Ethical Imagination: The Working Centre's Approach to Salaries

By Joe Mancini

This document is included as a chapter in the book, "Transition to Common Work, Community Building at The Working Centre".  Please do not reproduce it without permission.

Our daily work should build community and strengthen relationships. People thrive in an environment that seeks happiness and cooperation. The following story describes the evolution of The Working Centre's salary policy, demonstrating that it is possible for workplaces to develop practices that embrace less-materialistic values. The ethical imagination that formed this policy emerged from a consistent ethic of sharing and simple living; it has invited people into a culture of equality.

The Evolution of a Salary Policy

By 1987, The Working Centre had two operating projects: the Job Search Resource Centre at 58 Queen Street South and St. John's Kitchen in the rented church gymnasium of St. John the Evangelist Anglican Church. During our first five years, all the full-time roles were paid equally, but this approach was questioned as unrealistic for the long-term.

A well-meaning professor of organizational psychology, who had recently joined The Working Centre Board of Directors, suggested a standard workplace model that scored each job description for its functional role. This process was initially adopted despite the fact that we did not have written job descriptions, and we were resistant to creating job checklists. For five years we had avoided narrow job descriptions with lists of responsibilities as this was counter to our cooperative culture that focused on completing the tasks at hand. 

Right away, it was recognized that the process of numerically ranking job descriptions was biased. The executive director position scored 50 percent more than the others. Everyone felt their jobs were under-scored and less valued. The questionnaire was skewed to recognize formal responsibility over informal cooperation. Adopting this organizational system would have put us on a contradictory path of developing alternative community projects with a hierarchical salary structure.[1]

A meeting was set in the basement of 58 Queen to discuss the results of ranking the job descriptions. Ken Westhues offered, as his first assignment on The Working Centre board, to observe this meeting. Westhues was an accomplished author and professor of Sociology at the University of Waterloo with a unique grasp of critical thinking from a non-hierarchical perspective. At the meeting, he asked some questions, looked closely at the questionnaires and delivered his verdict. He decided to leave, pointing out that he did not want to be part of The Working Centre if this was the direction it was heading.  

Within days, Westhues phoned and suggested a different kind of salary policy. First he apologized for leaving the meeting, admitting that he felt bad about doing so. The incongruity between the stated goals of The Working Centre and our willingness to subject ourselves to organizational management had upset him. He went home discouraged that social projects could be derailed so easily, but thought about alternatives to the hierarchical traps into which we were drifting.

The simplicity of his plan immediately won our confidence. He started by asking if we would limit our salaries to the average industrial wage, as this reflected the level of wages paid at The Working Centre. By capping salaries at this rate, Working Centre wages would remain equal with the 60 - 70 percent of workers who earn this wage or less. It would demonstrate the centre's commitment to the unemployed. The rest of the policy followed naturally. “In keeping with the centre's value of reducing hierarchy, the salary pyramid is relatively flat, its five levels starting at 86, 80, 74, 68, and 66 percent of the director's salary.”[2] Over seven years, staff would earn between 98 and 74 percent of the director's salary. This was achieved by granting a 2 percent increase each year over seven years.

Advancing through the steps was independent of ongoing mutual evaluations. This delinked performance from salary, another important aspect of Westhues’ thinking that inserted trust, relationship and dialogue in place of arbitrary decision making. Wages would increase when the Board raised the director’s salary. Over the years, few positions were hired in levels four and five. Westhues' salary grid created a workforce where the lowest paid full-time worker can earn 88 percent of the director's salary in seven years.

The decision to cap our wage was an easy one. We had already made such a commitment and in the early years of the centre, we often worked without a wage. Staff immediately saw this option as exceedingly fair compared to the job description process they had started with. The Working Centre salary policy was officially adopted in February 1989. Twenty-five years later, the policy is as vibrant and relevant as when it was first adopted. Its virtue is felt in the development of a culture of equality. Community grows when people can relate to each other without the burdens of concern for who is making more money or who will get a raise before someone else gets it. The salary policy can be understood as a foundational concept that generates a well spring of reciprocal relationships. The salary policy reinforces the ideals of The Working Centre by practicing what it preaches in the core function of wages.

Going Beyond Competitive Wages

The new salary policy gave The Working Centre a practical document that addresses the problem of competitive wages. This policy was exactly what our emergent organization needed. We had recognized the conundrum of wages. How could we be an organization of justice, if we took wages that were substantially different than the people we were supporting or developing community with? Even in the beginning, we chose to use surplus dollars to build community infrastructure, rather than higher wages.

Our founding ideals critiqued consumer culture. It seemed to us that high school, college and university were merely preparation for a suburban life whose rhythm was controlled by a job, a house, a car and seasonal shopping in the malls. The Working Centre aspired to create a different reason for working. A job could be about substantially giving back to one's community. It could encompass meaningful work, serving others, frugal spending and rich relationships.

Over time, the main benefit to The Working Centre was that the salary policy became ingrained into our culture reinforcing how equally paid each of the jobs were. The notion of pay equality started to settle in. The more workers understood this organizational commitment to equality, the more they trusted the honesty of the enterprise. The burst of energy that created our wide footprint of community development infrastructure can directly be traced to developing a salary policy that respected each individual’s efforts equally.

Richard Layard's Happiness, Lessons from a New Science, affirms what we have learned in practice at The Working Centre. His book challenges economists to move away from behaviourist economics, the belief that purchasing power explains everything. Layard states, “if we cannot know what people feel, we cannot organize things so that they are happy.”[3] His work is an attempt to integrate new understandings of human decision-making within the framework of economics. Why, he asks, do our political and economic leaders sacrifice economic security to the dictates of competition? Individualism and consumerism are both fueled by competition. Both encourage the growing social distortions rooted in the decline of trust among people.

The core of Layard's argument is that in the West we are richer than we acknowledge, we don't work nearly as long as our great grand-parents did, we have universal access to health care, we can travel anywhere we want, we live longer, yet we are no happier. Society is more anxious, distressed, disconnected and constantly fighting addictions. What economic policies would discourage the pollution that people cause by seeking to gain more relative income for themselves?

“Every time they raise their relative income (which they like), they lower the relative income of other people (which those people dislike). This is an 'external disbenefit' imposed on others, a form of physical pollution. If people do not take this pollution into account when they decide how much to work, they are behaving just like someone standing up at a football match. The result will be too much work and a distorted work-life imbalance.”[4]

Layard is in favour of people enjoying their work and the camaraderie that develops through meaningful endeavours. Work should not be about a quest for more money. Economic policy should remove the distorting pollution that results from pursuing greater status through large income increases.

Robert Frank demonstrates that for several decades, wages have been stagnant for the middle class. In order to spend more on houses, cars, and all kinds of consumer items, families have had to take advantage of every angle from working longer hours, reducing savings, going deeper into debt, buying cheaper houses further away that result in longer commutes, and sleeping less.[5] All these options are stressful, they increase the pressures of work, and they feed consumer buying that reinforces the problem, offering little additional satisfaction. Frank does not blame this on a character defect of the middle class. He thinks that they have been falsely led into a “positional arms race” defending goods and status which in the long run leads to welfare losses like reduced leisure, increased stress on families, dislocation and fewer dollars to support the environment we live in – money that could be used to develop the infrastructure for community living – bike lanes, interconnected transit, naturalized parks, water conservation, etc.

The research of Layard and Frank is not widely circulated in the general public. People do not see the social inequality and the welfare losses that are caused by seeking higher incomes at the expense of family and community. Westhues, twenty-five years earlier, created a mechanism for The Working Centre to avoid creating a workplace that pits workers against each other in continual prisoner dilemma games. Instead, Westhues' policy helped to develop beneficial income structures that demonstrated a different approach to wages.

Rooted Principles

The Working Centre salary policy integrates solidarity, reduces income comparisons, creates harmonious environments and teaches cooperation. It starts by embracing a philosophy of generosity. This approach has demonstrated how to combine theory and action to create the conditions for sustainable social change. When Westhues found himself in a meeting where another “positional arms race” was about to be played out, he wasn't interested in waiting around to see who would be the first to blink. In Westhues' way of thinking, “sociology is more than knowledge. It is the interplay between disciplined empirical social thought and social action.” The goal of activist sociology is to respectfully “design and implement social practices that improve on existing ones.” [6]

The result was a salary policy that integrated philosophical and ethical principles into the core of the organization. The continuous growth of our community development projects rooted in wide participation, demonstrates the synergy possible when people work together as equals. 

In 2003, Canada Mortgage and Housing Corporation (CHMC) awarded The Working Centre one of six national awards for affordable housing. The award was for the process of renovating a vacant building into a mixed use project that combined shared housing with a community bike shop, arts space and café.[7] Ken Westhues described the narrow legal ownership of 43 Queen as residing with The Working Centre while the true owners are all the residents, volunteers, tradespeople and donors who turned an empty old building into a vibrant community resource.

In a similar way, our salary policy increased our solidarity with the unemployed and reduced inequality. It gave The Working Centre a mechanism to root our founding ethos into the fabric of the organization and to share it widely.

Solidarity with the Unemployed

The primary social goal of the salary policy was stated as: “The centre's value on alliance and identification with the unemployed and poor.” This act of solidarity stands for the wider goal of moving the values of society towards equality. In the short term, it demonstrates the right thing to do, in contrast to organizational management methods that reinforce status and power by rewarding executives with significantly higher levels of pay.

There are several reasons why this policy aligns itself with those who struggle on low incomes. The first is that the search for more income is self-defeating when you have already reached a level of relative income or have met basic needs. Society's resources are best used to augment the incomes of families and their children who struggle to meet basic needs. Secondly, society's resources are best directed at community based projects and services that make community living more dependable and secure. Local investments can make community living inexpensive for all, if it is aimed at cooperative structures designed to reduce basic costs of housing, food and energy.

The Working Centre has made these kinds of investments. In total we have taken $350,000 in direct government housing grants and have created 40 units of transitional housing that support hundreds of people with low rents and high social supports. We have found significant internal resources to create this housing without going into debt. It has been a conscious decision to direct resources towards assisting those who face multiple barriers to gain access to proper housing.  This process added supportive housing structures to our community.

Layard's research demonstrates that “extra dollars make less difference if you are rich than if you are poor.”[8] Savings from our salary policy are a form of redistribution that have been used to establish community based projects that assist people to live richer lives. This happens in our bike shop, café, community kitchen, thrift stores and gardens. Solidarity for The Working Centre has been interpreted widely to mean developing access to tool projects that directly assist low income individuals to need less money.

Reducing Invidious Comparisons

Externally, the primary goal of our salary policy is solidarity with those we serve. Internally, the primary benefit is the development of a culture that reduces invidious comparisons between workers. Salary inequality in a workplace has a specific way of undermining performance and organizational pride. Workplaces thrive when there is a free and easy interaction between workers. This is the most efficient way to ensure that the thousands of necessary but simple transactions are completed each day.  Free flowing communication inevitably breaks down when there is widespread knowledge in the workplace of wage inequality. This situation creates distrust and results in an unsatisfactory and unproductive work environment.

The Working Centre has endeavoured to create a level playing field so that each worker can reach their potential. Our work culture has been enhanced by not linking salary to a performance evaluation. This is a common sense practice as many jobs, especially in the human service sector, cannot be objectively measured for performance. Developing elaborate systems for punishment or reward only invites unjust comparisons, ignites old social wounds, and undermines trust. Happiness and satisfaction do not come from getting ahead or triumphing over colleagues, but from making one’s community a better place and from the personal recognition of a job well done. Reducing job and pay comparisons helps people enjoy their contribution to the social product.

The hedonic treadmill is the process of becoming accustomed to the benefits of a pay raise such as when a new job comes with a company car. Two years later the family cannot manage without this second car. Earning enough income to support a second car, is like being on a treadmill that keeps moving while you get no further ahead. You have to work harder to continue paying for this new expense.  

The Working Centre salary policy helps people to get off the treadmill by offering a different way of working. The policy promotes long-term stability by helping people identify their income expectations. What is the point of dreaming about getting ahead through social climbing when in fact most people end up on a hedonic treadmill? A cooperative work environment is found through doing what is necessary to craft, to help, to serve, to discuss, to strategize, to support a community of workers attempting to use their skills in the most productive way.

Over four years ending in 2007, The Working Centre added greatly to its community wealth. We renovated two old warehouse buildings, established a thrift store, relocated St. John's Kitchen while adding a medical clinic, showers and laundry, established the Queen Street Commons Café, created five units of crisis housing for women, combined employment services under one roof, expanded Public Access Computers, relocated the computer recycling lab and built five new units of transitional housing on the second floor of 66 Queen. This was made possible by a dedicated group of staff and volunteers, who were willing to fill in holes, pitch in and do whatever was necessary to complete this vision of community. The shared sense of ownership and the celebration that ensued with the completion of each project were a visible sign of the harmony and social cooperation that made the work possible.

By reducing invidious comparison, workers recognize that there is not a ladder of status, where people climb over other people, in an effort to get to the top wage rate.  A work philosophy that emphasizes cooperation over economic social climbing can lessen the wasteful energy consumed comparing wages. These organizations benefit from constant positive communication between workers enabling daily business to be completed efficiently. This is an important part of developing a prosperous organizational culture. 

Greater Income is Not a Guarantee for Harmonious Social Relationships

The goal of media advertising is to exploit feelings of emptiness. The consumer is being convinced to exchange their emptiness for a shopping spree. Advertisers make extravagant claims and they hope the viewer will be lured to spend more. Consumers need higher paying jobs to afford all these opportunities. This viscous cycle draws a false picture of the meaning of work. We think we have to work for money when in fact most people would rather work to learn and create new things. People strive to find meaning in work that has lasting benefit. It is this divide in society that needs to be understood. Why is it so common to trade away meaningful work in order to take a higher paying job? New research is showing that greater income can lead to social distress. When money is the sole goal of a job, then the chances of that job turning out to be unsatisfactory, bureaucratic and stale are high.

Canada in the 1970's had a base of stable industrial jobs and there was not a widespread homelessness issue. 40 years later, Canadian society is richer calculated by rising Gross National Product and the price of housing. However, according to a Canadian survey in 2000, emotional distress now affects 20 percent of the population.[9]During these years we have witnessed a substantial increase in emotional and mental illness. Even as we are richer, our communities are less secure. Homelessness in every major city in Canada continues to grow. Our Psychiatric Outreach Project at St. John's Kitchen has a caseload of over 2000 people with over 1600 contacts each month.

Under the patina of consumer society is an ever growing array of depression, anxiety, substance abuse, and impulse disorders. Many of these psychological responses are the result of unpleasant, harsh environments. Canadian society, like much of the Western world has placed a high value on money, possessions, and appearances, even while there has been a corresponding growth of insecure working conditions. A mobile society that lacks roots wreaks havoc on domestic lives. Layard discovered many countries with annual per capita income of $5,000 had almost the same level of happiness as rich countries with incomes per person of between $15,000 - 25,000. In rich countries happiness from larger increases in wealth were increasingly canceled out by “greater misery coming from less harmonious social relationships.”[10]

What happens to individuals when they work in order to be a functional consumer? What is lost in the process? An individual’s intrinsic motivation is precious and that is what gets buried under a thousand social compromises that are necessary to win a higher paying job to gain the benefits of consumerism. It may be counterintuitive, but social researchers are now documenting the kinds of motivation that lead to unsatisfactory results. Daniel H. Pink documents how financial rewards for work performed, also known as the carrots and sticks approach, reduces motivation, diminishes performance, decreases creativity, and encourages shortcuts, and short term thinking.[11]

The Working Centre may be a micro example of Pink's research. The majority of The Working Centre projects started from pure volunteer initiative. The original ideas for our first projects, the Job Search Resource Centre and St. John's Kitchen, started first as unpaid work. The same is true for Computer Recycling, Public Access Computers, Recycle Cycles, Community Access Bikeshare, our first Community Gardens and our first renovation projects at 58 Queen Street South. The whole infrastructure of The Working Centre had its beginnings, not with paid staff, but with volunteers who were creative and motivated intrinsically. They were responding to gaps in services, human needs, environmental concerns and heritage conservation. There were organizations with money to address these issues. However it was people with limited resources and higher motivation that took decisive action to address these social concerns.  

The Working Centre salary policy is not designed to help our workers become better consumers but rather to respond creatively to the community around them. We opted to pay each other rather equally at modest levels. This can create its own problems as the model is egalitarian in nature. Even before consumer society was thought of, Alexis de Tocqueville was warning about egalitarian social solutions. He loved democracy for the equality that it created, but he wondered what would happen if democratic citizens were too equal. For example, he would have worried about the equal pay provisions of The Working Centre salary policy. When workers are treated equally, Tocqueville could have projected, they will easily settle for mediocre desires.[12] He would have taken for granted that a society of equally paid people would lack intrinsic motivation. Tocqueville would wonder who would do the dishes, who would clear public spaces of clutter, who would work the extra hours to accomplish burdensome tasks, and who would plan the sustainability of economic ventures. Peter Maurin of The Catholic Worker summarized such concerns this way, “Everyone's newspaper is no one's newspaper.” [13] These have always been real concerns in our projects.  

The Working Centre demonstrates that a cooperative work environment can be both equal and productive. It starts by creating an ethic of service, at every level, each striving to do well for the other while achieving the organization’s goals. The salary policy embedded this ethic into the leadership of The Working Centre. This gift has been returned one hundred fold by a cooperative group of workers who have seen the opportunity for creating new structures that serve people in new ways.

We have learned that community organizations are at their best when they create cooperative projects that have lively dialogue and opportunities to directly contribute. This work involves teaching people to use tools “that allows the user to express meaning in action.”[14] Organizations are effective when they create processes that generate meaningful work, the ability to overcome obstacles and develop pride in the work accomplished. This is the most efficient way of solving community problems and it is all part of the long marathon of history, working to create structures of equality.

Hierarchical organizations tend to pay one group of workers substantially more than other workers. At The Working Centre we look at this issue from a different perspective.  In a highly functioning organization it is essential that those who have broad skills to analyze and act on complex situations are free to use those skills to their maximum potential. These skills traditionally have been biased towards receiving the highest pay. Is it fair that some skills are reimbursed many times over other skills? What about practical skills that entail physical endurance, like cooking, cleaning, gardening, moving, repairing, and all construction skills? How about more cerebral jobs like listening, counselling, bookkeeping, computer programming, report writing? When you reflect on the continuum of jobs in an organization, then fairness demands that each job is as important and as necessary as the other.  Our organizational structure is strongest when there is an easy flow of communication between workers and projects. Structures of equality make these daily transfers of information convivial and this reduces stress and makes possible an ongoing harmonious place for workers and volunteers. 

A winners and losers environment replaces social relationships with money. In contrast, The Working Centre has created a harmonious social milieu by promoting equality and simple living. This positive oriented work has resulted in bursts of social innovation.  In decentralized projects, where hospitality and inclusion bring people together to solve problems, an ethic develops to look after the hundreds of small details. If Tocqueville toured The Working Centre he would be intrigued by the easy way each project serves community.

Teaching Cooperation

Dislocation in Western society is the result of our misplaced attachment to material goods. It leaves people alone, isolated and lacking human connections that are necessary to help us through good and bad times. People often choose consumer products over cultivating relationships. Disconnection is made worse by advertising that fills the air with messages aimed at mining the resulting bottomless pit of self-doubt and boredom.  But what are the alternatives? What can communities do to teach and model relationship building?

From its beginnings, The Working Centre has supported grass-roots, cooperative, self-directed, skill-based learning as integral to its service. Every day, people gain competencies in cooking, sewing, computer repair, bike repair, etc. There is more to this teaching, as the approach reinforces distinct and invaluable social skills such as how to teach, learn, and live in a respectful, reciprocal, democratic way. Hierarchical, top-down models of teaching are avoided in favour of more egalitarian models. Teachers and learners take turns talking and listening, showing one another how to do new things.

The Working Centre creates many teaching opportunities through projects that have little or no government support like the community bike shop, Speak English Café, BarterWorks, the vegetarian cooking taught at Maurita's Kitchen, the housing help desk, Waterloo Regional ASSETS (A Service for Self-Employment and Support) Project, Public Access Computers, Self Directed Computer Training, free public computer repairs by volunteers in our computer lab, a bustling furniture and housewares thrift store, and the work skills learned serving the meal at St. John’s Kitchen. Community is enhanced when scarce resources are freed up to build access to projects that build relationships.

The Diploma in Local Democracy is a fourteen week course that helps people to explore a philosophy of citizenship. The project is about teaching how reciprocal relations in everyday life form the roots of a democratic society.  Local Democracy is an expression of building community, of ensuring people are not left behind, of practicing the skills of equality and peaceful coexistence and challenging hierarchy by affirming equal relationships. All these skills can be practiced in workplaces, public agencies, community groups, schools and at home.

Participants define Local Democracy on their own terms;

“These two hours a week have been meditative. Therapeutic in the sense of growth. The     notion that a small community can have a voice, can dream out loud, being able to share ideas that I would not have had the opportunity to share otherwise. It makes me want to take this model elsewhere.”[15]

Ken Westhues' offered his energy to help establish the Local Democracy project in the late 1990's and it continues to evolve, with Sean O’Seasnain as the main facilitator. This teaching project creates another medium for reinforcing a core virtue that is essential for community development. The Local Democracy project cultivates an environment where individuals learn how to responsibly put the community above themselves. This is the essence of teaching cooperation.

Happiness arises from seeking the well-being of others by paying attention to their feelings, realities and economic circumstances. This sensibility must be cultivated to develop one’s happiness. You limit your own ability to be happy when you are an obstacle to others, when you are jealous of their success. The Working Centre has developed learning initiatives to help individuals to cooperate towards sharing the abundance of our society.

Ethical Imagination

When Ken Westhues typed out the salary policy he was thinking along the same lines as Peter Maurin's Easy Essay Better Off;

“Everyone would be rich if nobody tried to become richer, and nobody would be poor if everybody tried to become poorest. And everybody would be what they ought to be if everybody tried to be what they want the other fellow to be.”^[16]

Layard came to the same conclusion 75 years later. “So we have in the First World a deep paradox – a society that seeks and delivers greater income but is little if any happier than before.”  And he adds that in the First World there is now more depression and addiction than 50 years ago![17]

For twenty-five years The Working Centre has implemented a salary policy that pays a fair average wage with equal benefits and holidays, it reduces comparisons and supports a workplace that is productive and useful. This is economics, E.F. Schumacher would say, as if people mattered, it means putting money in its place facilitating beneficial exchanges. The Working Centre salary policy works for future planning by giving workers time to collaborate to develop frugal skills, sharing, partnering, to strengthen their surroundings with rich social bonds. Money is fleeting compared to relationships which provide our real sustenance. The Working Centre salary policy is a model that is transferable to other institutions and communities.

A salary policy is only a piece of paper. What is most important is a workplace where supportive relationships thrive. This means giving workers time to be with family and friends when they are grieving or supporting the sick, recognizing the importance of building personal relations. It is vital to offer volunteers and staff, the people who form The Working Centre community, the same kinds of mutual support that individuals get through our services. This creates an unbroken chain of solidarity.

Human beings are made for giving; this is how relationships and community develop together as people strive to pursue the best that they can achieve. Society is in every way richer when a cooperative environment is encouraged. Gifts of the spirit, offered in friendship, offered for the building of community, in a spirit of peace and joy, are gifts of the heart that emphasize our commonness. The experience of The Working Centre has shown that a community dedicated to seeking the happiness of others will find that joy returned one hundred fold.