The Wages of Sin. So read the front page splash on yesterday’s issue of The Sun newspaper whose reporters found the Church of England doesn’t always practice what it preaches when it comes to paying staff the hourly Living Wage. The headline is obviously a bit rich coming from a red top tabloid that for almost half a century has profited as a purveyor of insidious soft porn. But the story highlights one of many issues that stem from advocacy of this particular change in employer practice.
I have no problem whatsoever in church people calling for higher wages for the working poor. On the contrary, Catholic Social Teaching provides a central plank of my own personal ideology and I’ve always tried my best to apply such principles as the Common Good or The Just Wage whenever considering public policy issues. However, it’s important to put specific calls in their complete economic, social and moral context so as to avoid being tripped up by the law of unintended consequences.
It’s inevitable that some cash strapped church organisations will struggle to pay workers the Living Wage right away, despite the best of intentions. But more to the point before deciding if this is something they or similarly placed organisations in all sectors of the economy should be told to aspire to we need to know how they will foot the bill.
Although it’s often asserted that the Living Wage in effect pays for itself because the workers who benefit from it will somehow become more productive there is little or no evidence to support this. Ultimately therefore something has to give. The common implicit assumption is that the cost of paying the Living Wage is met out of organisational profit or surplus. If not, which is likely to be the case in organisations operating on very tight margins where low pay is most prevalent, the news is less good for workers. The outcome could be fewer jobs albeit research on the effects of big minimum wage hikes indicates that employers tend instead to cut hours of work or if possible trim other parts of the overall reward package. Either way, a substantial increase in the hourly pay rate runs a substantial risk of being offset by a reduction in workers weekly income, especially if the result is lower employment which leaves some people with no income at all.
Payment of the Living Wage is therefore only a very partial guide to whether a Living Wage employer is a ‘good employer’ or whether a general shift of employer practice in this direction furthers the Common Good. One can see why the Church of England and others wish to see better terms and conditions for working people but when it comes to the realm of work the test of the Common Good does not rest on the Living Wage alone.