What is economic justice?
Economic justice is a component of social justice and the welfare economy. It is a set of moral and ethical principles for building economic institutions, where the ultimate goal is to create an opportunity for each person to establish a sufficient material basis on which to have a dignified, productive and creative life.
Key points to remember
- Economic justice is the idea that the economy will be more prosperous if it is more fair.
- The aim is to create opportunities for all to flourish and for prosperity and justice to go hand in hand rather than opposing each other.
- Universal basic income, gender and racial income equality, equal employment and credit opportunities, and enabling everyone to reach their full potential are all principles of economic justice.
Understanding economic justice
The concept of economic justice overlaps with the idea of overall economic prosperity. There is a belief that creating more opportunities for all members of society to earn sustainable wages will contribute to sustained economic growth. When more citizens are able to support themselves and maintain stable discretionary income, they are more likely to spend their earnings on goods, which in turn stimulates demand in the economy.
Achieving economic justice can include resolving wage gaps and other gaps in individual incomes. For example, some members of the workforce may have jobs that do not fully utilize their skills. This usually leads to salaries that do not reflect the full potential of their professional abilities. As a result, they are not earning the highest income they are capable of.
Such a possible loss of wages creates inefficiency in the economy because these workers will not have the income to participate fully in it. If this inefficiency grows to a significant extent – in which a large portion of the population does not buy goods and services that they might otherwise have spent their income on – it can slow the economy.
Examples of ways to achieve economic justice
One attempt to achieve economic justice is a progressive tax system, in which the tax percentage increases as the amount of basic income increases. The goal of progressive taxation is to address income inequalities and provide funds for social services, public infrastructure and education. The earned income credit, affordable housing, and federal needs-based financial assistance for university students are other examples of institutions of economic justice.
Actions that could serve economic justice also include efforts to end gender pay gaps and provide more in-depth career preparation and education to low-income and at-risk segments of the population. Raising the wages of workers who earned lower wages is another method proposed to serve economic justice.
Such a strategy can be seen as a counterpoint to the idea of paying higher wages to corporate executives who are associated with generating wealth that pays the wages of others. Note that this idea does not work the other way around: When the economy is slowing, it is those who are among the poorest who suffer the most serious damage, compared to those who are richer.