Economic Policy Institute | Family Budget Calculator The living wage. In contemporary settings, such as in the UK, low wages pose a cost to society as they are supplemented by means-tested welfare payments such as housing benefit or free school meals, so that peoples needs are met. We set out the legal, socio-institutional and economic contexts for the debates around the LW and review arguments for, and against, it. Geneva: ILO. The Fair Labor Standards Act (FLSA) was enacted in 1938 to provide minimum wage and overtime protections for workers, to prevent unfair competition among businesses based on subminimum wages, and to spread employment by requiring employers whose employees work excessive hours to compensate employees at one-and-one-half times the regular rate of pay for all hours worked over 40. 86) argues that work provides a structure to life, gives most people a sense of accomplishment, provides a sense of identity, forces us to confront the social world, and contributes to the development and maintenance of a healthy civic life. 1. Perel, M. (2003). Bernstein, J., Brocht, C., & Spade-Aguilar, M. (2000). We begin by defining and scoping the concept of the LW, noting the differences between national contexts for comparative purposes. Within this re-written social contract and the new nature of relationships between business and (civil) society, business and government, civil society and government, and between businesses, that emerge from this new social contract, a rich research agenda for business ethics, CSR and management scholars can be identified. Reynolds, D. (2001). Finally, we set out a range of research questions that merit further exploration by business ethics, Corporate Social ResponsibilityFootnote 1 (CSR) and management scholars. 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. These relate to sustainability, capability and externality. Ethical foundations of the contemporary living wage movement. About 910,000 workers had wages below the federal minimum. Business Ethics Quarterly, Ryan argues that ownership is an appropriation of the resources of nature, which diminishes the amount of resources to others (ibid., p. 100). New York: Vintage Books. Sweet, P. (2014). Living Wage Calculator A) salary B) employee benefits C) wage reimbursement D) employee compensation d) employee compensation Which of the following is NOT a type of direct financial payment? Living wage effects: New and improved evidence. At the same time, even though a relative LW may be relatively easy to compute, it is more de-coupled from the actual needs of workers and their families (Ciscel 2004). Introduction to living wages around the globe. 781. Thus, even relative deprivation in income (for example, a relatively poor person in a rich country) can lead to absolute deprivation in terms of capabilities as more income is needed to buy enough commodities to achieve the same functionings (ibid., p. 89, our emphasis). Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs including . 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. The Huffington Post, 5 September 2014. PubMedGoogle Scholar. Another interesting proposal comes from pro-LW think tanks, who recommend that government should require stock-market listed corporations to report how many employees they pay less than the LW rate, through new provisions in the soft-law UK Corporate Governance Code (ibid.). The legal minimum wage in the United States is $7.25 per. National and global effects. Clary, B. Mutari, E., & Figart, D. (2004). 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. Adams, S., & Neumark, D. (2005a). 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. Key philosophical arguments from the perspectives of sustainability, capability and externality are invoked and discussed in order to demonstrate the issues and challenges involved for companies, state and civil society actors. Domestic Service Final Rule Frequently Asked Questions (FAQs) At the same time, not all LW employers are so upfront regarding their commitment. Wages include any form of monetary compensation that professionals receive for the hours they work. Retrieved July 10, 2014, from http://www.bbc.co.uk/news/uk-24786397. These employees talk about how the LW helps them to meet the cost of the essentials of life such as bills, food, rent and transport; to prevent them from being in debt and to enjoy a better social life. Considering the challenges of a voluntary approach to paying the LW, the third internalization mechanism, incentives, may be considered a suitable complementary strategy driving the adoption of the LW forward. It should pay for cost of living in any location, and should be adjusted to compensate for inflation. Caputo, R. (2008). Benefits, Despite these similarities, however, there are some differences between the two countries. Journal of Urban Economics, 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. Our living wage guidance. London: IPPR & Resolution Foundation. Ryan, J. Lords urge government to oppose quotas for women. Karnes, R. (2009). Material inequality, on the other hand, can destroy the basis for legal and political equality (on which modern societies are built), as vastly different incomes lead to disconnect between the rich and the poor in one society (p. 24). Global labor justice and the limits of economic analysis. 28, 800814. With regards to the use of absolute standards, the challenges are as follows. Living Wage vs Minimum Wage - Top Differences - WallStreetMojo Werner, A., Lim, M. The Ethics of the Living Wage: A Review and Research Agenda. living wage Flashcards | Quizlet It is outside the remit of this article to review the merits and problems of the basic income concept. This obligation is grounded in the employers private ownership of resources. 1944). Middlesex University Business School, The Burroughs, London, NW4 4BT, UK, School of Management, University of Leicester, University Road, Leicester, LE1 7RH, UK, You can also search for this author in Waltman (2004) and Ryan (1912), favour a mandatory approach, that is, that governments make the LW the legal minimum that employers have to pay. BBC News, 3 November 2013. Reflections on the living wage. 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. Snarr, C. M. (2011). Currently, LW-accredited companies do not have to roll out the LW in their supply chains. These three themes feature to a larger or lesser extent in the writings of all three authors, and they provide the structure for the following sections, in which arguments for, and challenges of, the LW concept will be outlined. Also, especially if one holds Stabiles view that capabilities also relate to peoples functions as members of societies and workers, would one have a right to tell people how they should spend their money? Amount of money paid for each hour of work. J Bus Ethics 137, 433447 (2016). 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. 105 Minimum Wage Essay Topics & Samples | IvyPanda Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Ithaca, NY: Cornell University Press. 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. Exam 3-Chapter 11 Flashcards | Chegg.com How Poverty in the United States Is Measured and Why It Matters This approach has been discussed by the US-based Economic Policy Institute (Bernstein et al. Verified answer. 2014). At their best, LW campaigns can be seen as community unionism (Fine 2005). 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. Consumer Price Index Frequently Asked Questions Drawing on Christian tradition, Ryan argues that every human being has an imperishable right to a livelihood from the common bounty of nature, and that thus the labourer is endowed with an absolute right to at least sufficient remuneration to maintain his life (ibid., p. 27). Onaran, ., & Galanis, G. (2012). Earnings may include payments received in lump sums, including: The living wage Living Wage The Living Wage is the money that a worker must earn to meet their basic needs by society's standards. Bijl, R. (2011). Waltman (2004) sets out various personal and social dimensions of work, which are related to capability.Footnote 6 He points to the problem that people in low-paid jobs may feel worth-less and are thus deprived of the self-respect that they should normally gain from their employment; but a LW could contribute to changing the way they look at themselves and their work (see pp. Ciscel, D. (2000). Accountancy Live, 12 September 2014. List the reasons for your choice. 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).