THE ISSUE OF FAIR WAGE

Dragoº Bãžgu

Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, 2013, vol. 7, issue 1, 187-193

Abstract: In this paper we examine how the employees’ wages can be evaluated as fair or unfair. In the first part we make a distinction between two approaches to the problem: the bargaining-based approach, focused on he process by which wages are set and, the comparison-based approach, focused on the evaluation of the wage differential between two jobs. In the second part, we show the limitations of the second approach. We examine how the employees’ wages should be set. Firstly, we show that some factors that are not related to employees’ merit can influence the wage level and this is not unfair. Secondly, we argue that the comparison to the prevailing wage in the industry is not a necessary ethical standard. Instead, we argue that wages should be set according to employees’ contribution to business objectives. In the end, we discuss in detail this principle.

Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:rom:mancon:v:7:y:2013:i:1:p:187-193

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