Humanistic Management and Living Wages: a Case of Compelling Connections?

The balance between employee pay and human thriving remains theoretically and empirically under-explored at the lower-end of the wage and income spectrum. Poverty Trap theory and the Law of Diminishing Returns offer seemingly contradictory predictions of the relationship between thriving and wages. An exploratory survey of low- and middle-income earners from a range of occupations was used to test these competing possibilities by relating hourly wage rates to thriving as measured by sense of (i) work happiness (job satisfaction, empowerment, and pride), (ii) well-being (mental and physical health, participation in community life, life satisfaction); and (iii) wage fairness (compared to upper management, reciprocity for the job). Linkages between pay and human capabilities (i)- (iii) were statistically significant, and non-linear. Fairness (reciprocity) had the closest association with hourly wages and household income, suggesting a mediating role between pay and (i)-(ii). Increments in hourly pay yielded diminishing returns, whilst increments in household income only yielded clear gains, on feelings of pay justice, once the current campaigned-for living wage figure was breached. Poverty Traps and Diminishing Returns may each play a part in the link between on the one hand decent wages and income, and on the other hand eradication of working poverty.