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Moral Sentiments and the Minimum Wage

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  • David H. Plowman
  • Chris Perryer

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.

Suggested Citation

  • David H. Plowman & Chris Perryer, 2010. "Moral Sentiments and the Minimum Wage," The Economic and Labour Relations Review, , vol. 21(2), pages 1-21, December.
    • Handle: RePEc:sae:ecolab:v:21:y:2010:i:2:p:1-21
    DOI: 10.1177/103530461002100201
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    References listed on IDEAS

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    1. David H. Plowman, 1995. "Protecting the Low Income Earner: Minimum Wage Determination in Australia," The Economic and Labour Relations Review, , vol. 6(2), pages 252-287, December.
    2. Donald R. Stabile, 2008. "The Living Wage," Books, Edward Elgar Publishing, number 13337.
    3. Oren Levin-Waldman, 2000. "Minimum Wage and Justice?," Review of Social Economy, Taylor & Francis Journals, vol. 58(1), pages 43-62.
    4. R. Donald, 1997. "Adam Smith and the Natural Wage: Sympathy, Subsistence and Social Distance," Review of Social Economy, Taylor & Francis Journals, vol. 55(3), pages 292-311.
    5. Jeffrey T. Young, 1986. "The Impartial Spectator and Natural Jurisprudence: An Interpretation of Adam Smith's Theory of the Natural Price," History of Political Economy, Duke University Press, vol. 18(3), pages 365-382, Fall.
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    Cited by:

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    2. Young Cheol Jung & Adian McFarlane & Anupam Das, 2021. "The effect of minimum wages on consumption in Canada," The Economic and Labour Relations Review, , vol. 32(1), pages 65-89, March.

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