Is It Ethically Acceptable for Companies to Employ Very Low Wage Labor?

Topics: Employment, Wage, Minimum wage Pages: 2 (554 words) Published: May 8, 2012
Critical Reasoning BSB10177-5 – PDP Assignment

Is it ethically acceptable for companies to employ very low wage labor?

On the subject of low wage, Companies employ its staff on low salary for specific reasons. A low wage is sometime misinterpreted as minimum wage, but a low wage means a salary that stands just above minimum. Low wage labor is role played in many firms today but why, the assignment will talk about why companies pay some staff a low or minimum wage. Low salary’s is what most companies prefer because by implementing minimal wage into the business the company has an advantage of making a greater net capital. Salary is also affected by other examples such as skill and experience. Most highly paid jobs require expertise and qualifications. This can differentiate the salary gap between skilled and unskilled jobs. However some minimum wages jobs don’t require much skill therefor are set at a lower pay rate. Candidates with more qualifications can stand out to others and are more likely to obtain a high paid job but other candidates with little skill in most cases find is hard to obtain a good job. Cited in McGraw’s academic textbook. First, there exist productivity differences among workers. The greater these productivity differences, the more unequal the wage distribution will be. Second, the rate of return to skills will vary across labor markets and over time, responding to the changes in the supply and demand for skills. The greater the reward for skills, the greater the wage gap between skilled and unskilled workers, and the more unequal distribution of income. McGraw/Irwin, 2000, P.284

Furthermore, recession adds a great effect on the world of work from a salary point of view. Due to the recession many companies have decreased the annual salary and no only this, they have also cut down on a number of employee and squeeze every last penny even if it leaves millions jobless. By cutting down jobs and decreasing wages companies can...

References: McGraw-Hill/Irwin, (2000). Labor Economics, New York: The McGraw-Hill Companies Inc.
CREDIT Union National Association, CUNA, (27th August 2009) Recession Batters Wage Increases. Business Source Premier Volume 35 Issue 13 p.8-8 http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=43374401&site=ehost-live [17/10/2011]
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