The Problem of Just Wage

8/11/2019 The Problem of Just Wage

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THE PROBLEM OF

JUST W GE

Desiree R. de la Rosa



WORK AND COMPENSATION

Work is said to be for the purpose of obtaining economic gain for the laborer

and is directed to the promotion of life. Being compensated for a work done or for

services rendered is part of the essence of work. One is willing to work in exchange for

remuneration or rewards which may include both financial and non-financial

compensation. It can be in the form of wages, shares on profit, harvest or commercial

goods, in-kind payments, and other remunerative fringe benefits.

The main objective of compensation is to create a system of reward that is

equitable to the employer and employee. The general concern is that justice should be

a substance of compensation.

TYPESOF

WAGES

FAMILY WAGE

The amount ofmoney that theworker needs toprovide for the

needs of thefamily. LIVING WAGES

The minimumhourly wage

necessary for aperson to achieve

some specificstandard of living.

MINIMUMWAGE

The minimumrate a worker canlegally be paid asset by the statuteor government.

JUST WAGE

The remunerationwhich is enoughto support thewage-earner inreasonable and

frugal comfort.

REAL WAGES

measured interms of actual

purchasingpower (inflation).

NOMINALWAGES

measured interms of money

paid, not inpurchasing

power.



THE QUESTION OF JUST WAGE

A just wage is defined as that remuneration which is enough to support the

wage-earner in reasonable and frugal comfort. The Catholic Church teaches us that a“ just wage is the legitimate fruit of labor .”

THE TEACHINGS OF THE CATHOLIC CHURCH ON WAGES

The question of just wages has played a dominant role in the teachings of five

popes. Guidelines for just compensation, according to their beliefs, were poetically

expressed in their apostolic writings.

Rerum Novarum

Also known as the Capital and Labor , in it,

Pope Leo XIII addressed what he termed the

“misery and wretchedness pressing unjustly upon

the majority of the working class.” The pope

wrote, “Members of the working classes are

citizens by nature and has the same rights as the

rich.” Pope Leo did not attempt to calculate a just

wage. He simply decried the philosophy

widespread then and today that the marketplace

alone should set wage structures.

Rerum Novarum is one of the most impassioned treatises ever written by a pope

on the sacredness of work and the dignity of the working person. Pope John XXIII

rightly called it the “Magna Carta for Social Reconstruction.”



Quadragesimo Anno (On the Reconstruction of the Social Order)

An encyclical written by Pope Pius XI that

advocated the minimum wage. Pope Pius XI

introduced profit sharing and giving workers a

say in a company’s management. Echoing

Pope Leo XIII’s previous encyclical, he insisted

that heads of families should receive a wage

sufficient enough to meet the “ordinary” family

needs. From this, he developed the concept of

“family wage”.

Mater et Magistra

Popes John XXIII and Paul VI wrote this encyclical(“Mother and Teacher ”) in 1961, which adopted and

affirmed the teachings of the previous social documents. It

also focused the world’s attention to the worldwide

problem of the widening gap between the rich and the

poor, the arms race and the plight of farmers.

Laborem Exercens

Issued by Pope John Paul II in 1981, this encyclical letter discussed the modern

perspectives and problems of human work and the duties of the members of the church

towards it.



Pope John Paul II offered a detailed

assessment of what constitutes just compensation,

declaring that workers have “fundamental rights”

to health-care insurance, suitable working

conditions and rest periods. The disabled he says,

“should receive job training, and migrant workers

should have special protections.”

In addition, the pope also argued that wages

should be sufficient so that women with children

aren’t forced to work so that “it should be possible for a

mother to devote herself entirely to her children.”

Centesimus Annus

On the 100th anniversary of Rerum Novarum, Pope John Paul II stated that

“Society and State must ensure wage levels adequate for the maintenance of the

worker and his family, including a certain amount for savings .”

The right to a “just wage”, which cannot be left to the “free consent of the parties,

so that the employer, having paid what was agreed upon, has done his part and

seemingly is not called upon to do anything beyond.”

Catholic Bishop’s Conference of the Philippines (CBCP): On Social Justice

It stated that remuneration for work should guarantee man the opportunity to

provide a dignified livelihood for himself and his family on the material, social, cultural,

and spiritual level, taking into account the role and productivity of each, the state of

business, and the common good.

Workers deserve a “family wage not in charity merely, but as duty to social

justice.”



THE ISSUE OF JUST WAGE AS DISCUSSED BY OTHER AGENCIES

Universal Declaration of Human Rights

“The right to work, to free choice of employment, to just and favorable conditions

of work, and to protection against unemployment and the right to equal pay for equalwork.”

International Convention on Economic, Social and Cultural Rights

“The right to fair wages and equal remuneration for work of equal value.”

“Equal pay for men and women workers.”

Philippine Constitution and Republic Act 6727

“That the workers are entitled to a living wage.”

The Republic Act No. 6727 or the Wage Rationalization Act declared the policy of

the State to rationalize the fixing of minimum wages and to promote productivity-

improvement and gain-sharing scheme to ensure a decent standard of living for the

workers and their families.

The National Wage and Productivity Commission (NWPC) and the Regional

Tripartite Wages and Productivity Boards (RTWPB) determine the minimum wage forFilipino workers.

FACTORS TO CONSIDER IN THE FORMULATION OF FAIR WAGES

1. External Market Factors

Refers to the supply and demand for labor and the economic conditions

and underemployment. Wages are relatively high if there is scarce supply of

labor, and the same is low if there are more opportunities for labor.

2. Laws and Regulation

Workers should be paid in accordance with laws and regulations issued by

the government. It requires that employers pay at least the minimum wage.



3. Cost of Living

Relates to basic maintenance needs and it must be seriously considered

in the formulation of wages. A fair wage should be sufficient to meet the increase

in cost of living.

4. Prevailing Industry Rate

Some claim that paying workers the average of what other companies are

paying for the same job results in a fair wage but not all companies have a

minimum wage high enough to maintain a decent standard of living.

5. Organizational Factors

Assessment on what type of industry the organization operates, the size ofthe company and the organization’s profitability to justify its ability to provide fair

wages to its workers should be considered.

6. Job Factors

The nature of the job itself entails the formulation of a just wage. Duties,

responsibilities and the skill requirements of the job are probably the most

considerable determinants of fair wage.

7. Individual Performances

Individual performances or productivity ratings affect the determination of

wage/salary increases. One who performs well in his job deserves to receive a

proportionate increase in pay.

SOME ISSUES ON JUST WAGE The minimum wage mandated by the government is not a guarantee of a just

and fair wage.

Organizations and businesses usually conclude that they are legally and morally

right when they fulfill their “mutual agreement” with the employees. It is objected

that the mutually agreed upon wages may not be advantageous to the workers.



Geographic differences hinder the formulation of a perfectly common definition of

fair wage. Some communities have a higher cost of living than others.

Wage indexation to cost of living, where wage is automatically adjusted with the

increases of cost of living, is not usually met by majority of the employers. One

valid reason is the organization’s insufficient financial resources for the obvious

fact that they too are unfavorably affected by such economic fluctuations.

Companies have different interpretations of the justifiable pay for certain job

positions, skills and tasks. Thus, the prevailing industry rate alone could not

perfectly establish a just wage.

The Law of Supply and Demand on labor, e.g., the more the supply of labor the

less the compensation given to workers.

As one of the major economic condition indicators, the inflation rate also dictatesthe formulation of just wages as it affects the prices of commodities.

Documents

The Problem of Just Wage