Who is Responsible for a Living Wage?

Who is Responsible for a Living Wage?

Posted by  Mike LaBossiere  on April 24, 2015  Leave a comment  (18)  Go to comments

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There is, obviously enough, a minimum amount of income that a person or family needs in order to survive—that is, to pay for necessities such as food, shelter, clothing and health care. In order to address this need, the United States created a  minimum wage . However, this wage has not kept up with the cost of living and many Americans simply do not earn enough to support themselves. These people are known, appropriately enough, as the working poor. This situation raises an obvious moral and practical question: who should bear the cost of making up the difference between the minimum wage and a living wage? The two main options seem to be the employers or the taxpayers. That is, either employers can pay employees enough to live on or the taxpayers will need to pick up the tab. Another alternative is to simply not make up the difference and allow people to try to survive in truly desperate poverty. In regards to who currently makes up the difference, at least in Oregon, the answer is given in the University of Oregon’s report on  “The High Cost of Low Wages in Oregon.”

According to the report, roughly a quarter of the workers in Oregon make no more than $12 per hour. Because of this low income, many of the workers qualify for public assistance, such as  SNAP  (better known as food stamps). Not surprisingly, many of these low-paid workers are employed by large, highly profitable corporations.

According to Raahi Reddy, a faculty member at the University of Oregon, “Basically state and taxpayers are we helping these families subsidize their incomes because they get low wages working for the companies that they do.” As such, the answer is that the taxpayers are making up the difference between wages and  living wages . Interestingly, Oregon is a leader in two categories: one is the percentage of workers on public support and the other is having among the lowest corporate tax rates. This certainly suggests that the burden falls heavily on the workers who are not on public support (both in and outside of Oregon).

The authors of the report have recommended shifting some of the burden from the taxpayers to the employers in the form of an increased minimum wage and paid sick leave for workers. Not surprisingly, increasing worker compensation is generally not popular with corporations. After all, more for the workers means less for the CEO and the shareholders.

Assuming that workers should receive enough resources to survive, the moral concern is whether or not this cost should be shifted from the taxpayers to the employers or remain on the taxpayers.

One argument in favor of leaving the burden on the taxpayers is that it is not the moral responsibility of the corporations to pay a living wage. Their moral obligation is not to the workers but to the shareholders and this obligation is to maximize profits (presumably within the limits of the law).

One possible response to this is that businesses are part of civil society and this includes moral obligations to all members of that society and not just the shareholders. These obligations, it could be contended, include providing at least a living wage to full time employees. It, one might argue, be more just that the employer pay a living wage to the workers from the profits the worker generates than it is to expect the taxpayer to make up the difference. After all, the taxpayers are not profiting from the labor of the workers, so they would be subsidizing the profits of the employers by allowing them to pay workers less. Forcing the tax payers to make up the difference certainly seems to be unjust and appears to be robbing the citizens to fatten the coffers of the companies.

It could be countered that requiring a living wage could destroy a company, thus putting the workers into a worse situation—that is, being unemployed rather than merely underpaid. This is a legitimate concern—at least for businesses that would, in fact, be unable to survive if they paid a living wage. However, this argument would obviously not work for business, such as Walmart, that have extremely robust profit margins. It might be claimed that there must be one standard for all businesses, be they a tiny bookstore that is barely staying afloat or a megacorporation that hands out millions in bonuses to the management. The obvious reply is that there are already a multitude of standards that apply to different businesses based on the differences between them—and some of these are even reasonable and morally acceptable.

Another line of argumentation is to attempt to show that there is, in fact, no obligation at all to ensure that citizens have a living income. In this case, the employers would obviously have no obligation. The taxpayers would also not have any obligation, but they could elect lawmakers to pass laws authorizing that tax dollars be spent supporting the poor. That is, the tax payers could chose to provide charity to the poor. This is not obligatory, but merely a nice thing to do. Some business could, of course, also choose to be nice—they could pay all their full time workers at least a living wage. But this should, one might argue, be entirely a matter of choice.

Some folks would, of course, want to take this even further—if assisting other citizens to have a living income is a matter of choice and not an obligation arising from being part of a civil society (or a more basic moral foundation), then tax dollars should not be used to assist those who make less than a living wage. Rather, this should be a matter of voluntary charity—everyone should be free to decide where their money goes. Naturally, consistency would seem to require that this principle of free choice be extended beyond just assisting the poor.  After all, free choice would seem to entail that people should decide as individuals whether to contribute to the salaries of members of the legislatures, to the cost of wars, to subsidies to corporations, to the CDC, to the CIA, to the FBI and so on. This does, obviously enough, have some appeal—the state would operate like a collection of charity recipients, getting whatever money people wished to contribute. The only major downside is that it would probably result in the collapse of civil society.

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