Distributive Justice: The Right and Wrong of Our Present Distribution of Wealth

by John A. Ryan

The unusual sacrifices that deserve extra compensation are connected with the costs of industrial functions and the disagreeable character of occupations. Under the first head are included the expense of industrial training and the debilitating effects of the work. Not only justice to the worker but a farsighted view of social welfare, dictate that all unusual costs of preparation for an industrial craft or profession should be repaid in the form of unusual compensation. This means something more than a living wage. For the same reasons the unusual hazards and disability resulting from industrial accidents and diseases should be provided for by higher remuneration. In the absence of such provision, these costs will have to be borne by parents, by society in the form of charitable relief, or by the worker himself through unnecessary suffering and incapacity. The industry that does not provide for all these costs is a social parasite, the workers in it are deprived of just compensation for their unusual sacrifices, and society suffers a considerable loss through industrial friction and diminished productive efficiency. In so far, however, as any of the foregoing occupational costs are borne by society, as in the matter of industrial education, or by the employer, as by the devices of accident compensation or sickness insurance, they do not demand provision in the form of extra wages.

Other unusual sacrifices that entitle the worker to more than living wages, are inherent in disagreeable or despised occupations. The scavenger and the bootblack ought to get more than the performers of most other unskilled tasks. On the principles of comparative individual desert, they should receive larger remuneration than many persons who are engaged upon skilled but relatively pleasant kinds of work. For if they were given the choice of expending the time and money required to fit them for the latter tasks, or of taking up immediately their present disagreeable labour, they would select the more pleasant occupations, for the same or even a smaller remuneration. And the majority of those who are now in the more skilled occupations would make the same choice. Hence the sacrifices inherent in disagreeable kinds of work are in many cases as great as or greater than the sacrifices of preparation for the more pleasant tasks; consequently the doers of the former are relatively underpaid. If all wages were regulated by some supreme authority according to the principles of complete justice, the workers in disagreeable occupations would receive something more than living wages. Nor would this determination of rewards be in any way contrary to social welfare or the principle of maximum net results; for the superior attractiveness of the other kinds of work would draw a sufficient supply of labour to offset the advantage conferred by higher wages upon the disagreeable occupations. The main reason why the latter kind of labour is so poorly paid now is the fact that it is very plentiful, a condition which is in turn due to the unequal division of industrial opportunity. Were the opportunities of technical education and of entrance to the higher crafts and professions more widely diffused, the labourers offering themselves for the disagreeable tasks would be scarcer and their remuneration correspondingly larger. This would be not only more comfortable to the abstract principles of justice, but more conducive to social efficiency.

To sum up the discussion concerning the canon of efforts and sacrifices: Labourers have a just claim to more than living wages whenever they put forth unusual efforts, and whenever their occupations involve unusual sacrifices, either through costs of preparation, exceptional hazards, or inherent disagreeableness. The precise amount of extra compensation due under any of these heads can be determined, as a rule, only approximately.

The next canon to be considered as a reason for more than living wages is that of productivity. This offers little difficulty; for the unusual product is always visible among men who are performing the same kind of work, and the employer is always willing to give the producer of it extra compensation. While superior productive power which is based solely upon superior native ability has only presumptive validity as a canon of justice, that is ethically sufficient in our workaday world. Moreover, the canon of human welfare demands that superior productivity receive superior rewards, so long as these are necessary to evoke the maximum net product.

The canon of scarcity has exactly the same value as that of productivity. Society and the employer are well advised and are justified in giving extra compensation to scarce forms of labour when the product is regarded as worth the corresponding price. This remains true even when the scarcity is due to restricted opportunity of preparation, rather than to sacrifices of any sort. In that case the higher rewards are as fully justified as the superior remuneration of that superior productivity which is based upon exceptional native endowments. The amount of extra compensation which may properly be given on account of scarcity is determined either by the degree of sacrifice involved or by the ordinary operation of competition. When men are scarce because they have made exceptional sacrifices of preparation, they ought to be rewarded in full proportion to these sacrifices. When they are scarce merely because of exceptional opportunities, their extra compensation should not exceed the amount that automatically comes to them through the interplay of supply and demand.

The canon of human welfare has already received implicit application. When due regard is given to efforts, sacrifices, productivity, and scarcity, the demands of human welfare, both in its individual and its social aspects, are sufficiently safeguarded.

In the foregoing pages the attempt has been made to describe the proportions in which a given wage fund ought to be distributed among the various classes of labourers who have claims upon the fund. The first requisite of justice is that all should receive living wages. It applies to all workers of average ability, even to those who have no special qualifications of any sort. When this general claim has been universally satisfied, those groups of workers who are in any wise special, whose qualifications for any reason differentiate them from and place them above the average, will have a right to something more than living wages. They will have the first claim upon the surplus that remains in the wage fund. Their claims will be based upon the various canons of distribution explained in detail above; and the amounts of extra remuneration to which they will be entitled, will be determined by the extent to which their special qualifications differentiate them from the average and unspecialised workers. If the total available wage fund is merely sufficient to provide universal living wages and the extra compensation due to the specialised groups, no section of the labour force will be justified in exacting a larger share. Even though the employer should withhold a part of the amount due to some weaker group, a stronger group that is already getting its proper proportion would have no right to demand the unjustly withheld portion. For this belongs neither to the employer nor to the powerful labour group, but to the weaker section of labourers.

This does not mean that a powerful body of workers who are already receiving their due proportion as compared with other labour groups, would not be justified in seeking any increase in remuneration whatever. The increase might come out of profits, or interest, or the consumer, and thus be in no sense detrimental to the rights of the other sections of labourers. This problem will be considered a little later. At present we confine our attention to the relative claims of different labour groups to a definite wage fund.

Suppose, however, that after all workers have received living wages, and all the exceptional groups have obtained those extra amounts which are due them on account of efforts, sacrifices, productivity, and scarcity, there remains a further surplus in the wage fund. In what proportions should it be distributed? It should be equally divided among all the labourers. The proportional justice which has been already established can be maintained only by raising the present rates of payment equally in all cases. All the average or unspecialised groups would get something more than living wages, and all the other groups would have their extra compensation augmented by the same amount.

Of course, the wage-fund hypothesis which underlies the foregoing discussion is not realised in actual life, any more than was the "wage fund" of the classical economists. Better than any other device, however, it enables us to describe and visualise the comparative claims of different groups of labourers who have a right to unequal amounts in excess of living wages.