In the United States and some other developed economies, wages for the least well paid are too low. A mandatory living wage is the best way to redress this injustice.
The idea of minimum wages is well accepted, but the American $7.25 an hour does not meet the simple standard of providing enough to support the worker who earns it. For an adult in New York State, self-support requires 55 percent more, $11.25 an hour in a full-time job, according to The MIT Living Wage Calculator. And a just minimum should really be enough to raise a family – something closer to the $23.58 an hour required to support a single wage-earner with one child.
The minimum wage is one part of the remarkably complex pay system found in all developed industrial societies. Economists often suggest that wages are determined by market forces, the supply and demand for labour, and by employers’ calculations of the value of labour. But actual wages influence both the market and the perceived value of labour. It is more accurate to include market forces and economic value somewhere in the middle of the long list of factors which contribute to the ever-shifting social agreement on pay levels. This agreement is established in the mysterious way that all social orders are built – the powerful push, the weak resist, traditions are followed and evolve, justice is respected and flouted, market forces and economic calculations nudge.
By far the most important factor in determining pay is the social judgment of value. The main reason that bankers, advertising executives and doctors are paid more than teachers, childcare workers and street cleaners is that society values the former more than the latter. And the main reason that the minimum-wage jobs pay too little to support a family is that society has agreed that is what such labour is worth. This is an injustice, because honest labour should always be rewarded with enough to live a decent life.
To be fair, the social judgment of these occupations is less harsh than the pay level suggests. The very poorly paid usually receive welfare benefits from the government, either in cash or in the form of free or cut-price services. It is an awkward arrangement, but unavoidable in societies which have decided that pay should be determined by the job but spending power should be determined, at least in part, by needs and family situation. That division will exist as long as family breadwinners do not receive special pay status.