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Just Wage Forum 2021

Criterion 5: Wage is not Excessive

A just wage is not excessive. Within an organization, a just wage structure features a policy inhibiting extreme inequality between the highest and lowest earners; it promotes the sustainability of the enterprise in the long-term interests of all stakeholders. More broadly, a just wage exhibits proportionality within a wider economic community.

What does CST say about non-excessive wages?

“In determining the amount of the wage, the condition of a business and of the one carrying it on must also be taken into account; for it would be unjust to demand excessive wages which a business cannot stand without its ruin and consequent calamity to the workers. If, however, a business makes too little money, because of lack of energy or lack of initiative or because of indifference to technical and economic progress, that must not be regarded a just reason for reducing the compensation of the workers. But if the business in question is not making enough money to pay the workers an equitable wage because it is being crushed by unjust burdens or forced to sell its product at less than a just price, those who are thus the cause of the injury are guilty of grave wrong, for they deprive workers of their just wage and force them under the pinch of necessity to accept a wage less than fair.”
-- Pope Pius XI, Quadragesimo Anno (1931), 72

“Lastly, the amount of the pay must be adjusted to the public economic good. We have shown above how much it helps the common good for workers and other employees, by setting aside some part of their income which remains after necessary expenditures, to attain gradually to the possession of a moderate amount of wealth. But another point, scarcely less important, and especially vital in our times, must not be overlooked: namely, that the opportunity to work be provided to those who are able and willing to work. This opportunity depends largely on the wage and salary rate, which can help as long as it is kept within proper limits, but which on the other hand can be an obstacle if it exceeds these limits. For everyone knows that an excessive lowering of wages, or their increase beyond due measure, causes unemployment. This evil, indeed, especially as we see it prolonged and injuring so many during the years of Our Pontificate, has plunged workers into misery and temptations, ruined the prosperity of nations, and put in jeopardy the public order, peace, and tranquillity of the whole world. Hence it is contrary to social justice when, for the sake of personal gain and without regard for the common good, wages and salaries are excessively lowered or raised; and this same social justice demands that wages and salaries be so managed, through agreement of plans and wills, in so far as can be done, as to offer to the greatest possible number the opportunity of getting work and obtaining suitable means of livelihood.”
-- Pope Pius XI, Quadragesimo Anno (1931), 74

“A right proportion among wages and salaries also contributes directly to the same result; and with this is closely connected a right proportion in the prices at which the goods are sold that are produced by the various occupations, such as agriculture, manufacturing, and others. If all these relations are properly maintained, the various occupations will combine and coalesce into, as it were, a single body and like members of the body mutually aid and complete one another. For then only will the social economy be rightly established and attain its purposes when all and each are supplied with all the goods that the wealth and resources of nature, technical achievement, and the social organization of economic life can furnish. And these goods ought indeed to be enough both to meet the demands of necessity and decent comfort and to advance people to that happier and fuller condition of life which, when it is wisely cared for, is not only no hindrance to virtue but helps it greatly.”
-- Pope Pius XI, Quadragesimo Anno (1931), 75

“Furthermore, it is the right of public authority to prevent anyone from abusing his private property to the detriment of the common good. By its very nature private property has a social quality which is based on the law of the common destination of earthly goods. If this social quality is overlooked, property often becomes an occasion of passionate desires for wealth and serious disturbances, so that a pretext is given to the attackers for calling the right itself into question.”
-- Pope Paul XI, Gaudium et Spes (1965), 71

“In economically developed countries, relatively unimportant services, and services of doubtful value, frequently carry a disproportionately high rate of remuneration, while the diligent and profitable work of whole classes of honest, hard-working men gets scant reward. Their rate of pay is quite inadequate to meet the basic needs of life. It in no way corresponds to the contribution they make to the good of the community, to the profits of the company for which they work, and to the general national economy.
    We therefore consider it Our duty to reaffirm that the remuneration of work is not something that can be left to the laws of the marketplace; nor should it be a decision left to the will of the more powerful. It must be determined in accordance with justice and equity; which means that workers must be paid a wage which allows them to live a truly human life and to fulfill their family obligations in a worthy manner.”
-- Pope John XXIII, Mater et Magistra (1961), 70-71

“Today's international economic scene, marked by grave deviations and failures, requires a profoundly new way of understanding business enterprise. Old models are disappearing, but promising new ones are taking shape on the horizon. Without doubt, one of the greatest risks for businesses is that they are almost exclusively answerable to their investors, thereby limiting their social value. Owing to their growth in scale and the need for more and more capital, it is becoming increasingly rare for business enterprises to be in the hands of a stable director who feels responsible in the long term, not just the short term, for the life and the results of his company, and it is becoming increasingly rare for businesses to depend on a single territory. Moreover, the so-called outsourcing of production can weaken the company's sense of responsibility towards the stakeholders — namely the workers, the suppliers, the consumers, the natural environment and broader society — in favour of the shareholders, who are not tied to a specific geographical area and who therefore enjoy extraordinary mobility. Today's international capital market offers great freedom of action. Yet there is also increasing awareness of the need for greater social responsibility on the part of business. … What should be avoided is a speculative use of financial resources that yields to the temptation of seeking only short-term profit, without regard for the long-term sustainability of the enterprise, its benefit to the real economy and attention to the advancement, in suitable and appropriate ways, of further economic initiatives in countries in need of development.”
-- Pope Benedict XVI, Caritas in Veritate (2009), 40

 

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