10.1007-s11625-018-0560-7 accepted version.pdf (2.81 MB)
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How can wages sustain a living? By getting ahead of the curve

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journal contribution
posted on 04.08.2022, 03:27 authored by Christian YaoChristian Yao
Work may be a panacea for poverty but the world of work in 2018 is characterised by ‘Working Poverty,’ including poor wages. Living wages are a contested idea for resolving the paradox, with empirical evidence on how they might do so being scarce. Theoretically, a living wage enables people to escape from poverty traps, indicated by qualitative improvements in quality of work and life beyond a set income. Alternatively, diminishing marginal returns suggest that any wage is a good wage, particularly at low pay levels. We explored these possibilities with almost 900 low-income workers across two diverse countries, New Zealand and South Africa, on reliable indicators of workplace justice, job quality, and life satisfaction. A coherent pattern occurred: trap-rise-pause-rise. At wages below ± $2000 per month, workers felt trapped in injustice, disengagement and dissatisfaction; above, they reported the opposite. This rise was starker in South Africa, where income inequality was highest. After a pause in satisfaction level (rising aspiration/relative deprivation), levels rose, with diminishing marginal returns. This pattern of trap-rise-pause-rise links two ‘competing’ theories of sustainable livelihood. Each matters but at different points on one wage spectrum. Wages may become ‘living’ only once they get ahead of a cusp in a wages-wellbeing curve, at a point or range determined empirically. Replicating this pattern across two very different countries suggests robustness, and may be a promising step towards a science of sustainable livelihood. However, we still require more systematic sampling, across more countries and groups, before the findings may be generalized.

History

Preferred citation

Yao, C. (2018). How can wages sustain a living? By getting ahead of the curve. Sustainability Science, 13(4), 901-917. https://doi.org/10.1007/s11625-018-0560-7

Journal title

Sustainability Science

Volume

13

Issue

4

Publication date

18/04/2018

Pagination

901-917

Publisher

Springer Nature

Publication status

Published online

Contribution type

Article

Online publication date

18/04/2018

ISSN

1862-4057

eISSN

1862-4057

Language

en