Do employers have a responsibility to provide a living wage?
In Australia, the minimum wage is set annually by a tribunal. Following the
Harvester decision over a century ago, it has been established that the minimum wage, if earned full-time, should be sufficient to allow a man to support a wife and three children in lives of "frugal comfort" and participate as a person in a civilised society. Or as Higgins put it,
"The standard of 'fair and reasonable' must therefore be something else, and I cannot think of any other standard appropriate than
the normal needs of an average employee, regarded as a human being in a civilised community. If, instead of individual bargaining, one can conceive of a collective agreement – an agreement between all the employers in a given trade on the one side, and all the employees on the other – it seems to me that the framers of the agreement would have to take as the first and dominant factor the cost of living as a civilised being. If A lets B have the use of his horses on the terms that he gives them fair and reasonable treatment, I have no doubt that it is B's duty to give them proper food and water, and such shelter and rest as they need; and, as wages are the means of obtaining commodities, surely the State in stipulating for fair and reasonable remuneration for the employees means that the wages shall be sufficient to provide these things, and clothing and
a condition of frugal comfort estimated by current human standards."
Which is to say, that workers should be treated at least as well as you would an animal. I realise that this is not a philosophy shared in all countries, but that's the standard we have here.
Of course, the setting of this number each year will have many factors. It would be reasonable, for example, to consider that a dual-income family is much more common than it was a century ago, and so the minimum wage perhaps needn't be as high because of that. There are many factors, but the welfare of businesspeople is
not the primary concern.
It is worth mentioning that Australia with twice the minimum wage of the US also has lower unemployment, and has had uninterrupted economic growth with no recessions for a quarter-century now. So a rise in minimum wage need not lead to economic collapse. Obviously minimum wages are not the only factor here. Just as obviously, doubling any cost or tax or price overnight will have bad effects. But a gradual rise - well, businesses would adapt.
