A business issue of your choosing that has ethical implications

Economic and Social Benefits: Proponents argue that a living wage is not just a moral good but a sound business practice and a benefit to society. Higher wages can lead to increased employee morale, productivity, and loyalty, which in turn can reduce costly employee turnover and training expenses. Furthermore, a living wage can stimulate local economies by increasing the purchasing power of low-wage workers, leading to higher consumer demand.

Reduced Public Costs: When businesses do not pay a living wage, the burden of supporting low-wage workers often falls on taxpayers through public assistance programs like food stamps and housing subsidies. By paying a living wage, companies can reduce the need for these government programs, shifting the responsibility from the public to the private sector.

Arguments Against a Living Wage

Opponents of a living wage often frame their arguments within the context of economic theory, market dynamics, and business viability. Their primary concerns are:

Market Distortion and Economic Harm: The main argument against a living wage is that it interferes with the natural laws of supply and demand in a free market. If a wage is artificially set above the market equilibrium, it could lead to job losses as businesses reduce staff or hours to offset higher labor costs. This is particularly concerning for small businesses with thin profit margins. Critics argue that a living wage could result in higher unemployment, especially among low-skilled workers.

Inflation and Price Increases: To cover the increased cost of labor, businesses may be forced to raise prices on their goods and services. This can lead to inflation, which in turn erodes the purchasing power of all consumers, potentially negating the benefits of the wage increase for the very people it was intended to help.

Loss of Competitive Advantage: If a company voluntarily pays a living wage while its competitors do not, it may find itself at a significant cost disadvantage. This could jeopardize its ability to compete in the market, potentially leading to a loss of market share or even business failure.

Sample Answer

Business Ethics: The Debate Over a Living Wage

The ethical issue of paying a living wage is a complex and highly debated topic in business ethics. It centers on whether a company has a moral obligation to pay its employees a wage that is sufficient to cover their basic needs and provide for a decent quality of life, regardless of market forces or the legally mandated minimum wage. This issue involves a clash between two primary ethical frameworks: a human-centered, social responsibility perspective and a market-driven, shareholder-centric perspective.

Arguments For a Living Wage

Proponents of a living wage argue that it is a fundamental human right. This perspective is often rooted in the idea that every worker, for their labor, should be able to afford a dignified existence for themselves and their family. The core arguments include:

Ethical Obligation and Human Dignity: This is the central moral argument. From a Kantian or a rights-based perspective, a business has a duty to not exploit workers. A wage that forces a person to live in poverty, even while working full-time, is considered an injustice that violates their dignity and right to a reasonable standard of living. International agreements, such as the Universal Declaration of Human Rights, support this view, stating that everyone who works has the right to "just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity."