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Employers Should Not Exploit Minimum Wage Employees

By: Green Panda | Date posted: January 10, 2008 (5:08 pm) | Write a Comment (6 Comments)

Now that I’m out of school, I find myself thinking more about school. *Sighs* Sad, but true. I have short essay I wrote for my business ethics class I wanted to share. The textbook is Honest Work: A Business Ethics Reader by Joanne B. Cuilla.

I left it pretty much in tact. Please don’t expect a profound answer. What would you do if you were a CEO? What if you were a minimum wage worker here in the United States or in a different country? The class had a good discussion and I thought maybe I would just throw this out there.

Photo Credit: Saad.

The question posed in Ciulla’s essay on ‘Exploitation of Need’ asked, “Is any kind of work or any set of working conditions okay as long as a person freely chooses it?” (Text p. 205)  Can employers justify demeaning working conditions for its minimum wage employees if they can legally leave? What if they don’t have a real choice in the matter, as the job is the sole source of income for their existence? Just considering the current economic climate in some parts of the United States, it is a valid question as employers are offering less and less jobs in certain industries.

John Locke made the observation that the kings do not have a right over the natural rights of freedom and property. Kings justified that they offer protection for their subjects in exchange for them giving away some freedoms (Text p. 205). Adam Smith remarked that employees lose freedoms to gain monetary compensation. People go to work where they bosses tell them, work when they are assigned, and even schedule their vacation time around what the job approves.

Ciualla notes that in contrast to Smith’s idea of pay is related to freedoms lost, people who get paid the most typically have the most freedoms (Text p.207). People who have their freedoms restricted to a high degree, such as a Wal-Mart employee are some of the lowest paid employees in the retail area.

Wal-Mart has a reputation for limiting their employees’ freedom and pay. Latin Trade (Text p. 204) points out that it has sales that are greater than many countries entire economies, yet it on a mission to find the lowest cost workers. Frontline produced a show that claimed that Wal-Mart engaged in practices that kept part-time employees from receiving medical benefits and more work hours.

Is Wal-Mart justified to keep their methods in tact simply because employees can quit at any time?

What about countries where unemployment is far higher than the United States? Do employees really have a choice when it comes to employment or is the choice made under duress? Or are people choosing these jobs because it means not being homeless or starving?

Peter Singer estimates that 400 million people face the inhumane condition of hunger (Text p.210). Employers in countries where poverty is rampant hold an unnatural influence over its employees. After all, they can leave at any time, but how will they support their family?

Using Singer’s argument that we are under obligation to assist, employers have to consider improving the standards of their workplaces and practices. They are not obligated to pay their employees an amount that would make them go bankrupt, but they have to pay a living wage. They have to pay an amount that an employee under their care that will pay for shelter, food, and clothing. In the United States, employees would have to be paid enough to match the cost of living. Certain localities in the America are notorious for sky high shelter expenses (New York City, Chicago, and San Francisco as examples). Paying an employee $5.15/hour and little to no benefits in such an environment is exploitation in a practical sense.

An ethical company has to consider this as they develop their compensation plans. They can not have it both ways: quality employees at the lowest cost. There has to be a sacrifice on their part. Lower profits for the short term can boost employee morale, which in turn, can lead to better customer service which can lead to more loyalty from customers and employees. Employers have an obligation to not exploit their employees.

This essay is not meant to bash Wal-Mart. It’s just an example of a global company’s power over its workers.

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6 Comments
  1. Comment by Mrs. Micah — January 10, 2008 @ 7:50 pm

    Wages and employment bother me…things just don’t seem like a fair exchange.

  2. Comment by Green Panda — January 11, 2008 @ 10:15 am

    It doesn’t seem like that especially when it’s the lower paid employees who bear the brunt of the sacrifices.

  3. Comment by Blue Panda — January 11, 2008 @ 11:57 am

    After doing a quick Google search on “high employee turnover,” I’m not even sure companies really want to use the defense that the “employees can leave at any time.”

    Obviously, each employee that quits means a new employee must be trained. But, in addition, the new employee will likely provide lower-quality customer service than a veteran employee. (This could translate to lost sales or longer lines at cash registers, for example.)

    Further, if the employees want to quit (but can’t at the moment), then the reduced morale will also reduce the quality of customer service.

    Of course, nobody goes to Wal-Mart for customer service (the receipt check when leaving is outright insulting, even if I know why they do it); everybody goes for the low prices. Wal-Mart probably sees no financial incentive to treat its employees better.

  4. Comment by Green Panda — January 11, 2008 @ 7:46 pm

    Thanks Blue Panda!

  5. Comment by Debt Free Revolution — January 12, 2008 @ 12:47 pm

    Just for the record, federal minimum wage here in the United States is now $5.85/hr as of July 2007. We were all happy about it over the summer LOL because that was about the only way we got a raise when I worked for Domino’s.

  6. Comment by Green Panda — January 12, 2008 @ 12:59 pm

    DFR: Yeah, I missed that update. Thanks for putting that in.

    While $5.85 is better than the $4.75 I was making, it still is not enough to really live on. What stunk was 1/2 my paycheck then went to the family. :( Being responsible can be a pain.

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