Respect for workers in global supply chains: Advancing the debate over sweatshops. 58, 177202. (1912). London: IPPR & Resolution Foundation. In this section we will consider these challenges in turn. Referring to the notion of productivity, Ryan argues that on account of ignorance, immobility, or failure to assert themselves a number of workers are paid much less than the value of the groups marginal product and that wages also tend to equal that of its least productive members (ibid., pp. Retrieved July 2014, from http://www.bbc.co.uk/news/health-21430956. 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. This is followed by a historical and philosophical review of the relevant (and foundational) philosophical concepts that underpin the concept. Challenges related to these arguments include the debate around the appropriate calculation of the LW rate, the question whether more money for workers will indeed enhance their capabilities and whether the call for a LW should not only be about an hourly figure but also about capability enhancing working conditions more generally. 34, 4665. This approach has a number of critics, who argue that this average rate may not be sufficient for each circumstances individuals or families find themselves in (e.g. This approach can be found, for example, in the guidance provided by the Ethical Trading Initiative for supply chains in developing economies (ETI 2013). Families and individuals working in low-wage jobs make insufficient income to meet minimum standards given the local cost of living. For Waltman, the LW addresses the twin problem of (in-work) poverty and inequality (Waltman 2004, p. 85), both of which he considers inimical to civic republican ideas. Google Scholar. Journal of Business Ethics, London: Resolution Foundation. 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. Journal of Public Health, The contested and contingent outcomes of Thatcherism in the UK. Retrieved October 28, 2014, from http://www.theguardian.com/business/2014/oct/26/lowest-paid-rise-productivity-puzzle-low-wage-growth-uk. Dower, J., Reidy, T., & Latimer (2013). Sen holds an open-ended, pluralist conception of functionings and capabilities (ibid., pp. The determination in living wages. This endeavour remains controversial, however, particularly if the LW concept is tied not just to the workers individual needs but the needs of his or her family (Bennett 2014). The living wage: Building a fair economy. Geneva: ILO. Livable Wage by State [Updated May 2022] - World Population Review Functionings refer to the various doings or beings that a person achieves. A contemporary extension for using sustainability as an argument for the LW relates to social sustainability. Even though concerns over growing inequalities in income and wealth could be framed as a pure social justice problem, the social sustainability argument would say that economic inequalities within one society erode social cohesion and trust (Bijl 2011; Waltman 2004), which in turn may pose challenges for businesses that operate in such societies. 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. Fighting for a living wage. The externality argument requires one to consider explicitly the role of the state/government in their role to ensure that all their citizens enjoy a level of income that enables them to make ends meet. 34, 527535. Living Wage vs Minimum Wage - Top Differences - WallStreetMojo Both countries have minimum wage legislation, but it is considered weak as it has no automatic indexing (Grover 2005; Grimshaw 2004). Thatchers legacy. Some observers, however, are critical ofcalls demanding that governments address the problem of low pay and in-work poverty solely through the payment of benefits, rather than through seeking to increase incomes through higher wages, particularly in view of past experiences of negative effects on the economy and society.Footnote 12 Grimshaw (2004, p. 116) argues that todays wage subsidies such as tax credits, housing benefit and others reject the duty of employers to pay for the social costs of maintaining their workforce and thereby intensify pressures towards commodification of work. The Guardian, 15 December 2013. answer choices $8.25 per hour $9.25 per hour $10 per hour $7.25 Question 2 30 seconds Q. 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). Wages are part of the expenses that are involved in running a business. Jenkins, S. (2007). He adds that benefits potentially reduce the bargaining power of labour. Pennycook, M. (2012). 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. London: Routledge. The effects of living wage laws: Evidence from failed and derailed living wage campaigns. https://doi.org/10.1007/s10551-015-2562-z, DOI: https://doi.org/10.1007/s10551-015-2562-z. (2005). Journal of Economic Issues, Marketplace, 5 August 2014. London: IPPR & Resolution Foundation. 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. Guidance for Poverty Data Users Get more background on each survey or program, the difference between them, and how to choose the right data source for your needs. Paid every twelve months; 1 pay period per year. London: Institute of Business Ethics. Accessed 10 October 2014. https://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Pages/living-wage.aspx. Waltman, J. Last but not least, Stabile (2008) offers arguments for the LW from a moral economy perspective. 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). Caputo, R. (2008). Why does john a Ryan believe that everyone deserves a living wage Retrieved October 20, 2014, from https://www.accountancylive.com/lords-urge-government-oppose-quotas-women. It should be noted that hourly LW rates usually presume that the worker is in full-time employment. (2005). Fairness in the workplace: Pay. A wage is payment made by an employer to an employee for work done in a specific period of time. 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. 30, 194203. Luce 2004), social policy scholars (e.g. 16, 7179. Karnes, R. (2009). Allen, K. (2014). Bijl, R. (2011). Traditional theory of wage determination states that supply and demand for a worker's skills and services determine their wage and salary. Financial Times, 5 November. What are obstacles that keep organizations from adopting the LW? Publication Poverty in the United States: 2021 September 13, 2022 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. Retrieved October 20, 2014, from http://www.ethicaltrade.org/sites/default/files/resources/ETI%20living%20wage%20guidance_0.pdf. At the same time, Stabile (2008, p. 6) points out that the notion of capability also entails the idea that one should not just look at wage levels but also at working conditions - including number of total work hours (Waltman 2004, p. 193)and whether they diminish peoples capability, or whether they actively contribute to peoples development of their capabilities (see Garriga 2014). 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. McMahon, T. (1985). At the same time, they may still find it important to make reference to the business case, to justify to themselves and others that paying a LW makes good business sense. Penrose Care, for example, states on its website that a LW leads to improved morale, lower turnover of staff, reduced absenteeism, increased productivity and improved customer service. The companys offer of a high quality service, so the managing director states, has enabled them to win contracts despite charging more than their competitors (Allen 2014). Nominal Wage vs. Real Wage: What's the Difference? - Indeed Accessed 10 October 2014. 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. Learner, S. (2013). 5166). 7576; Robeyns 2005). The living wage refers to the income level required to sustain a decent standard of living based on the family size and the location. These necessities may include having enough money for decent accommodation, transport, clothing and personal care (Ciscel 2000). What are the differences between different types of business organizations (e.g. York: Joseph Roundtree Foundation. 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. Fighting for other folks wages: The logic and illogic of living wage campaigns. Aristotle emphasized the need of households to take care of themselves and be self-sustaining. However, a number of practical and philosophical challenges remain, if one seeks to make the LW a concept that will be effective in the real world. In order to legitimize their decision to pay the LW to staff and contractors, SSE lists a range of supporters on their website from local and regional politicians to NGOs, to business champions of CSR and the LW and to unions.