Introducing the

Just Wage
Initiative

Just Wage Forum 2021

Criterion 1: Wage enables decent life for worker and household

A just wage covers the basics necessary for a minimally decent life for a worker and the worker’s household, including hours of work that are predictable, not excessive, and provide regular rest to facilitate a decent life away from work. Further, a just wage rests upon a healthy and safe working environment mitigating stress and facilitating flourishing, providing paid time off in the form of personal days, vacation, and in times of sickness of the worker or another household member. Ultimately, a just wage provides resources, in the form of both pay and time, that foster the worker’s self-development socially, culturally, and spiritually.

Wage enables decent life for worker and household

 

There are several ways to approach the question of what workplace scenarios promote a decent life for workers.

In the first place, unionized workplaces -- by giving workers a collective voice to press their interests upon their employers -- foster policies and protections that promote a decent life for workers and their households. In the absence of strong legal protections for workers in the US (see “What is the law?”), collective bargaining agreements secure higher wages, benefits such as paid vacations and health care insurance, and protections from arbitrary or unfair dismissal or discrimination. Further, according to a recent study by two political scientists, union membership increases workers’ life satisfaction across incomes and demographic lines.

As a 2020 Economic Policy Institute report concludes, unionized workers earn 11.2% more in wages than nonunionized peers, while workers of color see an even bigger boost versus their nonunionized peers: unionized Black workers earn 13.7% more, while Hispanic workers are paid 20.1% more. (For an in-depth look at the union impact in one state, see the UC-Berkeley Labor Center’s three-part series from 2018.)

Of course, since the unionization rate in the USA is so low (only 10.8% in 2020, according to the Bureau of Labor Statistics) the power of unions to shape wages and benefits in the broader economy is now much smaller than it was during the post-World War II decades. With the rapid decline of unions since the 1970s, American workers have experienced relatively flat wages in spite of continuing productivity gains, leading to an alarming increase in income and wealth inequality only exacerbated by the COVID-19 pandemic.

In an attempt to counter this national erosion of labor standards, many local and state governments have begun to address pressing problems such as low pay, lack of paid time off, and inconsistent hours. Twenty-four states, for example, have raised their minimum wage in 2021, with California, Washington, and Massachusetts leading the pack; at the city level, Seattle’s $15.45/hour will also fully take effect in 2021.

In terms of paid time off, in 2006 San Francisco was the first city to enact a mandatory, if limited, paid sick leave policy for all employers; other local jurisdictions have followed. Meanwhile, cities like New York and Philadelphia have passed predictive scheduling ordinances requiring employers to give hourly workers more regularized schedules, helping workers achieve better work-life balance. Each of these local efforts has faced massive employer opposition, and it remains unclear whether a patchwork of competing employment regimes will provide the opening wedge for the creation of a national framework of stronger worker protections, as state innovations in the Progressive Era did for the national New Deal laws that came in the 1930s.

Last but not least, there are employers who go beyond the requirements of law and consider it a priority to promote policies that foster a decent life for their employees. Zeynep Ton, Professor of the Practice at the MIT Sloan School of Management, has been at the forefront of pushing companies to adopt a “good jobs” strategy, arguing that a workforce should be seen as an asset to invest in rather than a cost to minimize.

Focusing in particular on retail, a sector notorious for low wages, poor benefits, and high turnover, Ton has identified exemplary businesses who offer workers “much better jobs than their competitors, all the while keeping their prices low and performing well in all the ways that matter to any business. They have high productivity, great customer service, healthy growth, and excellent returns to their investors. They compete head-on with companies that spend far less on their employees, and they win.” Costco, for example, stands out amongst retail giants, as workers there earn significantly more than counterparts at competitors, while internal job ladders create opportunities for promotion that keep labor turnover very low.

On the one hand, the businesses Ton highlights -- from Costco to Trader Joe’s to Quik Trip -- seem to point toward a path of employer-sponsored policies fostering better conditions for workers. On the other hand, many of these same companies strongly resist unionization, a surer pathway toward workers gaining a decent life. Meanwhile, the global supply chains providing these American retailers with low-cost goods remain hidden from customers’ view, raising urgent questions about the workers, mostly abroad, who are also deserving of protections and empowerment enabling them to live a decent life.

 

This page was last updated on November 22, 2021. It was written by Dan Graff, Emily Merola, Edward Prein, and Anastasia Reisinger.

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