Chapter 8: Norms of Need and Minimum Wages
8. Norms of need and minimum wages 8.1 INTRODUCTION This chapter focuses on the role played in the labour market by norms of need. As was outlined in Chapter Two, these norms relate, in part, to shared beliefs about the right of individuals to a minimum outcome from the distribution of the proceeds of a group’s resources. Rawls’s (1971) difference principle, which tells us to maximize the prospects of the worst off individual in our choice of distributive institutions, is characteristic of the type of value that such norms embody. Boulding’s (1962) principle of ‘disalienation’, which asserts that no person in a society should be left without a claim on its resources, also reﬂects these values. The chapter investigates, in particular, the possible relationship between norms of need and the regulation of minimum wage rates in the Australian context. The discussion of theoretical approaches to the analysis of social norms in Chapter Three highlighted the possibility that employers, workers and other community members who shared such norms would favour wage structures that guaranteed a minimum wage outcome. Such a notion was evident in the classical analysis of wages, where the ‘natural’ or subsistence wage rate was deﬁned in terms of the minimum wage level consistent with ‘common humanity’. The theoretical analysis of social norms also pointed to a possible relationship between social norms and the form of government intervention in the regulation of wage rates. Norms of need are likely to translate into attitudes about the legitimacy of...
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