Question

Business Ethics:

Is living wage a more ethical standard for employers to pay their employees? Explain and defend your position on whether you agree or disagree.

Answer 1

Yes, living wage is a more ethical standard for employers to pay their employees. Living wage is quite different from minimum wage. Minimum wage is the floor set by the government nationally where as living wage, as defined by the ETI Base Cose clause 5 is the wage that is enough to meet the basic needs of the worker and above it, provides some discretionary income and basic needs here are described as access to a standard level of nutrition, transportation, health care, energy, housing, childcare and additional savings without doing over time.

SOME OF THE REASONS WHY LIVING WAGE CAN BE CONSIDERED A MORE ETHICAL STANDARD ARE:

(a) Minimun wage is not enough for the worker to make his both ends meet and moreover, they are at the lowest end of pay grade. Without living wage, workers are:

• Forced to do overtime or take multiple jobs.
• Forced to put their younger ones into work instead of sending them to schools.
• Refused the basic human rights to health, nutrition, education, housing and shelter.
• Unable to survive difficult times

(b) Workers earning a living wage are more motivated to do work and therefore, are more productive. They are more healthier which means that no loss of working hours and lesser absenteeism.

(c) If minimum wage is made equivalent to living wage, it would mean that what the government was paying in benefits will now be paid by companies in wages and this will help the government to reduce their benefit spending as well.