|
The ethics surrounding a minimum wage Colins (2013) states, “a minimum or living wage refers to the lowest wage an employer can legally pay an employee; a value that is set higher than what the existing market would establish” (pg.54). This wage is one that would not be set otherwise if not for government or political interference. A major player in the formula to set a minimum wage is the economy where there is an ever changing balancing act of employment percentages along with supply and demand. The theory that supports a living wage is that an employee should be paid a fair wage for the work they are participating in. The ethical issue is found when the claim to capitalism and a free market are placed at a crossroads with an employer’s right to pay whatever the employees will work for even if that amount is lower than what the cost of living typically is as long as the employer can maximize their own profits; the base line rule for most business endeavors. By constitutional right, some would argue, an employer has every right to pay an employee whatever wage they are willing to work for as they enter into a private contract with that employee. Many will argue that a minimum wage forces employers to lay off employees and increase their own prices; which forces the market demand downward into a cycle of higher prices with an ever decreasing demand that occurs due to lay-offs and consumers with less disposable income. In a recent article, Leonard states, “The less- or unskilled worker has been the target of the minimum or living wage argument for over a century, and the idea of appropriate minimum rates is a current problem facing both domestic and global companies. Furthermore, arguments that a minimum wage would cause job loss and other societal problems have not been supported” (2008). Although job losses often occur along with the increase to a minimum wage, There is no evidence to support those lay-offs are directly related to a need to maintain a positive balance sheet, rather than, a desire to maintain current profitability levels. The ethical argument in this scenario questions whether an employer is seeking its own interest and acting in an egoist moral standpoint, or if those employers are merely attempting to act in a utilitarian manner whereas they only way to support the good of the whole organization is to lay off the few whom will most hinder progress. In a business, it is important to ensure the interest of the stakeholders is met at all cost; one of those methods being a maintenance a desired profitability level. However, as an egoist would decide, although the laid off employees could be put to a better use and assist in maintaining current production levels; the employees who are kept on staff will be forced to meet higher quotas and work longer hours in order to maintain their own jobs. The answer to this problem can usually be found by seeking the employer’s financial information. Some companies may be legitimately in the red due to expenses and a higher minimum wage would only be detrimental to their efforts, but no company can state that the reason for failing profits is in any way directly related to a minimum wage as the market price is set where other companies are operating efficiently at an equal employee wage. The issue with a living wage is most closely related to greed of employers that is created by the competitive market in America. Each company is attempting to out due another when the reason they are failing is likely Darwinism taking its toll. Survival of the fittest is the way of the American economy and unfortunately there will always be collateral damage for employees who are not in a position of control. On the other side, there are some who believe a minimum wage is detrimental as it slows the progression of an economy. Gaski (2004) states, “Over the years, a disturbingly high number of self-styled labor advocates have done everything in their power to enact a policy that some among them, admittedly, believe is detrimental to the people of this country.” In his article, Gaski believes that a minimum wage is a poor idea because compared to most countries; American wages would be considered lavish. Although his point is true, America is also one of the few fully developed countries in the world and natural has a much higher standard of living; or else why would anyone seek to come to America. The fact is other countries standard of living, unfortunately, is far too low. A minimum wage is a good thing because the higher the wages in an economy, the greater amounts of discretionary income consumers will have to buy greater amount of goods. It is through this money flow cycle that pushes demand higher and with it production. However, legislation should take precaution when increasing minimum wages to ensure they are not raised too far above the market wage. The ethics of a living wage are closely comparable to the ethics of the society in which they are held. As society progresses, so too does its morals and standards. In America, what we once held as slavery was socially acceptable was (most would consider) more harsh than current sweatshops in other cultures. However with time, and development, we have reached a new moral standpoint. Powell & Zwolinski state, “No economic mechanisms have been identified that would allow higher working wages or conditions to be legally mandated in underdeveloped countries without harm to the labor force”(2012). Employees are at risk of unethical treatment and being placed in the classical sweatshop economy if living wages are not set in America; whereas in an underdeveloped economy a minimum wage might harm workers because their economy may not be efficient enough to support free trade at higher labor wages. Colins, D. (2013). Business Ethics: How to design and manage ethical organizations. Hoboken. NJ. 54. GASKI, J. F. (2004). Raising the minimum wage is unethical and immoral. Business & Society Review (00453609), 109(2), 209-224. Leonard, K. (2008). The Minimum Wage: Ethics and productivity. Journal of Collective Negotiations, 32(1), 77-87. Powell, B., & Zwolinski, M. (2012). The Ethical and Economic Case Against Sweatshop Labor: A critical assessment. Journal of Business Ethics, 107(4), 449-472.
Related Articles -
Minimum wage, living wage, ethics,
|
