Donaldson: arguing ontheliving wageside
Formal sector VS informal sector
in developing counties: theinformal sectorsareconsistedof rural areas,thefarm areas.Theforma
l sectorsis placepeopleusually goto to escapethepoverty of thecountry.
Organizationswho investedin theformal sector areirresponsibile for themarket outcome.Accor
ding to market outcomes,thepriceof necessary productsareincreased.Thecriticis is that themar
ket trying to let thempay ahigher wage, however they aretrying to aviod doing so.
Maitland: if corporationsin fact doimprovethemarket outcome, in fact theinformal sectoswill b
emaking worseoff. Thefact that theliving wagewill createaevenmoreethical diseaster.Thecor
poration is trying to find thejurisdiction to aviod thefact that they haveto payaliving wage.The
y then, will leavethecurrent jurisdiction in order to aviod acost in salary. Whenthecorporation l
eavs, they actually sendout theemployeesin theformal sector back to theinformal sector. Thepe
oplein informal sector, depresswages,increaseunemployement rate, doing worseoff.
--thereforeproducesatragedy in theinformal sector
So,it is better for corporation to pay aliving wage, that thepeoplefrom formal sector would not