Iceland has no minimum wage. Instead, employers negotiate salaries with collective groups or unions who represent the employees. You must be 18 to work full-time in Iceland. However, mandatory school ends at age 16 and teen workers between the ages of 15 and 18 are highly unemployed. Salaries are high in Iceland because of the small population, universal health care, the high cost of living, and the fact that 88% of the population lives in and around the capital, Reykjavik. Still, it is one of the poorest countries in Europe.
Youth unemployment is extremely high. Josh has discovered that if he hires young people between the ages of (15-18) part-time or no more than 40 hours a week, he can negotiate a much lower salary. The average salary amounts to $12.50 an hour.. Josh staffs young people exclusively and lets them go before they reach the age of 19. Two recent lay-offs have brought this practice to the attention of the staff who feel the practice is not ethical. The workers feel Josh is trying to use the system to avoid paying the workers a decent wage or to gain full-time employment. If Josh does not settle this issue quickly, because the workers will go back to the Collective to ask for higher wages and a guarantee of work after they turn 19. Worse yet, if Jolly Jump’s US teens get wind of the hourly salary difference, they may very well come to expect a large raise. Are Josh’s employment practices unethical? Would his actions be considered unethical in the United States? Discuss the ethics of doing business in another country and cultural relativism.