A. Essential Components of a Just Wage
1. Sufficient Basic Pay
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A just wage is the legitimate fruit of work… In determining fair pay, both the needs and the contributions of each person must be taken into account. Remuneration for work should guarantee humans the opportunity to provide a dignified livelihood for themselves and their family on the material, social, cultural and spiritual level, taking into account the role and the productivity of each, the state of the business, and the common good (Gaudium et Spes, #67). Agreement between the parties is not sufficient to justify morally the amount to be received in wages.
Under a Philippine law (P.D. 851), a “basic salary” is defined to include all remunerations or earnings paid by an employer to an employee for services rendered, but may not include cost-of-living-allowance, profit-sharing payments, and all allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary of the employee.
To comply with this Church teaching on just wage, the worker must receive a basic pay that is able to sustain a family of normal size in a particular country. In the Philippine, for instance, the normal family size is five. Thus the amount of pay of the breadwinner-worker, minus the income tax and other deductions, must at least correspond at least to the living wage of a particular locality. The ideal salary in CST’s criteria is one which can satisfy not only the basic necessities (food, shelter and education) but also other social, cultural and spiritual needs. It is also a salary which is sufficient to support a family of normal size without requiring one or both spouses to engage in other part-time employment or trade. This is higher than the minimum wage, and in CST’s standard, only one spouse, particularly the husband, must earn it for the family as the other spouse is tasked to supervise the children’s education and their Christian upbringing at home.
2. Social Benefits
A higher basic pay with less or no social benefits is not a just wage for the Church.
Social benefits are integral part of the wage. Aside from the amount of money that is sufficient to sustain a family of five members, the worker must also receive the mandated social benefits mandated by law or even more. Without social benefits that provide social security to the workers, a wage no matter how high is its basic pay is not just for the Church. In papal encyclical Laborem Exercens, Pope John Paul II enumerated the following as some of the social benefits a worker must receive
2.1 Health Benefits
“The expenses involved in health care, especially in the case of accidents at work, demand that medical assistance should be easily available for workers and that, as far as possible, it should be cheap or even free of charge.”
2.2 Rest and Vacation Benefits
“Another sector regarding benefits is the sector associated with the right to rest. In the first place, this involves a weekly rest comprising at least Sunday, and also a longer period of rest, namely the holiday or vacation taken once a year or possibly in several shorter periods during the year.”
2.3 Pension and Insurance Benefits
A third part of the social benefits include the right of the workers to a pension and to insurance for old age and in case of accidents in work. Employees have the right to enjoy the fruits of thier labor after retirement.
4. Humane Working Environment
In addition to social benefits, the Pope is also concerned with the humane working environment and to manufacturing processes which harm the worker’s physical health or to their moral integrity. The duty of the employer goes beyond the giving of a just wage to the worker. S/he should see it to that the working conditions are humane and conducive to health and personal well-being. The working place must be free from hazardous materials and safe to the workers.
B. Situations that Exempt Employers from Paying the Just Wage
The duty of the employer to provide the just wage to the workers is not absolute. The Church recognizes that there are basically three important situations that can Catholic entrepreneurs and employers from paying the basic components of a just salary according to the social doctrines:
1.If the business is new or just beginning to operate, especially smaller ones like sole proprietorship. Under this situation an employer maybe exempted to give beyond the legal limit or from the obligation to provide a family wage. However, whatever is due to the worker by the Labor Code must be given. In the Philippines, at least, the minimum wage and the social benefits must be given. In the long run, if the business has acquired stability and profitability, the employer is now morally obliged to give a basic pay that is higher than the minimum wage or a living wage sufficient to support a family in a given locality.
2. If the worker is hired by the employer out of charity. This happens if the employer accepts an applicant for a job even if his or her work is not needed to the business firm. It is only out of compassion and love for the poor that compels him/her to avail of worker’s services. In this case the work agreement is not strictly based on social justice but on charity. The remuneration can be considered alms. A construction worker who applies for a job even if there is no vacancy but nevertheless was admitted by the employer out of pity and concern for the poor is an example of this exempting circumstance. However, if the employee who is accepted out of charity begins to perform the work of a regular worker, that is, his or her work becomes essential to the nature of the business of the employer or replaces a regular worker because the latter is retired or retrenched, then the direct employer now has the Christian duty to pay the worker with a just wage.
3.If the business experiences financial loss or if it is not earning enough money either due to internal problems or due to societal factors such economic recession. In this case, the employer is exempted to give the just wage to the employer, though he or she may not be dispensed with what legally owed to the worker. There are indeed situations where it is for the greater good of the workers to continue to be employed with lower wages than to be terminated without employment at all.
However, this exemption must be temporary, especially if the employer is forced to choose either to retrench or reduce the number of workers to keep the business solvent or to reduce the worker’s wages to keep all the workers employed. If the business regains its profitability and stability, the employer is morally obliged to restore the original level of wages of the employees before the financial crisis or, even increase it, if doable, keeping always in mind the welfare of the workers as created in the image and likeness of God.
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