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. London: Queen Mary University of London. London Living Wage Increase Effective Immediately at Penrose Care. 16, 7179. Aristotle emphasized the need of households to take care of themselves and be self-sustaining. A wage is payment made by an employer to an employee for work done in a specific period of time. International Social Work, Clary (2009, p. 1065), for instance, has defined the LW as a wage equivalent to the poverty line for a family of four, or the amount of income generated by such a wage that would allow such a family to secure the food, shelter, clothing, health care, transportation, and other necessities of living in modern society.. Related to, and an extension of, the sustainability argument is that a LW should enable workers to enhance their capability (Stabile 2008, p. 5). 38, 303321. According to Stabile (2008, p. 10), low wage workers should earn a living wage as defined by the standards of the community in which they live and work. Some definitions of the LW explicitly refer to a wage level that would make workers (and their families) independent of welfare or other public subsidies (e.g. Accessed 10 October 2014. 64, 349367. Business chiefs warn over costs of living wage. Preiss, J. Translated by Benjamin Jowett. CNN With Congress already battling over hiking the minimum wage to $15 an hour, President Joe Biden likely raised a few eyebrows when he recently said that the federal minimum wage would. Living wage campaigns as social movements: Experiences from nine cities. Also, which LW campaign actions will make companies more likely to respond to societal demands to pay a LW? We set out the legal, socio-institutional and economic contexts for the debates around the LW and review arguments for, and against, it. 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. Correspondence to The living wage. 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. The Guardian, 15 December 2013. Sen holds an open-ended, pluralist conception of functionings and capabilities (ibid., pp. In fact, in the view of very weak or absent welfare systems and labour regulations, the adoption of a voluntary LW wage, by indigenous businesses and, importantly, multinational corporations in their operations in these countries and in their supply chains, will be of even more significance, although the challenges of implementing a LW will also be greater (see ETI 2014a). Geneva: ILO. BBC News, 3 November 2013. The national minimum wage. Loughborough: University of Loughborough. The living wage refers to the income level required to sustain a decent standard of living based on the family size and the location. 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. Adams, S., & Neumark, D. (2005b). The LW is not an easy concept to define. District of Columbia. Hirsch, D. (2010). Introduction to living wages around the globe. In 2021, 76.1 million workers age 16 and older in the United States were paid at hourly rates, representing 55.8 percent of all wage and salary workers. Labor Studies Journal, volume137,pages 433447 (2016)Cite this article. It is concerned with the fact that low wages impose cost on others (Stabile 2008, p. 7). The poverty threshold in the U.S. is not regarded as being sufficient to ensure an adequate standard of living (see Ciscel 2004). Similarly, what are incentives mechanisms and dynamics emerging between employers that may encourage and support the adoption of the LW? The preference for a voluntary approach is also in line with the norms and idiosyncrasies of UK business culture more generally. Journal of Business Ethics, 2014). These accounts reflect a plurality of what people value as individuals, and they show to their employers and others that a LW does make a difference and helps employees live better lives and enjoy more freedom. 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. Waltman (2004, p. 19) and Stabile (2008, p. 5) explicitly refer to Amartya Sens work on capabilities. 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. Basing a living wage on a minimum income standard. Living wage effects: New and improved evidence. 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. 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). In D. Figart (Ed. The LW is not an easy concept to define. Families and individuals working in low-wage jobs make insufficient income to meet minimum standards given the local cost of living. Politics and Society, a subsistence wage; a wage sufficient to provide the necessities and comforts essential to an acceptable standard of living See the full definition accreditation.) These questions suggest that we still have much to understand about how the LW is perceived by employers. According to their calculationswhich presume a worst case scenarioa mandatory implementation of the LW in the UK would reduce aggregate labour demand by 160,000, and a fall in demand for young employees with intermediate or no qualifications by 300,000. The minimum wage was designed to create a minimum standard of living to protect the health and well-being of employees. Bennett, F. (2012). London: Centre for Economic Performance, London School of Economics. It may, however, remain an issue, and an excuse, for non-adopters.Footnote 20. Penrose Care: http://www.youtube.com/watch?v=jIM_ptAhFQw. Learner, S. (2013). SSEs commitment covers a whole range of direct employees, from sales staff, to metre readers, to office workers. (2014). Pollin, R. (2005). 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. Those academics who calculate the UK LW rate outside London defend their approach, however, by pointing out that, under certain conditionsnamely, if both adults work full time in a household of a couple with two childrentheir calculated rate covers nearly 90% of all households, and that their approach enjoys legitimacy among stakeholders (Hirsch 2010). The contested and contingent outcomes of Thatcherism in the UK. Caputo, R. (2008). The case for the living wage. Business Ethics Quarterly, This approach has especially been utilized in US and UK campaigns. New York: Benziger Bros. Aristotle (1999). 2014). Retrieved October 20, 2014, from http://www.heraldscotland.com/news/home-news/pay-row-energy-firm-gives-staff-living-wage-deal.22280481. Living wage research for KPMG: Structural analysis of hourly wages and current trends in household finances. London: MacMillan. van Parijs, P. (1992). Arguing for basic income: Ethical foundations for a radical reform. The Minimum Wage is the lowest wage that employers can legally pay workers. An interesting avenue of enquiry would be how LW accreditation may affect companies perception of, and engagement with, their supply chain responsibilities. 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? 2009). A number of advocates of the LW, e.g. The District of Columbia has the highest livable wage for an individual, at $20.80 an hour or $43,258 a year. Here is an example of how to calculate the real wage expectations for hourly pay if your pay rate is $15.00 per hour and the current inflation rate is 1.2%: Formula one: Real Hourly Wage = Hourly Wage - (Hourly Wage x Inflation Rate) Real Hourly Wage = $15.00 - ($15.00 x 1.2%) Real Hourly Wage = $15.00 - 0.18. 58, 177202. Arnold, D., & Bowie, N. (2007). 68, 10631084. 43 and 46). Adams, S., & Neumark, D. (2005a). Anyone you share the following link with will be able to read this content: Sorry, a shareable link is not currently available for this article. Book We emphasize that even though the UK is used as a primary example in this article, the arguments put forward will be of interest in the national contexts, where LW movements are beginning to follow a similar trajectory of voluntary adoption and accreditation, such as in New Zealand.Footnote 5 It should also be noted that the LW, although enjoying growing acceptance in public discourse in a number of countries, is still only a limited way of addressing problems of rising economic inequality, an increase of long-term low-wage jobs, and a decline of unions and legal protection for workers.
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