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Living Wage

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JULIUS MARK V. IBA´┐ŻEZ IV BS MANAGEMENT INFORMATION SYSTEMS THEOLOGY 141 (FR. PASQUALE GIORDANO, S.J.) LIVING WAGE Mater et Magistra, an encyclical by Pope John XXIII, addressed the issue of wages. The encyclical provided an in-depth look and insights about the work of man and remuneration for his work. This is especially important nowadays in a world where there is much injustice especially in the socio-economic aspect of living. It must be said that people, especially those with very low wages, have to be given more for the services that they render. It is so common that people who are powerless are taken advantage of because of their status in life. Everyone, especially those who control the means of production, must understand that unreasonable wages are bad not only to those who receive them but to everyone. Also, increased wages should not be seen as a detriment to good business or economics but rather a benefit. Everybody must direct their efforts towards giving a living wage to workers. The amount of living wage will vary from time to time and from country to country. It must be determined according to the rules of justice and should not be left to the free market to determine. In other words, the amount of wage should not be decided according to the number of persons who are available to do the work. When this happens, wages drop, often to levels below what is necessary to sustain life. Instead, a just and living wage should take account of living conditions that are beyond the control of the worker, such as rents and the price of food. As is the most common outlook even today, economic matters are for the most part naturalistic1. This outlook prevails that the only valid motive of work is personal gain. The significance of wages is determined by the purely mechanical applications of the laws of the market place. ...read more.


Yes indeed, ships loaded with cheap goods, even knowledge-intensive goods, will cross the ocean from the developing countries, but they will not return empty. Regarding tradable manufactured goods, we are talking about a relatively small and declining portion of the industrial countries' economies. As for services, even with the much vaunted Indian software export development, wages for software designers are still rising in the United States, besides which most services cannot efficiently be traded internationally. So, if the low-wage advantage will last for a very long time, this is bad news for the individual workers. Countries, like our country, will not exert much effort in order to implement a living wage for the workers since it gives them an advantage. Something must be done in order to achieve what is recommended by Pope John XXIII in his encyclical, Mater et Magistra. For businesses, giving living wages might not such be a bad idea. Maybe businesses should study these companies and adopt their employment practices. Many economists, businesses and policy makers recognize that higher wages often result in a variety of business benefits. Studies and surveys of businesses describe real business advantages as a result of higher wages. These businesses report that higher base pay and benefits attract more qualified employees, and that those employees have high morale, are more productive, and require less supervision. Businesses also report that higher wages reduce employee turnover and absenteeism, leading to lower costs in the recruitment and training of new employees and improvements in the quality of products and services delivered to customers. The cost of employee turnover is no small matter for many businesses. Therefore, having a motivated and stable workforce not only creates a work environment that supports increased productivity, but it reduces the significant expense of recruitment and training. Such business benefits can go a long way toward offsetting higher wage and payroll tax costs associated with paying a living wage. ...read more.


In our country today, most businesses opt to pay minimum wages which are extremely below the living wage described in Pope John XXIII's encyclical, Mater et Magistra. With the discussions on the advantages and disadvantages on paying minimum or living wage, it should be obvious that paying living wage is not only better in terms of business but also in terms of the social benefits it provides. In conclusion, paying a living wage should be adopted by businesses as a part of their employment practices and should be promoted by the government. 1 Pope John XXIII, "Encyclical Letter on Christianity and Social Progress (Mater et Magistra)," May 15, 1961. 2 Hendry, Dr. John and Toshiaki Fujikawa, "Nike in Asia: Just Do It.," Case Reference # 300-069-1, Harvard Business School Publishing, 2000, available from http://www.caseplace.org/cases/cases_show.htm?doc_id=96406 3 Chanda, Nayan, "Movement of Jobs to Low-Wage Countries is Unstoppable," Yale Global, February 2, 2004, available from http://yaleglobal.yale.edu/display.article?id=3231 4 Yeats, Alexander J., "Just How Big Is Global Production Sharing," mimeographed draft, World Bank, 1997 5 Ferdows, Kasra, "Making the Most of Foreign Factories," Harvard Business Review, March-April 1997. 6 Kochan, Professor Thomas A., "Rebuilding the Social Contract at Work: Lessons form Leading Cases, Institute for Work and Employment Research," MIT Sloan School of Management, 1999, United Airlines Case available from http://www.caseplace.org/cases/cases_show.htm?doc_id=82030 7 Kochan, Professor Thomas A., "Rebuilding the Social Contract at Work: Lessons form Leading Cases, Institute for Work and Employment Research," MIT Sloan School of Management, 1999, The Xerox Company Case available from http://www.caseplace.org/cases/cases_show.htm?doc_id=82025 8 Card, David and Alan Krueger, "Myth and Measurement: The New Economics of the Minimum Wage." Princeton University Press, Princeton University, NJ, 1995, available from http://www.princeton.edu/ 9 Schoenberger, Erica, "The Living Wage in Baltimore: Impacts and Reflections." Dept. of Geography and Environmental Engineering, The Johns Hopkins University, 1999, available from http://www.jhu.edu/ 10 Appelbaum, Eileen, Thomas Bailey, Peter Berg, and Arne L. Kallenberg, Manufacturing Advantage: Why High-Performance Work Systems Pay Off," Washington, DC: Economic Policy Institute, 2000, available from http://www.epinet.org/ ?? ?? ?? ?? ...read more.

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