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64, 349367. Journal of Public Health, (2012). Critical Social Policy, Retrieved October 28, 2014, from http://www.theguardian.com/business/2014/oct/26/lowest-paid-rise-productivity-puzzle-low-wage-growth-uk. A poverty wage is a level of pay that would put a full-time worker below the U.S. poverty line, an income threshold set by the federal government each year. 749754). Term. Lawton, K., & Pennycook, M. (2013). This problem is exacerbated by rising living costs, stagnant wages (Whittaker and Hurrell 2013) and the growing retreat of the welfare state, which makes it more difficult for those on low wages to receive supplementary welfare payments from the government (Davis et al. However, whereas the right to subsist is an original and universal right, the right to a LW is a derived right, as it supposes a wage system as form of industrial organization (ibid., p. 68). The Guardian, 26 October 2014. They warn, for example, of increases in unemployment, price increases and fewer entry level jobs (labour substitution effects) (see Pollin 2005).Footnote 15. through investment in better equipment). Specifically, we examine in some detail how the concepts of sustainability, capability and externality are crucially important in developing a better understanding of what is at stake in the debates. Australian Economic Review, Cheltenham: Edward Elgar Publishing. 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. 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). 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). 42, 3346. In D. Figart (Ed. The Observer, 3 November 2013, p. 8. Wills and Linneker 2012; Flint et al. Retrieved July 10, 2014, from http://www.iea.org.uk/blog/living-wage-likely-to-destroy-jobs-and-increase-poverty. How do organizations frame these reasons to themselves and to others (shareholders, customers, government, citizens etc.)? Some scholars argue that the LW can at best be seen as having an educational function in a rich, but unequal society (Ciscel 2000) or as a rallying cry to boost the pay for those towards the bottom of the wage league table (Metcalf 2007, cited in Bennett 2014). Social Indicators Research, What we have aimed to do in our paper is to establish the ground work for key ethical, as well as business, issues that confront organizations thinking of engaging with the LW in a practical, cost-effective way that also makes a meaningful intervention in the lives and welfare of their employees and society at large. Grimshaw (2004), for example, refers to the Speenhamland Laws (1795-1834), under which employers could obtain workers at any wage, since a government subsidy brought workers income up to scale. Furthermore, the market system rests on a structure of incentives, and paying workers a LW may tamper with this incentive structure (ibid.). Amount of money that is the least amount of money per hour that workers must be paid according to the law. 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. The Huffington Post, 5 September 2014. It thus appears that both in the UK and the US, there is a trade-off between a pragmatic approach for making a difference in the lives of working people (for example, the UK LW rates of are significantly higher than the current NMW rate of 6.50 an hour), and the quest for, or implementation of, an ideal LW. Luce, S. (2004). In doing this, we hope to generate a reciprocal dialogue between philosophy and practice. Characteristics of minimum wage workers, 2021 Garriga, E. (2014). Andrea Werner. This applies both to full-time and part-time workers Click the card to flip Flashcards Learn Test Match Created by rlc_2000 Terms in this set (16) How does a minimum wage work? However, opponents of the LW warn of adverse unintended consequences if the LW was to be made mandatory, especially if the current NMW is low. http://www.livingwage.org.uk/. It is about the costs that being a LW employer brings to an organization. 115116; Waltman 2004, p. 89). 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). These, they argue, are high enough numbers to urge caution about a statutory LW. Hourly rate. BBC News, 3 November 2013. These rates are then promoted as the LW hourly rate that employers should adopt (at the time of writing 9.15 in London, and 7.85 in the rest of the UK). The labourers right to a LW is mirrored in the employers obligation to pay a LW. How do companies prepare for all these changes? All you that labor: Religion and ethics in the living wage movement. IBE Briefing 42. International Social Work, The budgets estimate community-specific costs for 10 family types (one or two adults with zero to four children) in all counties and metro areas in the United States. The concept also raises questions about the dignity of individuals and their familiesas well as the rights and obligations of employers to their employees. In general, changes in the living wage tracks the inflation rate at the national level. Wages & Salary Review Flashcards | Quizlet A Living Wage is: The remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family. This obligation is grounded in the employers private ownership of resources. St Antonio, for example, considered it unfair and sinful to pay less than the just wage because a worker had mouths to feed (Waltman 2004, p. 33). 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). Political Studies Review, (1897/1965). He contends that thinkers such as Smith, Bentham, Mill and Marx were particularly worried over the sustainability of the workforce (ibid., p. 55). 2742). Another argument that is important here is that migrant workers, a group disproportionately affected by low pay, also have less access to the welfare system (Bennett 2012). The NMW is a legal threshold, defined as the minimum pay per hour to which workers are legally entitled (UK Government 2014). Washington, DC: Economic Policy Institute. Critical Social Policy, Politics. This concept of unlimited bargaining, with the presumption of equal power between the two parties as the basis for wage justice, has also been fiercely criticized by Ryan (1912, pp. The LW is not an easy concept to define. In D. Figart (Ed. Cost-Of-Living Adjustment (COLA) - The United States Social Security Bennett 2014; Grover 2008), political scientists (Waltman 2004) and public health scholars (Flint et al. 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. SSEs commitment covers a whole range of direct employees, from sales staff, to metre readers, to office workers. food) and to goods that enable them to participate in society (e.g. National minimum wageLow Pay Commission Report. Allen, K. (2014). With regards to the debates around sustainability and capability, the following things should be noted. Book A) wages B) insurance C) incentives D) commissions Mutari, E., & Figart, D. (2004). Living Wage | UN Global Compact The amount they earn and method of distribution usually depends on the employer's payroll policies and other factors. In the US, an ideal household with one full-time earner and 23 dependentsFootnote 9 has been used as a benchmark for the promotion of regional LW rates (Mutari and Figart 2004).Footnote 10 At the same time, these calculated rates were not the ones that were finally negotiated and implemented in LW ordinances. Much of the contemporary literature on the LW is focused upon campaigns in the US (e.g. Living wage - Wikipedia Bonnie lives in, Research findings show that businesses that pay their employees a living wage have and more. SSE: http://sse.com/newsandviews/allarticles/2013/11/making-a-difference-to-sse-employees/. The living wage: Building a fair economy. This construct, like any other, remains contested and controversial among ethicists and business scholars. Retrieved October 20, 2014, from http://www.homecare.co.uk/news/article.cfm/id/1561473/london-living-wage-increases-effective-immediately-penrose-care. (2005). Retrieved October 20, 2014, from https://www.accountancylive.com/lords-urge-government-oppose-quotas-women. A minimum income standard for the UK in 2014. Reflections on the living wage. Pay differentials may be eroded as a result, and this may be regarded as being unfair. What are the reasons for business organizations not to engage with the LW? 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. This may lead to skewed political participation (p. 25) and impair public institutionsas private options for the rich may, for example, affect the quality of public transport and schools (p. 25). We have set out the legal, socio-institutional and economic contexts for these perspectives, and have raised salient issues, controversies and unresolved questions, such as the issue of the calculation of the LW and the merits of a voluntary versus a mandatory implementation of the LW. Start-up companies such as Penrose Care may find it easier to become LW accredited, as they are able to cost for the LW in their budgets from the start. So far, we have set out the range of theoretical arguments to be made both for, and against, the LW. The contributions of religious traditions to business ethics. Pay row energy firm gives staff living wage deal. An important distinction is to be made between the national minimum wage (NMW) and the LW. Low-wage workers make up the highest share of the workforce in smaller places in the southern and western parts of the United States, including Las Cruces, N.M. and Jacksonville, N.C. (both 62%);. Chicago: Quadrangle Books. How giving the lowest-paid a big rise could just solve our productivity puzzle. The effects of living wage laws: Evidence from failed and derailed living wage campaigns. Fairness in the workplace: Pay. Living wage and low pay campaigns in Britain. The first argument is, at a basic level, about workers being paid a wage that enables them to sustain themselves (Stabile 2008, p. 4). Living Wage/Minimum Wage Flashcards | Quizlet Arnold, D., & Bowie, N. (2003). 231232). Beyond the anecdotal, and thus limited, insights provided in the previous section, LW research from an ethics, CSR and management perspective requires systematic investigation of pressing issues such as why might business organizations want to gain accreditation as LW-friendly employers? Which of the following terms refers to all forms of pay or rewards going to employees and arising from their employment? Marx, K. (1977). Chapter Aristotle emphasized the need of households to take care of themselves and be self-sustaining. As a practical basis for our discussion, we focus on two accredited LW employers from the private sector, SSE and Penrose Care, as examples of how the LW may be engaged with and incorporated within an organizations structure, ethos and brand. In Sens framework, commodities are seen to be relative to the context in which a person finds herself (ibid.). An ethical perspective on CEO compensation. (2014). Ciscel (2004) provides an overview of the differences and commonalities of the different budget calculations done in the US, and some of the challenges involved in calculating these budgets. London: Routledge. Pollin and Luce 1998; Reynolds 2001; Luce 2004; Luce 2005; Adams and Neumark 2005a; Snarr 2011). Minimum Wages VS Living Wage Flashcards | Quizlet access to the internet) (Stabile 2008, p. 6); things they may have reason to value. Adams, S., & Neumark, D. (2005a). Scholars are not in agreement, however, as to whether Smith would have favoured state-enforced policies (ibid.) Keynesian economists make a strong case for wage-led economic recoveries (Onaran and Galanis 2012), in which ensuring that people are paid at least a LW could play an important part. US campaigns have used, for example, the Economic Policy Institutes research on family budgets and self-sufficiency standards (Ciscel 2004).Footnote 8 The UK campaign uses the basic living costs calculations by the Greater London Authority for the London LW, and Loughborough Universitys Minimum Income Standard for the LW outside London (Lawton and Pennycook 2013). 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. Learner, S. (2013). Onaran, ., & Galanis, G. (2012). Beyond stakeholder utility function: Stakeholder capability in the value creation process. Penrose Care: http://www.youtube.com/watch?v=jIM_ptAhFQw. Journal of Economic Issues, Permanent poverty: An American syndrome. Another issue relates to the fact that in a number of national contexts (including the UK and US) LWs are won by the effort of others (i.e. 4 November 2013. The legal minimum wage in the United States is $7.25 per. 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. Global labor justice and the limits of economic analysis. 13, 221242. For example, Unity Trust Bank, a LW-accredited community bank, has been offering discounts on lending rates for other LW employers.Footnote 17 And some LW-accredited companies have begun to make the LW a requirement for their suppliers (e.g. 36, 187193. This argument carries particularly strong force in contexts where public sector organizations contract services out to private businesses, as these businesses should not benefit twice from tax payers money (first, by winning a contract that is paid for by tax money, and second, by the tax payer subsidizing labour costs) (Figart 2004, p. 3).