Risks and challenges of using a living wage Companies that use a living wage base system rather than basing pay on the legal or market rate may face some challenges. Living wage, which is “essentially a minimum wage based on the cost of living in a particular region” (Noe, Hollenbeck, Gerhart, and Wright, 2014) has been used instead of the legal or market rate to pay low wage employees in the hope that they will not need government assistance to supplement their income to support their family. As Grant and Trautner states “living wage ordinances are founded on the principle that an honest day's work should be rewarded by an honest day's pay, and local tax dollars should not be used to finance poverty level jobs” (2004). There may be benefits …show more content…
“Opponents of living wage ordinances argue that creating a mandatory living wage would lead to job loss, particularly among low-skill employees, resulting in wage gains for mostly higher income employees rather than the poorest employees (Bloom, 2003). The company would need to have fewer jobs available to the low-skill employees to keep costs of payroll within limits they can afford. While IKEA uses the living wage to pay their employees, to keep the costs within the range they need to keep their doors open, they may not be able to hire the same amount of personnel if they were paying the legal or market wage rate. This is a risk for IKEA by not having enough employees to have available for customer’s needs. If enough customers are unhappy with the service of IKEA, they will look elsewhere for their furniture …show more content…
Employees that are aware they are getting paid less for doing the same job as someone else, even in a different city, promotes a sense of unfairness. With the feeling of unfairness, they may not work as hard as they would normally, they may quit and find employment elsewhere. IKEA’s challenge here is to inform the employee to know about the living wage and what it is supposed to accomplish. Even though IKEA is not going to raise their prices to compensate for the increases in payroll costs, other companies that utilize the living wage rates, may not be able to. So this is a challenge that companies will face. If they raise their products or services rates too high they will no longer be competitive in their market, thus losing revenue. This may lead to unemployment for the employees or closing of the business itself because they could not meet the needs of their
(TCO A) Which of the following is most clearly an example of process innovation? (Points : 4)
In the novel To Kill a Mockingbird, by Harper Lee, there are several examples of courage between each of the characters. Harper Lee has shown throughout the novel, that many people have demons they’re fighting, in or out of the bodies or mind. By showing the characters conflicts between themselves and other people, Lee has proven that being courageous is not only physical but mentally too. Some examples of both ways is when Scout decides that she will not fight any more, Scout realising that Atticus is a lot more courageous than she thinks, and Atticus throughout the Tom Robinson case.
Living wage is a level of income that enable workers to afford basic necessity of life like shelter, food, health care and education. This is to afford any one that work full-time to live above poverty line, avoid homelessness and hunger; it’s meant to just meet basic necessities and provide buffer against emergencies or improve quality of life. It’s however disheartening to note that this basic wage has continue to be a dream for most workers in this country today; even as the companies or entities they work for makes record profits. Opponent of national living wage had cited possible job loss, capital flight in this era of globalization of capitalism, and natural forces of market as reason why implementing national living wage is a bad policy that would make the
“By increasing the cost of labor, they reduce the demand for it.” (Zwolinski 6) Businesses could suffer from the wage increase because the expectations of skill from their employees will be much higher. Most people who are unemployed are concerned that the jobs they could once apply for will no longer be an option for work because they are underprivileged. “When jobs are scarce, then immigrants, workers with few skills or little education, and those with limited Englsih proficiency are going to have a harder time convincing employers that their labor is worth $15 an hour then their better-skilled, native, English-speaking competitors.” (Zwolinksi 5) The underprivileged make up a large part of the current employment in businesses.
Imagine coming home from a nine-hour work day just to see that there's not enough for rent. There are groups of people that get under payed for the amount of work that they do. The main reason people don't increase payment is because they are scared of inflation, even though the possibility of inflation is really low. We need to raise the federal minimum wage because it currently is too low for anyone to live off of, it will be harder on smaller companies /businesses, but in the end, that still wouldn't have helped out the employees in the long run.
In the United States, the cost of living for a single adult with no children is an average of $28,474 every year (Career Trends, screen 1). This seems like a relatively low number, until the amount of people living together increases. A family of six, two adults and four children, rises to an annual cost of $82,900 (Career Trends, screen1). If an adult were to work full-time at minimum wage, they would only be getting $15,080 per year from their employer (University of California, screen 1). This amount of money is still about $14,000 short of how much it costs a single adult to live. In recent discussions of minimum wage, many people argue about whether it should be raised or not. Although the intentions to raise it are good, the outcome
Across the United States, many low skilled workers struggle to remain above the poverty line due to their small hourly wages. Some groups advocate for increased wages, but others oppose that idea because of the possibility of widespread job losses. Even though researchers have heavily analyzed the effects of a living wage in the past few years, experts claim that different kinds of studies are biased to support one viewpoint over the other. The articles “Living Wage Ordinances and Wages, Poverty, and Unemployment in US Cities,” by Benjamin Sosnaud, and “The Effects of Minimum Wages on Employment,” by David Neumark, analyze different studies about the effects of increasing the minimum wage to a living wage on a national scale. Neumark focuses his analysis mainly on different reasons why certain researchers are more biased than others. Sosnaud, on the other hand, takes studies from various cities with and without living wages from across the United States so he can compare them and draw his own conclusions about the true effects of raised wages. Even though Neumark’s points out how certain studies can be biased and invalid, Sosnaud’s evaluation of the issue based on a wide variety of research makes it very credible and gives readers a much clearer picture of nation-wide side effects.
A living wage can at least assure that a worker is being paid for basic requirements like housing, food, transportation which would help in their work and health care. According to the definition which states that the normal living wage should be good enough that not more than even 30% of his/her pay needs to be spent on living. But full-time workers were being paid the current minimum wage which would lead to incomes below the living wage in most of the areas in the country. In economical terms, that means that if a person is a full-time employee supporting his/her family of four on this current minimum wage, his/her household income would be 7000$ which is far below the poverty line. Campaigners who were in favor of raising the minimum wage to a living wage argue that doing this would give employees and their families the best chance to come out of debts and poverty stricken in the country. As an large number of employees take on lower wage work, poverty in the United States has increased: In 2005, 12.6% of Americans lived in poverty, compared to 15.7% this year (almost 50 million citizens)–the highest rate of poverty since 1965. Raising the minimum wage to a living wage would hopefully help to reverse this
What is a living wage? “A living wage is one that allows families to meet their basic needs, without public assistance, and that provides them some ability to deal with emergencies and plan ahead” (Bureau of Labor Statistics, 2014). The sole purpose of a living wage is to allow those fulltime and yearly employees/workers the means and ability to provide for their families (Clain 2012, p.315-27). This issue is not only begin debated here the United States but it is a concern around the world, whether the fair distribution of income, the level of wages and other factors are indeed affecting the standard of living for its citizens ( Clary). The minimum wage in 2014 was 24 percent below its 1968 level despite the fact that U.S. productivity more than doubled over that period and low-wage workers now have much more
A recent study at Purdue University showed that if minimum wage is increased to fifteen dollars an hour, which is what a lot of the people want, then the prices of goods will go up 4.3 percent (McClure). They also determined that if it went up to twenty-two dollars an hour then there would be a twenty-five percent increase in prices (McClure)
“The Fall of the House of Usher”, a short story by Edgar Allen Poe, follows an unnamed narrator as he rushes to the aid of Roderick Usher per his request. When the narrator arrives at the Usher’s house, he finds it in a dilapidated state with a crack running from the base of the house to the roof. The narrator finds his friend, a man whom he has known since he was young, pale and lacking the appearance of a human being. The narrator quickly comes to see some connection between his friend’s ailment and the state of his sister, Madeline. Shortly after the arrival of the narrator, Roderick’s sister dies of the illness that has plagued her for so long. However, with her death, Roderick begins to change and fear starts to close its cold hands
Amy Glasmeier (2014) came up with living wage calculator “compiling geographically specific expenditure data for food, childcare, health care, housing, transportation, and other basic necessities” (Source: http://livingwage.mit.edu/). In this section, to highlight the issue, we pick up three places across the United States. We chose places from New York State - Delhi village, Delaware County, New York; Stony Brook CDP, Suffolk County, New York and one city from Utah - Provo city, Utah County, Utah. A quick look at the minimum wage in the three areas would reveal that they share the same minimum wage of $ 7.25 per hour. However, based on the living standards, the living wage is calculated and compared. The comparison is shown in Figure 2 below. The graph clearly reveals that there is a huge variation in living wage in the three places. The living wage is as high as $13.03 in Stony Brook, NY and as low as $8.73 in Provo, UT. In spite of the variation between living wage, the minimum wage is a low $7.25 in all three places, which is even lower than the lowest living wage, in Provo, UT. An analysis with a larger number of cities would have shown the same trend across the country. Therefore, it shows that the focus should be on the living wage, not on minimum wage. Due to this disparity between living wage and minimum wage, minimum wage earners have to working double shifts or live dependent on benefits for financial support in order to have the bare
The living wage movement is an economic reform movement that has become one of the most important public policy issues that has come up within the last 10 years. Although there is no single definition, it is often defined as an hourly salary that allows working families of four to have an income that is above the federal poverty line. This means that the livable wage laws often stipulate that hourly wages should be two to three times above the federal Mininum wage. However, unlike the Mininum wage, the living wage has so far only been enacted on the county and city level. Cities and counties enforce the living wage for companies that have contracts with their respective cities and counties, receive subsidies
Today we live in a society that tells us what and when we can do it, with the complex of living in the United States which is supposed to be the land of the free. The cost of living now these days have put those who only make minimum wage in poverty stricken situations, which now they have no choice but to depend on the government to live. We either have to lower the cost of living so that people can live a somewhat sustainable life, or raise the minimum wage so that we can afford the cost of living that is provided to us.
IKEA promotes equality among co-workers. Its employees cooperate on the principles of honesty, faith and integrity. IKEA believes that each employee deserves careful and respectful attitude. The company takes into account the needs of individuals within the organization and creates the environment of respect, trust and support. Consequently, one of the features of IKEA’s corporate