Is There a Moral Obligation to Pay More?

Perhaps this question is an easy one for the average reader of BeingFrugal.net. Perhaps not. Let me explain my current situation and pose a few questions.

Living out in the country my family has to use propane for the furnace, hot water heater, dryer, and stovetop. Every time I see the Amerigas propane truck pull in the driveway to fill our tank I cringe as I know a $400+ bill will soon be in the mail. I am currently paying $2.91 a gallon for propane. Not fun.

But being a frugal person by nature, I am always looking for ways to make my paycheck go as far as possible each month. So when a neighbor told me about a new propane company to the area, and what a great price they are offering, my ears perked up. $2.19 a gallon to be exact, which on a 200 gallon tank comes out to a savings of $144 every time they fill the tank. No small potatoes.

So after another friend recommended their service as well, I decided to make the switch. The savings was just to hard to pass up. But I wanted to give Amerigas a chance to match the $2.19 per gallon. I was hoping they would price-match because it is going to be a small pain to get the tanks switched out and started with the new company.

But when I called them and explained the situation, they told me something that is the reason behind this post. They said,

Oh, well, you really need to consider that they have to be paying their employees much less than what we pay ours. And you will be contributing to this problem if you switch.

My first thought was, no, you need to figure out how to lower costs and overhead so you can compete with them on price. That is how capitalism works, right? That is how Wal-Mart works, right? But instead, I said nothing and told the man that I would re-consider my options.

So that brings me to my question. Is there a moral obligation to pay more so employees are compensated fairly? Is the Amerigas employee playing the sympathy card and just making up the story about salary discrepancies? Should I just stay with Amerigas figuring that the cheaper propane company is enticing new customers only to raise the price in a couple months? Have you ever had a company say this about a competitor and what was the result? Looking forward to your comments.

A surefire way to compete on price is to use online coupons. I knew I could tie coupons into this post! 



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By , on Jul 29, 2009
Kyle James Kyle James owns and operate a website called Rather-Be-Shopping.com which specializes in coupon codes for over 750 stores, organized in 25 shopping categories. He also has a blog, where he writes about frugal living and personal finance tips as well as other musings about the adventures and mis-adventures of raising 3 active kids.

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{38 Comments}

  1. a.b.:

    If you’re concerned about the employee getting underpaid, and you’re saving $144 a delivery, why not tip him an extra $40? That way you know you’re not contributing to underemployment, but you’re still saving substantially.

  2. Anne:

    Your first obligation is to support your family. Do you have enough money that you can afford to spend an extra $144/month because you like one company more than the other? If so, do the research. It’s not just take home cash. What is the work/life balance like for both companies? Medical plans? Paid time off? Saftey record? Training? Maybe the new company hires inexperienced workers and trains them. That is far more valuable than an extra few cents an hour.

    I know that there are times I buy products that someone only gets paid a few cents an hour to make. But at the same time, a few cents an hour in another country isn’t always a bad wage, and it buys food for their families that they otherwise couldn’t afford. Which brings us full circle. Above and beyond all else – your obligation is to your family, then you can work on the rest of the world.

  3. Is their service superior and worth more? Or are they just trying to guilt you into throwing away money– if so, drop them like a bad habit . . .

  4. Diana:

    Amerigas was completely inappropriate in the response you described. If I were in their shoes, I would present to you any competitve advantages they may have. When I first read the post, the first thing that came to mind was a comment made by a salesman when I bought my last vehicle. I made a very fair offer, and his response was “I have to put food on the table.” How inappropriate! I walked away never to return (and also made sure to share that with my colleagues). I bought from a different dealer for a reasonable (and even lower) price, and they still made a nice profit.

    As consumers, our obligation is to purchase what we will and keep our commitments. If we want to pay higher prices for some cause, that is a choice. If we have no moral issues with competitive prices, there is nothing wrong with chosing the frugal.

    Advice: Certainly check all the facts before making a similar decision. With the new company, ask all of the questions important to you. (For example, this new company cannot gaurantee future commodity prices, but will they commit to beating Amerigas going forward? Ask them what enables them charge such lower prices. Inquire about their financial stability. Are they just new in your area, or are they a new company altogether? If any question on the stability, consider the problems that could occur on a switch back to the old company.

    Interesting note: I own a home in rural Vermont (that I hope sells soon — I relocated to CO). My home was built brand new and the entire development was on propane. A new company came in with a great offer for natural gas — excellent in the Green state. All of this change came about after I moved, so I felt the decision is best left to any buyer (whether to use propane or natural gas and whether to incur the issues with switching the tank). It’s interesting. Our HOA leaders believed everyone would switch to natural gas, but only 30% of the neighborhood did (which makes things really confusing). When pondering such changes, just imagine the heating bills in VT. Although the homes in the development were energy certified and brand new, the winters are quite harsh (can get to 20F below plus wind-chill). Heating choices are definitely a major decision.

  5. I agree that it was a pretty inappropriate thing for Amerigas to do. And, I don’t know that there is anyway they can tell that for certain. Pay wages can be based so heavily on different things. Are the Amerigas workers running longer routes than the other folks? Is there a reason for them to compensate more? A company can have the same overhead cost of $500,000 for employee compensation and have vastly different employee counts.

    It’s a competitive market. The company needs to focus on the bottom line these days, sad as that may be for workers. And, if Amerigas can’t lower their costs because they want to treat employees well than they should look for other ways to lower their costs to offer a more competitive price. I’d give the new company a chance.

  6. Storm:

    Harm is not subjective, though many try this deceptive out in an effort to force others to provide for them.

    Your example is a perfect example of this. “Pornography” harms no one. Viewing it harms no one. Yet the religious, who by definition deny reason, evidence, and objective reality, claim that the existence of that which is chosen voluntarily and provides great pleasure is a harm. So we see that the problem is one of intellectually dishonesty on the part of the religious person who makes such a claim, specifically the logical error of equivocation where they define “harm” to be “anything which does not promote what I want to promote” or perhaps more accurately “anything which gives any person any pleasure.” The choice to enter the store, or to enjoy “pornography” is the choice of the individual. To even begin to get close to making any case for potential harm you would have to show that the store owner or her representatives FORCED the material upon the individual, and even then you would still have the problem of demonstrating actual harm.

    There are five basic harms, all objectively verifiable and into which all actual harms fall. These are Death, disability (removing ability), pain, loss of freedom, loss of pleasure. Notice that failure to provide pleasure (such as pleasing the religious zealot who hates the human form) is not a harm as it does not deny pleasure only refrains from granting a pleasure. This is a not very subtle difference many folks overlook so as to promote their own desires as being “morally” obligatory.

    Ignorance may or may not be a justified exception depending on the particulars, but that does not make it subjective. Willful ignorance may not even be immoral, though it certainly can lead to immoral actions.

    As for politicians votes, they are all immoral for the only power of government is first to harm the innocent. This requires a longer explanation, but as a short one, consider that government cannot take any action without first committing the act of theft.

    As for the corporation and charitable pay, notice that your explanation does delve into grey areas, but does not deal with the situation at hand to which I was commenting. If as is necessitated by the claims of the Amerigas rep, Amerigas is paying a charity wage rather than a sufficient wage, then they are acting against the interests of the shareholders in what is clearly a central example of violating this law.

    BTW I am not commenting in this context about the reasonableness or justification of this law, only noting that under the law as it exists, if what the rep claims is true is in fact true, then Amerigas is wide open for being sued by the shareholders under the law.

  7. Storm:

    Robert, Under corporate law, any corporation which fails to maximize shareholder return can be held legally accountable. Any such corporation which pays a sum greater than the value of the work, as is necessitated by the claims of the Amerigas representative, is failing on a fundamental level to maximize shareholder return and thus clearly violating the law. BTW this is not merely state but federal as well.

    I’ve seen some make statements here to the effect, or necessitating that morality is subjective. This is not the case. Religion, faith, illusion, taste, etc., are all subjective, but morality is objective. First there must be interaction between moral agents. Then there must be some form of actual harm. If neither of these is present, then no moral obligation was violated. In this instance the interaction is purely voluntary, so no harm exists, therefore certainly there can exist no moral obligation to do anything other than refrain from actively harming the representative who is lying to you.

    To be a moral person one need only refrain from actively intentionally harming others. That said, remember that the morally good person is different from the moral person. The person who acts so as to relieve suffering or increase pleasure in others is morally good. The person who refrains from harming others is moral. And those who seek to harm others are politicians.. er.. immoral persons.. :)

  8. Lynnae:

    @Liane – That is a very good point. To make sure we are 100% morally supporting companies that live up to a certain standard would probably take more time and research than any of us have available.

  9. But, how would you know the integrity of the companies involved? Unless you have “backstage access” to each company to compare the employees’ salaries and benefits and the cost of overhead, how could you possibly know if one company is more generous than another? I don’t feel that we should be morally responsible FOR anyone else -we can’t. Only ourselves, and hopefully by being honest and having strong values that we LIVE out daily, our children. I think we have to make the best decision with the information that is (credibly) available to us.

  10. Meg:

    @Storm

    But “actual harm” can be subjective. All actions, to some degree, have both good and bad consequences eventually. Then throw in personal responsibility, the possibility of supernatural punishment, and all of a sudden one person says, “I’m just providing a desired service that does no harm to anyone”, and another says, “That porno store corrupted my son and split our family!”

    Also, while one might not be immoral for doing harm unintentionally, I believe that failing to reasonably consider one’s actions may be immoral — and certainly staying intentionally ignorant of what one can be reasonably expected to know to avoid responsibility is immoral in my book. For example, if a politician votes for a bill without taking a reasonable amount of time to READ it or become otherwise informed about it’s nature, then they are still being immoral if that bill is clearly harmful. (Though, try to define “reasonable” and “clearly” — I certainly won’t even attempt it here. Again, subjective.)

    “Any such corporation which pays a sum greater than the value of the work, as is necessitated by the claims of the Amerigas representative, is failing on a fundamental level to maximize shareholder return and thus clearly violating the law.”

    Not necessarily so clear. How do you value someone’s work? Is it just market price? But how do you know that those cheaper replacements would truly be as good workers? There is something to be said about retaining good employees and that’s harder to measure. Furthermore, ‘overpaying’ employees might not necessarily fail to maximize shareholder return if it might be shown that it benefits the company financially — for example, if a company makes more because they have a ‘feel good’ brand and ‘free advertising’ due to being well known as a ‘good place to work’. Furthermore, such places may likely attract more talented individuals, another benefit for the company. Again, all hard to measure, but a strong possibility in some cases.

  11. Becky:

    When the person on the phone claimed that they pay employees more, I choked. I figured the bosses at Amerigo are making more–not necessarily the little guys.

    How would a receptionist or employee at one company know what the other company pays, anyway? Seems like a made up answer. I’d not feel obligated in that situation.

    However, I have felt that way about hiring people here in Poland for a dollar or two an hour. I’d rather just not hire someone than to pay them such low wages. It feels like “cheating” and I’ll leave the work undone rather than pay the really low wages. It feels like I’m insulting people. It’s probably just my overactive conscience. :) The biggest problem is, I know how much bread costs, electricity bills, bus rides. I hate to “use” people.

    On the other hand, employees at Coca Cola and Levi’s aren’t making anything like what they make in the states over here and a 2 liter bottle of Coca Cola is close to $2. Levi’s are close to $80. Orange juice made from reconstituted frozen concentrate is still $1/liter. They are paying their employees a pittance and yet the prices aren’t cheaper. Where’s the difference? I think it’s corporate profit–probably CEOs and maybe higher taxes.

  12. karyn sweet:

    I’d rather pay more for a locally and/or ecologically made product over a Walmart product – when I can afford to do so. However, I would guess that the Amerigas’s higher prices are going into the higher paychecks of only a few employees – the top dogs. And if Amerigas can’t compete, no one’s going to have paychecks because they’ll go out of business.

  13. fern:

    It may be a “problem,” but don’t let someone make it “your” problem. Plus, you have no idea whether that’s the reason the other company offers a better price. there could be a whole host of reasons why they can p rice their product more comeptitively.

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