I believe in a fair wage. That is, I believe workers should earn for their labour sufficient money to pay for food, shelter, education, transport, sanitation, etc. etc.

I figure most people would be quite happy to agree with me that a fair wage is a basic right for all workers across the globe, though sadly it is a right that often isn’t recieved.

The bit where people are less likely to agree with me is the further extrapolation of this basic concept. Within any economy there is finite capital in circulation, and thus if it is unfair for any one person to receive less then a fair wage, then it is also unfair for any one person to receive a wage so high that it prevents others from receiving a basic fair wage.

The most obvious contrast to point out is a hypothetical transnational textile corporation, with the CEO earning in excess of US$ 1 million per annum whilst the factory labourers in Bangladesh are earning US$ 500 per annum (which, mind you, is above the legal minimum wage of US$ 300 per annum, which again is still higher then what many workers actually receive). The CEO is earning maybe $US 320 for an hours work in a 60 hour week (nobody’s suggesting CEO’s don’t work extremely hard), but the factory worker is earning US$ 0.17 for an hour’s work in an equivalent 60 hour week.

Do you get my point here? There’s a point where the pay for an hour’s labour is too low, but I also propose that there is a point where the pay for an hour’s labour is too high (not because abundance is wrong, but because selfish hoarding that causes another person to go without is wrong).

And now, we turn our attention to interest. The idea of ‘dead money’ is anathema to capitalism – no matter what, your money should be ‘working for you’. I think this is a brilliant expression, because it communicates the fact that capital that is earning interest is earning profit for labour that you yourself are not actually performing. When your capital earns interest, you are, in essence, receiving a profit without ‘earning’ it through a labour input.

As such, I suggest that earning interest from investments is actually an unfair wage – it is money that we haven’t actually worked for. Whatever a fair wage for an hours work is – be it US$ 0.17 or US$ 320 or anything in between, a fair wage for zero work is still zero.

Now, my brother is a property investor, and I guess that what he would point out right now is that he does input labour from which he is earning a profit. He works many hours a week in order to earn from his investments. This is not what I’m arguing against (though I would still ask the question of whether the quantity of money he earns from an hour’s labour is a fair wage). What I am arguing against is the $8 my bank gave me for investing $1000 in a 3 month term deposit. For literally 5 minutes work (filling out a single form) I received $8. That’s $96 for an hours work. And if I leave that money there, with absolutely zero labour input from now on, that term deposit will keep on rolling over and accumulating. After a year it will be $32 for that same 5 minute’s work ($384 for an hour’s work – more then what the corporate CEO is earning).

I know that I’ve over-simplified things here. I know that there are a million and one other factors and influences and mechanics and inflations and equivalences and equities and market influences and whatever else that I haven’t taken into consideration. But what I’ve illustrated in simple form is a simple concept. Is that a fair wage?

I suggest that it is not.

And just so you know that I practice what I preach, every cent of interest I’ve earned from my bank over the past 2 years I’ve given straight towards 3^rd world community development.

The next question I have to wrestle with: What do I think/do about superannuation? My very culture is dependant on a retirement ‘nest egg’ because we are no longer a culture that values economic support of our elderly. Can I justify receiving profits from interest earned by my superannuation? Can I justify being an economic burden on my children and/or welfare support when I have the capacity not to be?

Posted by Scott @ 3:07 PM