Biblical Perspectives on Pay Gaps – Ethical Questions/Issues

Ethical Questions/Issues in Rothaermel’s Textbook

The second ethical question in chapter 12 of the Rothaermel textbook asks about the disparities in CEO pays. Rothaermel (2017) suggests that the CEOs of the Fortune 500 companies earn 300 times more than the average worker pay.

On a policy perspective, one of the negative effects of this large and increasing disparity in CEO pay is that it is demoralizing for workers, leading to reduced work commitment and productivity at the workplace. According to Minnick (2016), the new rule mandating companies to publicly reveal their pay gaps will cause a negative impact on the performance, motivation and overall satisfaction of employees at the workplace.

Furthermore, employees will push for salary increase, leading to increased operating expenses and reduced profit margins for the company (Rothaermel, 2017). Thus, the company’s policies on pay, employee motivation, and competitive strategy will be affected by the demoralizing effect of the pay gap.

The current executive pay package is not justifiable because it causes disparities in payment, which undermines the principle of justice and equality. The increase of CEO bonuses and benefits deny other employees the right to earn a decent salary. Some of the benefits given to CEO could be offered to employees to raise their social welfare and promote equality and fairness in resource allocation.

Bible Verse Related to CEO Pay Gaps

The bible verse that is appropriate for the analysis of this ethical issue is 1st Timothy 5:18 which lays out the belief of the early church on equal pay. The verse says, “For the Scripture says, “You shall not muzzle the ox while it is treading out the grain [to keep it from eating],” and, “The worker is worthy of his wages” (he deserves fair compensation). Putting the verse into context, Paul wrote a letter to Timothy explaining the need of paying good wages to elders of the church who spend a lot of time preaching and teaching the word of God (Forrester, 2017). Therefore, the verse proposes that Christians should pay their employees the amount of wages they deserve for their work.

Analysis and Discussion

Rights

The current pay gap between average employees and CEOs is unjustifiable based on 1st Timothy 5:18 which states that workers deserve their wages. Apostle Paul used a symbol of an ox used to tread grain in the farm. According to the bible, an ox should be treated fairly to perform effectively in the farm. Similarly, employers should provide good wages to their employees to enable them work effectively at the workplace. For example, elders of the church who spend a lot of time preaching and teaching should be paid according to their workloads. Therefore, Christians are expected to promote justice, fairness, and equality in all aspects of life, including payment of wages.

Equality

Based on the scripture, Christians have the obligation and responsibility to provide equal pay and treat workers fairly (Forrester, 2017). Jesus himself came to the world to save sinners and help the needy. Christians should emulate the example of Christ and ensure that the poor and low-income earners have the opportunity to meet their daily needs.

Ethical Responsibility

By paying wages above the minimum wage, employers enable their workers to meet their daily needs and achieve what God expects of Christians – to help the needy.

God also expects Christians to share what they have with those who lack. As suggested in 1st Timothy, employers should pay wages as a way of sharing the earnings of the company with employees. The company also has an ethical and biblical responsibility to share their income with society, and employees are the first in line to be paid sufficient wages based on their efforts as suggested in 1st Timothy.

Social Responsibility

CEOs are also obligated to share their earnings with those who earn low income and poor members of society (Forrester, 2017). Workers are the key members of the organization who deserve to receive a share from the company’s profits, and they deserve the wages as suggested in 1st Timothy. Thus, when CEOs take a large share of the profits, they not only deny the workers their legal right to a good wage, but they also abscond their moral duty to share their resources with the needy.

Conclusion

One of the essential Christian values is compassion and kindness towards others. Although workers deserve to be paid wages according to the amount of their labor as suggested in 1st Timothy 5:18, Christian employers should still be kind to share their earnings with workers who do a lot of work for the company. It is ethically and morally right to promote equality in all aspects, including payment of wages; but Christians should do good things by showing compassion and kindness to employees who earn little income (Forrester, 2017). If CEOs earn three times more than workers, they become greedy. Greed is a vice that is discouraged in the bible because it always causes more evil to thrive. With the hearts of sharing and showing compassion, Christians create unity, love and positive human relationships (Forrester, 2017). For instance, if employees are paid a good salary that they deserve, they become motivated, happy, and respect CEOs, leading to effective work relations and unity of the entire society as expected of Christians.

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