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Moral Sentiments and the Minimum Wage

Published online by Cambridge University Press:  01 January 2023

David H. Plowman  and
Chris Perryer
David H. Plowman
Affiliation:
The University of Western Australia Business School
Chris Perryer
Affiliation:
The University of Western Australia Business School
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Abstract

Adam Smith is widely regarded as the father of political economics, and as one who provided the philosophical underpinnings of much of neoclassical economics. Since the mid-1970s there has been renewed interest in, and reinterpretation of, Smith’s work. This paper looks at two aspects of this reinterpretation, the first of which is Smith’s writing on wages. Smith was an advocate of high wages, a view that strongly contrasted with the received wisdom of the day. He considered that a wage which provided for a reasonable standard of living was essential for the development of an economy. The second aspect encompasses Smith’s notion of the subsistence wage which traces its historic lineage to the Greek philosophers. The paper concludes that Smith, the champion of ‘liberty’ and non-government interference in markets, would probably have supported the notion of minimum wages, such as are now mandated in the United Kingdom, the United States and Australia. Nevertheless, the mandating of minimum wages is a necessary but not a sufficient condition for the achievement of living wage outcomes.

Keywords

Economicsmoral sentimentminimum wageliving wagewage principlesB10J31J38
Type
Article
Information
The Economic and Labour Relations Review , Volume 21 , Issue 2 , December 2010 , pp. 1 - 21
Copyright
Copyright © The Author(s) 2010

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Footnotes

1.

The authors would like to thank the journal’s anonymous referees for helpful comments.

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