Living Wage…A Moral Value
A Guaranteed Living Wage program combined with a public-private jobs program could replace our current welfare and unemployment state. Eliminate all income taxes for moderate income people and companies that participate in his initiative. A living wage is the minimum income necessary for a worker to meet their needs that are considered to be basic. These needs include housing and other expenses such as clothing and nutrition. This standard generally means that a person working forty hours a week should be able to afford the basics for quality of life, food, utilities, transport, health care, education and childcare. In addition to this definition, living wage activists further define “living wage” as the wage equivalent to the poverty line for a family of four. Our current thinking on a minimum living wage only puts people just above the poverty level. Under my Guaranteed Living Wage, people could live a better life and get a share of the American dream through the fruits of their own labor.
The living wage differs from the minimum wage in that the latter is set by law and can fail to meet the requirements to have a basic quality of life and leaves the family to rely on government programs for additional income. It differs somewhat from basic needs in that the basic needs model usually measures a minimum level of consumption, without regard for the source of the income.
Living wage is defined by the wage that can meet the basic needs to maintain a safe, decent standard of living within the community. The particular amount that must be earned per hour to meet these needs varies depending on location. In 1990 the first living wage campaigns were launched by community initiatives in the US addressing increasing poverty faced by workers and their families. They argued that employee, employer, and the community win with a living wage. Employees would be more willing to work, helping the employer reduce worker turnover ratio and it would help the community when the citizens have enough to have a decent life.
Under this system lets say the GLW for a family of four is $5000 per month in a community and your employer only pays $4000, then that family would receive $1000 per month in government subsidy. Jobs would be created through a massive government-private sector initiative based on community needs of all kinds including infrastructure projects. Grants, loans and subsidies would be provided to employers and employees and our current welfare program would be replaced by this new forward thinking GLW law.
Activists of the GLW program argue that a wage is more than just compensation for labor. It is a means of securing a living and it leads to public policies that address both the level of the wage and its propriety. In his Wealth of Nations, Adam Smith, the great conservative philosopher and economist recognized that rising real wages lead to the “improvement in the circumstances of the lower ranks of people” and are therefore an advantage to society. Growth and a system of liberty were the means by which the laboring poor were able to secure high wages and an acceptable standard of living. Rising real wages are secured by growth through increasing productivity against stable price levels, i.e. prices not affected by inflation. A system of liberty, secured through political institutions whereupon even the “lower ranks of people” could to secure the opportunity for higher wages and an acceptable standard of living. Servants, laborers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be ﬂourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.
According to living wage advocates labor should receive an equitable share of what labor produces. Then as wages and rents rise, as a result of higher productivity, societal growth will occur thus increasing the quality of life for the greater part of its members. Activists argue that the greater good for society is achieved through justice. They argue that government should in turn attempt to align the interests of those pursuing profits with the interests of the labor in order to produce societal advantages for the majority of society. Smith argued that higher productivity and overall growth led to higher wages that in turn led to greater benefits for society. Based on his writings, one can say that Smith would support a living wage commensurate with the overall growth of the economy. This, in turn, would lead to more happiness and joy for people, while helping to keep families and people out of poverty. Political institutions can create a system of liberty for individuals to ensure opportunity for higher wages through higher production and thus stable growth for society.
Our current system of welfare and unemployment and other non productive programs would be replaced by the GLW and the public-private jobs program. The retired and disabled would be cared for with Social Security which would be maintained. With full employment and a GLW people could finally rise above their circumstances and achieve their part of the American dream.