Helm, T. (2013). Though their arguments draw on a range of well-known moral philosophical and economic theories and concepts, they may take on new pertinence in the age of neoliberalism, globalization and the weakening of the welfare state. 52, 6374. The labourers right to a LW is mirrored in the employers obligation to pay a LW. A number of studies have already been done in this area (e.g. (2006). Although the U.K. is ranked as the sixth largest economy in the world by nominal GDP (World Bank 2013), there are more than five million people, or about 21% of the working population (Markit 2013), who struggle to make ends meet in a low-wage economy, with women and young people being disproportionately affected (Helm 2013). First, criticism around how the UK LW rate is calculated does not appear to be an issue for the two companies, as well as for the other more than (to date) 1000 UK employers who have adopted the LW. Families and individuals working in low-wage jobs make insufficient income to meet minimum standards given the local cost of living. 74, 3233). This research agenda will include questions exploring practical implications as well as questions from a more critical perspective. We begin by defining and scoping the concept of the LW, noting the differences between national contexts for comparative purposes. Pennycook, M. (2012). In contrast, the focus of the LW movement in the UKspearheaded by Citizens UK, a coalition of faith institutions, schools and other civil society actorsis on the voluntary adoption of the LW nation-wide by employers in all sectors. Waltman (2004, p. 38) argues that such approach would create a level playing field among businesses and that it would be collectively in the interest of business as higher wages would increase overall purchasing power (ibid., p. 136). Economic Development Quarterly, Fighting for other folks wages: The logic and illogic of living wage campaigns. 231232). We emphasize that even though the UK is used as a primary example in this article, the arguments put forward will be of interest in the national contexts, where LW movements are beginning to follow a similar trajectory of voluntary adoption and accreditation, such as in New Zealand.Footnote 5 It should also be noted that the LW, although enjoying growing acceptance in public discourse in a number of countries, is still only a limited way of addressing problems of rising economic inequality, an increase of long-term low-wage jobs, and a decline of unions and legal protection for workers. The living wage movement: Building a political link from market wages to social institutions. Living wages and the making work pay strategy. New York: Vintage Books. http://www.livingwage.org.uk/. According to him it is a natural right, derived from each individuals rational nature (ibid.). Book Bennett, F. (2012). theory of negotiated wages. Thatchers legacy. It is interesting to note that these very early concerns still affect a number of workers today. Philosophical/ethical perspectives on the LW are to be found primarily in the works of three scholars from the turn of the twentieth century up to the present day who have, in our view, made extensive and important contributions on the subjectJohn Ryan (18691945), Jerold Waltman (b. Furthermore, universal, non-means-tested benefits, are also less likely to occur, and more likely to be reduced, under such conditions.Footnote 13 Waltman (2004, p. 164) posits that work should be the centre of any welfare reform (p. 164), especially in view of the fact that a life without having to depend on the help of others enhances peoples autonomy (p. 18) and in view of the personal and social dimensions of work.Footnote 14. About 910,000 workers had wages below the federal minimum. 26, 3165. a subsistence wage; a wage sufficient to provide the necessities and comforts essential to an acceptable standard of living See the full definition Cambridge Journal of Regions, Economy and Society, As stated earlier, this is made even more complicated by the debate, whether the LW should be based on the needs of an individual or a family (Stabile 2008, p. 144), and whether welfare payments to which certain households are entitled should be considered in determining a LW rate (Grover 2008; Bennett 2014, see also footnote 14). ETI (2014b). In D. Figart (Ed. Sweatshops and respect for persons. answer choices public transportation foot luxury automobile private jet Question 3 30 seconds Q. Industrial Relations: A Journal of Economy and Society, Open Access This article is distributed under the terms of the Creative Commons Attribution License which permits any use, distribution, and reproduction in any medium, provided the original author(s) and the source are credited. Working Paper. Capital & Class, Permanent poverty: An American syndrome. Wills, J., & Linneker, B. Despite these similarities, however, there are some differences between the two countries. Wages. Figart, D. (2001). The term "living wage" gets thrown around enough by politicians and advocacy groups that the definition can get muddy. Finally, to what extent are customers willing to reward LW employers with their custom? Correspondence to A "no" vote opposed the initiative to increase the state's minimum wage incrementally until reaching $15 in September 2026, thereby keeping the existing minimum wage of $8.56 per hour as of 2020 and adjusted annually. This approach can be found, for example, in the guidance provided by the Ethical Trading Initiative for supply chains in developing economies (ETI 2013). Economic Development Quarterly, Geneva: ILO. These questions suggest that we still have much to understand about how the LW is perceived by employers. Investigating the effect of the London living wage on the psychological wellbeing of low-wage service sector employees: A feasibility study. Robeyns, I. For example, in 2013, the chairman of Arsenal football club refused to adopt the LW because even though he considered the campaign well intentioned, for him the issue was complex and political. 34, 527535. Work itself may be considered as aiding the development of peoples capabilities. A wage rate that pushed workers below a subsistence level eroded their chances of being virtuous and was therefore considered unjust (Stabile 2008, p. 15). Penrose Care posts the Living Wage Employer logo on its homepage for all who visit its website and consider doing business with them to see. Minimum wage. According to their calculationswhich presume a worst case scenarioa mandatory implementation of the LW in the UK would reduce aggregate labour demand by 160,000, and a fall in demand for young employees with intermediate or no qualifications by 300,000. In the case of SSE, according to their 2014 Annual Report their adoption of the LW entailed that 148 of their 20,000 employees were paid higher wages, roughly costing them an additional 1,000 per employee. Real Living Wage increases to 9.90 in UK and 11.05 in London as cost of living rises. 28, 800814. Waltman, in particular, criticizes the exaggerated protection of property rights in liberal individualist thought (p. 12), in comparison to other rights that all citizens should enjoy. In this sense, the tensions already outlined in our paper between the arguments from capability, sustainability and externality open up for exciting avenues for future research. New York: NYU Press. Its roots, as we note in the sections below, go back to medieval thought. The aim of this article, therefore, is to conceptualize the living wage (LW) in its philosophical as well as practical dimensions in order to open up the ethical implications of its introduction and implementation by companies. What are the differences between different types of business organizations (e.g. Real Hourly Wage = $14.82. Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs including . Thus, the right to ownership comes must be exercised in a way which is consistent with the rights of others (ibid., p. 104). It is inarguable that higher incomes enable people to have better access to higher quality goods (e.g. In such contexts, the responsibility of customers and other stakeholders to recognize, and reward, LW employers, and shun those who do not pay a LW, will become more pertinent (see Ryan 1912, p. 264). How do companies prepare for all these changes? What price a living wage? Sen holds an open-ended, pluralist conception of functionings and capabilities (ibid., pp. Without any doubt, companies that employ a large proportion of low-waged workers (such as large retail chains) or that are constrained in their resources (especially smaller firms) will find it less easy to become LW employers than those in which only a small fraction of staff is affected or in which higher costs for contracted workers can be easily compensated by reputational gains. Social Indicators Research, The key argument Ryan makes, in his seminal work dating from the turn of the nineteenth/twentieth century, is that the claim to a Living Wage is of the nature of a right, to which all labourers are entitled (Ryan 1912, pp. Sustainability and capability arguments call for a wage level that enables a worker to sustain him/herself (and their families) from his/her efforts expended in work, and that enhances employees capabilities as human beings, citizens and workers. Hourly rate. Loughborough: University of Loughborough. What did the Omaha Platform want? Accessed 10 October 2014. Finally, LW accreditation may have implications for companies beyond their organizational boundaries, as it may lead them to take up an active role in encouraging other private-sector organizations to follow suit. National minimum wageLow Pay Commission Report. What Is a Living Wage? Definition, History, and How to Calculate Journal of Economic Issues, Amount of money paid for each hour of work. Fighting for a living wage. Perel, M. (2003). Companies often use value-based language to explain their decision to become a LW employer, such as respect (Penrose Care), fairness (SSE) and responsibility (Barclays and Friends Life). For some businesses, this may raise questions of viability, whilst for other business organizations the challenge will lie in explaining to their shareholders why they intend to spend more money than legally required on their staff. To date, business ethicists, corporate social responsibility scholars as well as management theorists have been slow to provide a comprehensive and critical scrutiny of the Living Wage concept. A number of LW campaigns in the UK focus on public sector institutions such as local councils (these campaigns are somewhat similar to the US campaigns, as they seek to obtain a binding commitment from these public sector organizations, albeit via a different mechanism, i.e. At the same time, observers note an increase in pay inequality and excesses in remuneration for those at the top of business organizations (IBE 2014). These living wage ordinances are legally binding agreements that require municipalities to pay a LW to their direct employees. Whilst Waltmans proposal is not (currently) applied in the real world, his approach is interesting, as it considers the LW relative to the incomes and living standards of the wealthy in a particular society, and thus draws attention to potential excessive inequalities. Nominal Wage vs. Real Wage: What's the Difference? - Indeed Furthermore, a tangle of issues related to who, how and why the LW ought to be paid to workers has to be considered in such debates. Back in the nineteenth century, Sidney and Beatrice Webb called employers who paid below-subsistence wages to their workers social parasites. These employers would impose costs on society, as, by exploiting and exhausting their workforce, they would deplete the nations capital stock of character, intelligence and energy and also negatively affect reproductive abilities. Here's the difference between a 'minimum wage' and 'living wage,' and This approach has been discussed by the US-based Economic Policy Institute (Bernstein et al. At a fundamental level, the concept of the LW has direct implications for business organizations, clearly, as it concerns how much they pay their workers at the bottom of the pay scale. Never waste a good crisis: Towards social sustainable development. It raises a number of questions about motivation for, and implementation of, the LW in private-sector organizations, which CSR scholars are well placed to explore. Compensation & Benefits Review, And workers paid above the subsidy scale found their pay driven down in competition with subsidized workers. Thus they are going beyond the use of one ideal household type. Waltman (2004) and Ryan (1912), favour a mandatory approach, that is, that governments make the LW the legal minimum that employers have to pay. More radical suggestions in this area have included the idea of granting every citizen a basic income, no matter whether they work or not (e.g. In what follows, we lay out explicitly how businesses may engage constructively with these debates, in the context of the voluntary, accreditation-based approach pursued in the UK, and what the implications are. Retrieved October 10, 2014, from http://www.marketplace.org/topics/business/meet-woman-behind-ikeas-living-wage-calculator. Poverty - Census.gov Business Ethics Quarterly, With the LW movement, especially in the UK, we can see a shift occurring away from traditional labour-capital relationships to a civil society led movement, which targets employers in their campaign for decent wages in a highly visible and well-organized manner. Another area for further research is a more thorough investigation of the effects of the LW on workers. What are obstacles that keep organizations from adopting the LW? What is the purpose of FLSA quizlet? - KamilTaylan.blog In other words, whilst the combination of a persons functionings reflects her actual achievements, her capability set represents her freedom to achieve the functionings she has reason to value. Nunn, A. 25, 527. Stabile (2008), on the other hand, grounds his arguments for sustainability in a more systemic, social utility view: if, because of low wages, workers were forced to work long hours, this would diminish their strength and longevity, and lead to a depletion of resources (Stabile 2008, p. 4). Florida Amendment 2, $15 Minimum Wage Initiative (2020) But other campaigns in the UK also explicitly target private-sector businesses without government contracts, which contrasts with the approach pursued in the US.Footnote 4 As mentioned earlier, this nudging of private-sector companies to engage with the LW concept as part of their moral obligations or their corporate social responsibility provides a richer context for CSR, management and business ethics research compared to those contexts in which paying the LW is a matter of compliance or adherence to long-established bargaining processes only. Low Pay Commission (2014). The minimum wage was designed to create a minimum standard of living to protect the health and well-being of employees. Countering the argument that higher wages pose additional costs to businesses they cannot bear, Waltman (2004, p. 133) and Pollin (2005) refer to efficiency and productivity gains that businesses may enjoy, for example, through reduced absenteeism and turnover and a subsequent reduction in recruitment, training and supervision costs, as well as a better motivated, and thus more productive, workforce. Wills and Linneker 2012; Flint et al. Wills, J., Datta, K., Evans, Y., Herbert, J., May, J., & McIlwaine, C. (2009). By contrast, the UK campaign favours a voluntary, accreditation-based approach, although this approach may be actively promoted by government (Living Wage Commission 2014).Footnote 16 A voluntary approach may avoid a number of above listed unintended consequences, as the LW will be implemented more gradually. It is about the costs that being a LW employer brings to an organization. August 7, 2018 For most U.S. workers, real wages have barely budged in decades By Drew DeSilver On the face of it, these should be heady times for American workers. As an idea, the LW has, in fact, been presented in the works of ancient Greek philosophers and medieval scholars. A true living wage that supports a basic standard of living without food and housing insecurity would be between $20 and $26 or more per hour depending on the state. As such, the LW movement does not explicitly tackle the problem that people may be underemployed, that is, that they would like to work more hours than is offered to them, or that they are on so-called zero-hours contracts which do not guarantee any fixed amount of work and income (Pennycook 2013). These necessities may include having enough money for decent accommodation, transport, clothing and personal care (Ciscel 2000). Translated by Benjamin Jowett. Currently, LW-accredited companies do not have to roll out the LW in their supply chains. food) and to goods that enable them to participate in society (e.g. Paid every twelve months; 1 pay period per year. Firms may find it difficult to pay a LW if they cannot absorb these additional costs from their profits or through higher prices, although a number of businesses will be able to do so (Pollin 2005). According to Penrose Cares website, the founders started the company as a response to the need to fundamentally reform the home care sector in the UK to help improve elderly care and disabilities care in the UK. The companys managing director further states that a LW for care workers means that those special individuals that have a vocation to care can pursue care as a profession - being able to live securely so that they in turn can help the elderly and disabled in our society feel secure. The company became LW accredited in Autumn 2012 and is only one of four out of about 1,000 care agencies in London that pay the Living Wage (Homecare 2013). It should be noted that the current LW rate in the UK falls somewhat short of the ideal of making people independent of supplementary welfare payments. Webb, S., & Webb B. Bernstein, J., Brocht, C., & Spade-Aguilar, M. (2000). Flint, E., Cummins, S., & Wills, J. Business Ethics Quarterly, Legal minimum wages, however, are not necessarily living wages, that is, wages that would meet peoples needs (Waltman 2004, p. 9). Google Scholar. Second, both companies are aware of the benefits the LW makes to their employees lives. Accessed 10 October 2014. http://www.livingwage.org.nz/. Ryan lived during a decisive moment in the development of Catholic social teaching within the United States. This challenge is being addressed by LW movements as they involve low-paid workers in their campaigns whenever they can (Wills et al. (1912). The LW may be a small, yet an important, contribution to social cohesion and sustainability. Living wage research for KPMG: Structural analysis of hourly wages and current trends in household finances. He contextualizes the debate around the LW in the tension between the (neoclassical) market economy and the moral or the social economy (Stabile 2008; Figart 2001, 2004). To understand the set of key tensions between the hand of the state, on the one hand, and those of private interests and obligations, on the other, we now turn to three more contemporary accounts of the LW. Grimshaw, D. (2004). Minimum wages should be understood as a wage floor for unorganized labour (Figart 2004, p. 2), which are, in contexts such as the UK and the US, rather cautiously set so as to ensure affordability for businesses and not to undermine economic competitiveness (Low Pay Commission 2014; Grover 2005). First, there is an expectation that workers negotiate a LW themselves with their employers (Stabile 2008). The reluctance on the part of some companies to use their LW accreditation as a marketing tool may be explained by the fact that it may make them vulnerable to criticism, for example, if the LW has not been consistently implemented in the firm or if they have been criticized by the public for certain practices and conduct in other areas of their business. London: Macmillan. Corporate Social Responsibility refers broadly to the notion that businesses either need or desire to do social good whilst carrying out their usual (profit-oriented) activities. Marketplace, 5 August 2014. London: Resolution Foundation. Journal of Business Ethics Money earned by an employee in one year. Living wage campaigns as social movements: Experiences from nine cities. Industrial Democracy. 2742). Livable Wage by State [Updated May 2022] - World Population Review 17, 10831092. Grover 2008, Bennett 2012, 2014). The effects of living wage laws: Evidence from failed and derailed living wage campaigns. Retrieved July 10, 2014, from http://www.iea.org.uk/blog/living-wage-likely-to-destroy-jobs-and-increase-poverty. Definition: The living wage is the amount of income needed to provide a decent standard of living. 43 and 46). What is the federal minimum wage? Even though paid employment was not the rule in the ancient Greek city state, Aristotle regarded proper earned income as essential to establishing self-reliance among all members of society (Stabile 2008, p. 15). In this section we will consider these challenges in turn. The Ethics of the Living Wage: A Review and Research Agenda (2014). The District of Columbia has the highest livable wage for an individual, at $20.80 an hour or $43,258 a year. Onaran, ., & Galanis, G. (2012). McMahon, T. (1985). But the externality arguments hold for all employers who do not pay a LW. Just as a just price was the outcome of a combination of fair bargaining and informed consent, a just wage was the outcome if both employer and employee knowingly and voluntarily agreed to the wage (Waltman 2004, p. 33). As an equally important contribution, the debate around the LW will be contextualized in the changing social contract between governments, businesses and civil society with the aim of identifying a research agenda for the LW that is both theory- and practice-driven. The Guardian, 15 December 2013. Bennett, F. (2014). By contrast, IKEA, who pays voluntarily a LW in the US, calculates its regional LW rates based on the needs of a single worker without children. Luce 2004), social policy scholars (e.g. Here is an example of how to calculate the real wage expectations for hourly pay if your pay rate is $15.00 per hour and the current inflation rate is 1.2%: Formula one: Real Hourly Wage = Hourly Wage - (Hourly Wage x Inflation Rate) Real Hourly Wage = $15.00 - ($15.00 x 1.2%) Real Hourly Wage = $15.00 - 0.18. Stabile points out that wages enabling the workers to sustain themselves are about more than food: they are also about those necessities that enable a worker to participate in society (Stabile 2008, p. 55 citing Seligman 1968). They warn, for example, of increases in unemployment, price increases and fewer entry level jobs (labour substitution effects) (see Pollin 2005).Footnote 15. The theory of negotiated wages was an explanation of wage rates based on the bargaining . Retrieved July 10, 2014, from http://www.ft.com/cms/s/0/b1df4dc2-2771-11e2-8c4f-00144feabdc0.html?siteedition=uk#axzz36yTE3x7H. In D. Figart (Ed. Living Wage Commission (2014). For these assumptions to work, market economists rely on the model of perfect competition (ibid., p. 10), which places workers and employers in equal positions in a bargaining situationan unrealistic model in a world where usually employers enjoy more power than workers, especially in the (not-unionized) low wage sector (Stabile 2008, p. 56). In a money-based society, Aquinas argued, prices had to be just to ensure that all members of society had access to necessities (ibid., p. 77). 100-101). Discovering new and potentially unexpected benefits, to employers from offering the LW in their organizations would be an important benefit of further research. It is an obligation to the employee regardless of . This might be considered a relatively small sum for a FTSE100 corporation, but SSEs commitment to make the LW a requirement for on-site contractors as well as their 2bn pound supply chain might carry further financial obligations for the company (although it is not known how much exactly this will cost them or they are able to pass costs on to others). Pollin 2005; Harcourt 1997; Figart 2004; Ciscel 2000; Stabile 2008), geographers (Wills 2009), sociologists focusing on labour studies (e.g. How giving the lowest-paid a big rise could just solve our productivity puzzle. Retrieved October 20, 2014, from http://www.homecare.co.uk/news/article.cfm/id/1561473/london-living-wage-increases-effective-immediately-penrose-care. Clary, B. The purpose of this paper, therefore, is to identify and clarify the arguments for the LW, to outline challenges and problems associated with the concept and to set out its implications for businesses. So far, we have set out the range of theoretical arguments to be made both for, and against, the LW. From an organizational perspective, an obvious question to address in greater detail would relate to the impact(s) of adopting the LW upon corporate strategy and the business model for accredited LW employers.

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