Say John Smith is poor and unemployed. Or maybe he is employed, but not by Wal-Mart. In this situation, no one would claim that Wal-Mart has any special obligation to Smith. Quite a lot of people would claim that all of us collectively owe something to Smith: a minimum standard of living, healthcare, whatever. And Wal-Mart, as a corporate citizen, owes taxes as much as any other corporation. We might even say Wal-Mart has a moral obligation to help the poor through charitable giving. But Wal-Mart owes nothing to Smith that it doesn’t owe to every other poor person.
But now suppose Smith goes to work for Wal-Mart, with compensation that both apparently consider preferable to the alternative (for Wal-Mart, not having Smith as an employee; for Smith, unemployment or employment elsewhere). At this point, many people are of the opinion that Wal-Mart does have a special obligation to Smith. And not just the obligation they agreed to (the agreed upon compensation package), but something more: a “living wage” high enough for Smith to support himself and, according to many, his family as well (however large or small it may be), plus healthcare, maybe even retirement benefits. Somehow, Wal-Mart’s hiring of Smith has transformed a collective obligation owed by all into a particular obligation owed by Wal-Mart.
Now, I’m trying to dope out the underlying theory of obligation here. Why does Wal-Mart owe a special obligation to its employees, above and beyond what has been contracted for, that it does not owe to anyone else? Seriously: what is the argument here?
The answer I hear most often is simply, “Wal-Mart can afford it.” But Wal-Mart could afford to support Smith before it hired him. It could afford to support numerous non-employees. So the “Wal-Mart can afford it” theory cannot explain Wal-Mart’s special obligation to Smith-the-employee.
Another possible answer is that Wal-Mart is paying Smith less than he’s worth. This is not obviously true; if Wal-Mart competes in a competitive labor market, it has to pay compensation approximately equal to Smith’s marginal productivity. But let’s say the labor market is not fully competitive. If so, then one could plausibly argue that Wal-Mart should pay him more. But how much more? Is there any reason to think Smith’s true contribution to Wal-Mart’s profitability just so happens to equal the cost of buying Smith food, shelter, clothing, and healthcare (at some specified level of quality)? Of course not. The Wal-Mart critics' notion of the “right” compensation cannot possibly correspond to Smith’s actual productivity, given the same critics' insistence that Smith should be able to support his family as well – unless for some reason you think someone with five kids is necessarily more productive than someone with just three.
Another possible answer is that Wal-Mart’s position in the business world has allowed it to change the labor market for the worse – driving out small businesses, etc. Empirically, this is also questionable. But again, suppose it’s true. This is still just a variation on the previous answer. It indicates that Wal-Mart’s position allows it to pay Smith less than he would allegedly have earned if Wal-Mart didn’t exist. But how much would Smith have earned? The amount would presumably correspond in some way to his productivity. There’s no reason to think it would just happen to equal the amount of money it would take to sustain his and his family’s lifestyle.
The attempt to define a “living wage” in a manner divorced from one’s productivity suggests that many Americans have (perhaps unconsciously) absorbed a Marxian ethic: from each according to his ability, to each according to his need. Okay, I disagree, but I can believe people believe that. But this is still just a variant of “Wal-Mart can afford it.” It cannot explain the particular need-based obligation people think Wal-Mart owes people simply because it has hired them.
I am genuinely curious to know what the underlying theory is here. If I knew the answer, I might also know the response to this hypothetical: Suppose Wal-Mart caves in to progressive demands and pays all its employees a “living wage,” complete with healthcare, et al. And suppose that Wal-Mart hires fewer workers as a result, or hires a different set of workers to account for the fact that some workers are more expensive than others (because they have larger families). As a result, some people who would have been Wal-Mart employees are not. Does Wal-Mart owe any special obligation to them?