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Desiree R.

de la Rosa

WORK AND COMPENSATION
Work is said to be for the purpose of obtaining economic gain for the laborer
and is directed to the promotion of life. Being compensated for a work done or for
services rendered is part of the essence of work. One is willing to work in exchange for
remuneration or rewards which may include both financial and non-financial
compensation. It can be in the form of wages, shares on profit, harvest or commercial
goods, in-kind payments, and other remunerative fringe benefits.
The main objective of compensation is to create a system of reward that is
equitable to the employer and employee. The general concern is that justice should be
a substance of compensation.
TYPES
OF
WAGES
FAMILY WAGE
The amount of
money that the
worker needs to
provide for the
needs of the
family. LIVING WAGES
The minimum
hourly wage
necessary for a
person to achieve
some specific
standard of living.
MINIMUM
WAGE
The minimum
rate a worker can
legally be paid as
set by the statute
or government.
JUST WAGE
The remuneration
which is enough
to support the
wage-earner in
reasonable and
frugal comfort.
REAL WAGES
measured in
terms of actual
purchasing
power (inflation).
NOMINAL
WAGES
measured in
terms of money
paid, not in
purchasing
power.

THE QUESTION OF JUST WAGE
A just wage is defined as that remuneration which is enough to support the
wage-earner in reasonable and frugal comfort. The Catholic Church teaches us that a
just wage is the legitimate fruit of labor.

THE TEACHINGS OF THE CATHOLIC CHURCH ON WAGES
The question of just wages has played a dominant role in the teachings of five
popes. Guidelines for just compensation, according to their beliefs, were poetically
expressed in their apostolic writings.

Rerum Novarum
Also known as the Capital and Labor, in it,
Pope Leo XIII addressed what he termed the
misery and wretchedness pressing unjustly upon
the majority of the working class. The pope
wrote, Members of the working classes are
citizens by nature and has the same rights as the
rich. Pope Leo did not attempt to calculate a just
wage. He simply decried the philosophy
widespread then and today that the marketplace
alone should set wage structures.

Rerum Novarum is one of the most impassioned treatises ever written by a pope
on the sacredness of work and the dignity of the working person. Pope John XXIII
rightly called it the Magna Carta for Social Reconstruction.
Quadragesimo Anno (On the Reconstruction of the Social Order)

An encyclical written by Pope Pius XI that
advocated the minimum wage. Pope Pius XI
introduced profit sharing and giving workers a
say in a companys management. Echoing
Pope Leo XIIIs previous encyclical, he insisted
that heads of families should receive a wage
sufficient enough to meet the ordinary family
needs. From this, he developed the concept of
family wage.



Mater et Magistra
Popes John XXIII and Paul VI wrote this encyclical
(Mother and Teacher) in 1961, which adopted and
affirmed the teachings of the previous social documents. It
also focused the worlds attention to the worldwide
problem of the widening gap between the rich and the
poor, the arms race and the plight of farmers.


Laborem Exercens
Issued by Pope John Paul II in 1981, this encyclical letter discussed the modern
perspectives and problems of human work and the duties of the members of the church
towards it.
Pope John Paul II offered a detailed
assessment of what constitutes just compensation,
declaring that workers have fundamental rights
to health-care insurance, suitable working
conditions and rest periods. The disabled he says,
should receive job training, and migrant workers
should have special protections.
In addition, the pope also argued that wages
should be sufficient so that women with children
arent forced to work so that it should be possible for a
mother to devote herself entirely to her children.

Centesimus Annus
On the 100
th
anniversary of Rerum Novarum, Pope John Paul II stated that
Society and State must ensure wage levels adequate for the maintenance of the
worker and his family, including a certain amount for savings.
The right to a just wage, which cannot be left to the free consent of the parties,
so that the employer, having paid what was agreed upon, has done his part and
seemingly is not called upon to do anything beyond.
Catholic Bishops Conference of the Philippines (CBCP): On Social Justice
It stated that remuneration for work should guarantee man the opportunity to
provide a dignified livelihood for himself and his family on the material, social, cultural,
and spiritual level, taking into account the role and productivity of each, the state of
business, and the common good.
Workers deserve a family wage not in charity merely, but as duty to social
justice.


THE ISSUE OF JUST WAGE AS DISCUSSED BY OTHER AGENCIES
Universal Declaration of Human Rights
The right to work, to free choice of employment, to just and favorable conditions
of work, and to protection against unemployment and the right to equal pay for equal
work.
International Convention on Economic, Social and Cultural Rights
The right to fair wages and equal remuneration for work of equal value.
Equal pay for men and women workers.
Philippine Constitution and Republic Act 6727
That the workers are entitled to a living wage.
The Republic Act No. 6727 or the Wage Rationalization Act declared the policy of
the State to rationalize the fixing of minimum wages and to promote productivity-
improvement and gain-sharing scheme to ensure a decent standard of living for the
workers and their families.
The National Wage and Productivity Commission (NWPC) and the Regional
Tripartite Wages and Productivity Boards (RTWPB) determine the minimum wage for
Filipino workers.

FACTORS TO CONSIDER IN THE FORMULATION OF FAIR WAGES
1. External Market Factors
Refers to the supply and demand for labor and the economic conditions
and underemployment. Wages are relatively high if there is scarce supply of
labor, and the same is low if there are more opportunities for labor.

2. Laws and Regulation
Workers should be paid in accordance with laws and regulations issued by
the government. It requires that employers pay at least the minimum wage.

3. Cost of Living
Relates to basic maintenance needs and it must be seriously considered
in the formulation of wages. A fair wage should be sufficient to meet the increase
in cost of living.

4. Prevailing Industry Rate
Some claim that paying workers the average of what other companies are
paying for the same job results in a fair wage but not all companies have a
minimum wage high enough to maintain a decent standard of living.

5. Organizational Factors
Assessment on what type of industry the organization operates, the size of
the company and the organizations profitability to justify its ability to provide fair
wages to its workers should be considered.

6. Job Factors
The nature of the job itself entails the formulation of a just wage. Duties,
responsibilities and the skill requirements of the job are probably the most
considerable determinants of fair wage.

7. Individual Performances
Individual performances or productivity ratings affect the determination of
wage/salary increases. One who performs well in his job deserves to receive a
proportionate increase in pay.

SOME ISSUES ON JUST WAGE
The minimum wage mandated by the government is not a guarantee of a just
and fair wage.
Organizations and businesses usually conclude that they are legally and morally
right when they fulfill their mutual agreement with the employees. It is objected
that the mutually agreed upon wages may not be advantageous to the workers.
Geographic differences hinder the formulation of a perfectly common definition of
fair wage. Some communities have a higher cost of living than others.
Wage indexation to cost of living, where wage is automatically adjusted with the
increases of cost of living, is not usually met by majority of the employers. One
valid reason is the organizations insufficient financial resources for the obvious
fact that they too are unfavorably affected by such economic fluctuations.
Companies have different interpretations of the justifiable pay for certain job
positions, skills and tasks. Thus, the prevailing industry rate alone could not
perfectly establish a just wage.
The Law of Supply and Demand on labor, e.g., the more the supply of labor the
less the compensation given to workers.
As one of the major economic condition indicators, the inflation rate also dictates
the formulation of just wages as it affects the prices of commodities.

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