From a Facebook reply to me about a living wage …
“You really hate waitresses, fast food workers, janitors, and minimum wage workers if you don’t want them to be able to pay their rent and eat. The people serving you also need sufficient food, shelter, clothing, transportation, and whatever else you have. They should have vacations, paid days off, sufficient and affordable healthcare. … Jobs are supposed to cover living expenses and give the worker the ability to save and live. An employer is supposed to care about their employees.”
In summary, an employer is supposed to pay a living wage, whatever that is.
I replied, “Some jobs are only worth so much. If the wages were raised, the company would have to raise its prices, and it would lose customers and perhaps go out of business and the employees would lose their jobs.”
“If the company can’t pay a living wage, the company shouldn’t be in business,” was the response.
In other words, the company will figure it out … somehow. That is, regardless of the laws of economics and human behavior, one’s wishes will override reality.
How would you respond to this? What issues need to be addressed?
As I see it, there are three major issues that need to be addressed. (and more that space prohibits)
• What is meant by a living wage?
• How is an employee’s pay determined?
• The underlying morality of a living wage.
What is meant by a living wage?
From Wikipedia
“A living wage is defined as the minimum income necessary for a worker to meet their basic needs. This is not the same as subsistence which refers to a biological minimum. Needs are defined to include food, housing, and other essential needs such as clothing. The goal of a living wage is to allow a worker to afford a basic but decent standard of living. Due to the flexible nature of the term ‘needs’, there is not one universally accepted measure of what a living wage is and as such it varies by location and household type.”
As we can see, there are many definitional questions here.
• What is a “need”?
• What kind of food?
• What kind of housing?
• What kind of clothing?
• What is a “basic but decent” standard of living?
With so many components underlying the concept of a living wage being either not defined or at most ill-defined, the concept itself is flawed, as it does not meet the basic criteria of a definition. This makes clear communication and understanding impossible. We have to get technical here, as our goal is clear communication.
What is a definition?
A proper definition states the essential characteristic(s) of the concept that differentiate it from other related items in the same family.1
For example, a chair is a piece of furniture with a horizontal surface, supported by legs, with a back, and is suitable for a person to sit on. “Furniture” is the family and the rest of the phrase contains the characteristics that differentiate a chair from other furniture such as a table or chest.
Hence, a wage is a payment made by an employer to an employee in exchange for the services provided by the employee. “Payment made by an employer to an employee” is the family and “in exchange for the services provided” differentiates it from other kinds of payments such as benefits or expense reimbursement.
A living wage is a special kind of wage, but we are unable to objectively define it, as the definitional questions are not answered (e.g. “need”, “basic but decent”), nor can they be objectively answered, as they fall into the subjective category of “beauty is in the eye of the beholder,” or “I’ll know it when I see it.”
In other words, we have a term that is undefinable. Which means not only is the concept itself flawed, but if you can’t define your terms, you literally don’t know what you are talking about, and you are just uttering meaningless sounds or writing meaningless symbols and your communication is not grounded in reality.
Why do we have to be so precise with our words?
Well-defined words are the foundation of effective communication and understanding. And effective communication is the foundation for all human relationships. And THAT is why we have to be precise! THAT is why words are important!
A word should have an unequivocal meaning. There should be clarity and precision; words should not be fuzzy, vague, diffuse, blurred, or indeterminate. Language is a tool of honor, always to be used as if one were under oath – an oath of allegiance to reality and to respect for the human beings with whom you are communicating.
How is an employee’s pay determined?
There are several factors that go into deciding how much to pay an employee for doing a particular job. First is the job’s value itself, no matter who is performing it. Factors here include a company’s pay philosophy, the internal value of the job relative to other jobs in the company, the market pay for the job, what the company can afford, and other factors such as benefits. Then once the range of pay for the job itself is determined, additional factors determine how much to pay an employee within that range of pay for doing the job. These factors include performance, education and skills, and experience. See my post that gives a detailed explanation on how to best determine employee pay, which is a topic all by itself.
It is important to note that these factors do not include a person’s perception of what it takes to live at a certain standard of living.
The Underlying Morality of a Living Wage
The first moral issue underlying the concept of a living wage is that one person’s needs are a valid claim on the lives and productive efforts of another. That is, one’s need or desire to “afford a basic but decent standard of living” is a claim on the employer’s resources and on the investors and owners of the company to satisfy that need.
To accept such a morality is to say that your life and the products of your achievements do not belong to you, but to others who lay a claim to them. Such a morality leads to personal and societal disaster.
It comes down to this: are you obligated to provide for others at your expense or is your life and property yours to do with what you wish? Do you own your own life or are you a slave to others?
Keep in mind that a job does not exist until an employer creates one, and that it is the company that sets the terms and conditions of the company’s offer. Similarly, the services an employee has to offer do not exist until it is offered by the employee, and that the employee sets the terms and conditions of that offer. It is not one-sided, but two-sided. There must be a mutually acceptable agreement between two consenting adults so that each perceives there is value received for for value given.
You might not be totally satisfied with what the company offers, but it might be the best you can get until something better comes along. As an employer, you may not be totally satisfied with what the employee has to offer, but that person might be the best until someone better comes along.
The employment relationship between the employer and the employee is voluntary. No one forces a person to apply for a job. No one forces a company to hire a particular person. No employment relationship exists until they both agree on the terms and conditions of employment. This is just as true for the person preparing your coffee at Starbucks as it is for the CEO of ExxonMobil.
In both cases, the competent performance of the job, and indeed, of every job, contributes to the success of the company, which means it contributes to the success of the employee as well, since the company’s success implies the sustainability of the job itself.
The second moral issue is that, just as a legally enforced minimum wage violates the rights of both the employee and employer to voluntarily reach an agreement suitable to them, so would any legally enforced so-called living wage violate those same rights. See my post on the minimum wage.
For the government to dictate wage rates and other terms and conditions of employment denies both a worker’s right to set the price and conditions for his own labor and perhaps deny his ability to learn work skills that will enable him to earn more, and a company’s right to decide what to offer.
Some jobs are not worth what one might consider a “living wage,” much less the legal minimum wage. As such, some folks may have to work more than one job to meet what they individually consider their needs. And they may have to share living arrangements with other people (including their parents) or ask for temporary help from charity until they are able to earn enough money to strike out on their own.
Summary
• The concept of a living wage is flawed in that it cannot be objectively defined.
• Many factors go into determining what a job is worth and what an employee is paid. One’s desired standard of living is not one of them.
• The concept implies that an employee’s needs are a valid claim on the employer’s property and resources. In other words, it implies that one person’s needs are a valid claim on the life of another. That is, one person’s needs make a slave of another.
• A legally enforced living wage is immoral because it violates the rights of both the employer and the employee to reach an agreement that is satisfactory to both that may be different than any alleged living wage.
____________________
As you are probably aware, many discussions on this topic are sometimes unfriendly and contain logical fallacies. If you decide to leave a comment, or even outside of this post, if you decide to have a discussion, public or private, you might find it helpful to follow the suggestions on my post How to have a successful discussion.
Reference
- Kelley, David the Art of Reasoning: An Introduction to Logic and Critical Thinking 4th Edition, W. W. Norton & Company Inc. 2014, Chapter 2 for a technical discussion of a definition.
Photo Credits
- Counter girl serving coffee: Andrea Piacquadio from Pexels
- House: John Davis