In the last couple of weeks ,there has been an interesting discussion concerning the Catholic Church proposal to improve wage conditions for those who earn below U$$ 300.Average Latin America low wages are probably below U$$ 200 or even less than that amount.-
The issue itself has two different angles . First the Catholic Church role within the Chilean society, and secondly, the real dimension for firms of being efficient ,and at the same time being fair.-
Catholic Church has been decisive in modern Chilean history and Latin America as well. The `1964-2005 period , has been quite active for Church involvement in daily life affairs .In the sixties and the seventies, it supported social changes, in the seventies and eighties fought against human rights violation, in the nineties tried to protect key values such as family (divorce discussion)and life(abortion discussion).Although a brief look ,it is sufficient to realize the important role Catholic Church has had in Chilean society. Therefore it is not a new situation that politicians, economist and business leader, must listen the Church on these matters. On the other hand, on environment protection issues ,the Catholic Church role has been less decisive.
It follows that the Church preferences are toward living conditions and human dignity ,no matter whether it is from the material or spiritual point of view. On this regard there has been a strong emphasis on the influence of different actors on Chilean economic transformation process, but few attention has been given to the way the Church also helped to shape it. Somehow the Church feels it is their right to speak out, when it believes must do so.,
Secondly. The issue of the real dimension for firms of being efficient and its implication for wages. Marginal productivity theory says, that each firm will hire inputs (knowledge, labour services, capital flows)up to the point where its contribution to production (productivity) is equal to its cost (payment). Firms pay wages according to productivity .The higher the productivity ,the higher the wages paid That is the market ethic to solve the problem of hiring one applicant, despite others ready to work in the same job. Therefore from the ethical point of view, an ethical wage is the one connected to productivity otherwise, the firm is not longer capable of keeping the pace of competition. Thus , the problem is how to improve productivity, as a condition to increase wages
On the other hand, given the fact that not all of the labour force have the same abilities and skills for the same job , there will be productivity dispersion ,and so a wage dispersion. Those with lower productivity are the ones part of the problem , because their wages could be below certain minimum level, such as that to avoid this effect, most countries have a minimum wage law. Empirical evidence, however shows that such minimum wage laws means higher unemployment for young people, women and the elderly looking for job opportunities.
Thus the real issue is to raise ethical income level. From the firm stand point , training opportunities, production goals bonus ,and performance bonus are the way each worker can increase his incomes to a higher level ,but it seems that to get an ethic standard is more an issue and a moral obligation for society and its values as a whole.. Increasing facilities for starting new business, better education, unemployment insurance, labour market information ,helps to creates a better condition for improving living conditions This is so, because society must apply public and social policies aimed at improving the standard of living, but at the same time without hurting the proper incentives for economic growth . Otherwise , this would mean an ethical failure for society .-