My colleague Jared Pincin and I have taken to the pages of the Newark Star-Ledger to make an ethical case against President Obama’s proposal to raise the minimum wage from $7.25 to $9.00:
In addition to the economics, think of what the minimum wage says ethically. It tells low-skilled workers that they are not allowed to work. Imagine a teenage boy who because of his lack of skills and work experience can only produce $6/hr. of value for an employer. Even the most kind-hearted folks can’t afford to pay someone $9/hr. to produce only $6 of value. That’s not financially sustainable. But, if someone could hire him at the $6 rate, he may eventually learn valuable skills that would make him a better, more productive employee. It is important for young people and poor people to have a chance to work at a low paying job in order to build the skills and experiences necessary to get a better one. The minimum wage says: you’re not a very effective worker, so we’re not going to let you work at all.
According to the BLS, the teen unemployment rate is currently 23.4 percent. Shouldn’t we make it easier for them to work, not harder? Labor, in all spheres of life, whether “economically productive” or not, is dignified and dignifying to the worker. As Pope John Paul II wrote in Laborem Exercens, through work man “achieves fulfillment as a human being.” As a society, we should seek to affirm the goodness of honest work.
As Nathaniel Peters observed, summarizing a recent editorial from Arthur Brooks, conservatives must not only care about those in need, they must “make the public argument that what they believe and work for is good for the poor.” If we are going to be economic conservatives, we should be so because it is humane. To be humane ascribes dignity to man and ultimately to the creator whose image man bears. Efficient economic organization is not an end in itself. What is good must be the goal.
Others have been sounding a similar note on the minimum wage. A recent Wall Street Journal editorial concludes “It’d be nice to think that some Republicans, even one, would make the moral case that the minimum wage hurts the poorest workers.”
Laborem Exercens provides a beautiful and jarringly realistic assessment of work. After noting both the creation mandate to “subdue the earth” and the toil and hardship we encounter because of the fall of man, Pope John Paul II wrote,
And yet, in spite of all this toil—perhaps, in a sense, because of it—work is a good thing for man. Even though it bears the mark of a bonum arduum, in the terminology of Saint Thomas, this does not take away the fact that, as such, it is a good thing for man. It is not only good in the sense that it is useful or something to enjoy; it is also good as being something worthy, that is to say, something that corresponds to man’s dignity, that expresses this dignity and increases it. If one wishes to define more clearly the ethical meaning of work, it is this truth that one must particularly keep in mind. Work is a good thing for man—a good thing for his humanity—because through work man not only transforms nature, adapting it to his own needs, but he also achieves fulfilment as a human being and indeed, in a sense, becomes ‘more a human being’.
March 11th, 2013 | 1:31 pm
It’s not all that effective if Democrats then point to poor people who’d be helped by raising the min wage. Any effective argument has to address both the disemployment effect and the anti-poverty effect. Conservatives/Republicans do have a great answer in theory; expand the EITC and the child tax credit. It helps the poor without any disemployment effect. Economists favor it over the min wage. But no Republican even brings it up because it’s government spending. Unless the right gets more comfortable with at least some forms of welfare spending, the public isn’t going to believe any claim that the GOP is looking out for the poor.
March 11th, 2013 | 2:10 pm
The issue of minimum wage has come about precisely because employers (of course not all employers) have tried often and in many places to pay workers less than the value of their work. There is an important question to be grappled with in this piece, but it over-emphasizes the “work is good for the soul” type of thinking at the expense of the fact that minimum wage is simply not enough to survive in this society, and that is the fundamental problem that must be dealt with. Most people who are working minimum wage jobs know more about what it’s like to “work” than those making well over, so it’s hard not to read this as a little condescending and confused.
March 11th, 2013 | 2:15 pm
The problem with arguing this with many proponents of raising the minimum wage (which I certainly understand and sympathize with in many ways) is that trying to explain the economics of it just doesn’t work. Proponents often have an almost Marxists conception of the employer/employee relationship, and assume that the only thing preventing an employer from paying his workers more is greed. Obviously that isn’t true, and there are plenty of struggling small businesses that would love to hire more teenagers at $5/hour and simply can’t afford to–and plenty of teens who wouldn’t mind working at that rate!
March 11th, 2013 | 3:23 pm
A thousand amens to the point that conservatives need to show how their policies are humane.
My question is whether or not unemployeed teens are the main people being affected by a low minimum wage. What about lower class and lower middle class families in which the breadwinner(s) is/are trying to support a family, they’re working full time, and they still can’t make ends-meet. What do you tell them? Sure, there will be cases where they could cut expenses to make things add up, but I’ve spent the past two and a half years post college working jobs that were functionally minimum wage and it was really, really tight–car insurance, rent, groceries, utilities, plus the occasional movie or dinner out… it doesn’t take much to burn through the ~$1200 or so per month you make working minimum wage jobs. And if you have medical problems? You’re almost certainly screwed.
I’m not sold that raising the minimum wage is the best way to handle it, but from where I’m sitting I’m not sure I see a better one.
March 11th, 2013 | 3:51 pm
The problem with arguing this with many proponents of raising the minimum wage . . . is that trying to explain the economics of it just doesn’t work.
Studies of whether or not raising the minimum wage contributes to unemployment are so mixed that ideology, not economic argument, generally determines what a person believes. Liberals tend to identify with poor workers, and conservatives tend to identify with employers.
Those who oppose the minimum wage in the name of compassion for the poor are in disagreement with the US Conference of Catholic Bishops and Catholic Social Teaching in general. The Catechism says:
Of course, to American ears, that comes perilously close to, “From each according to his ability, to each according to his need.” In American capitalism, Catholic Social Teaching goes too far even for liberals, who are not about to abandon the idea of “equal pay for equal work” for basing a worker’s pay even partly on what he or she needs.
March 11th, 2013 | 3:57 pm
I was discussing this with my wife just yesterday, and I am curious to know more specifically the arguments about how raising minimum wage would do harm, how one can claim that a person only does so much quantifiable value of work. It is hard to argue against someone using Laborem Exercens itself to claim that we shouldn’t pay people less than a livable wage. How do we convince that some work is worth only so much, and that a person will be sure to earn more as their skills and output improve?
March 11th, 2013 | 4:45 pm
“In addition to the economics, think of what the minimum wage says ethically. It tells low-skilled workers that they are not allowed to work.”
No it does not. The minimum wage says that honest work is honest work, and that otherwise equal honest workers should not be compensated disparately for their labor because of utilitarian metrics like “experience” that are beyond their control.
Mr. Talcott’s argument applied to a low skilled, inexperienced, but otherwise honest and hard working single mother is abhorrent! Do we really want to argue that there are people out there, possibly people with dependent children, who do not deserve a living wage not because they don’t put in the honest hours, but because they don’t work efficiently enough?! (Purposely negligent employees are obviously a different problem, but I assume we are only considering people who honestly work to their ability.)
In Mr. Talcott’s argument, are we not trying to fit Christian ethics and thus Christianity itself into the mold built by contemporary conservatism and libertarian economic policy? Shouldn’t it be the other way around?
March 11th, 2013 | 5:05 pm
It’s not worth it to work for $6 an hour. You are asking these teens to be paid under $20 a day after taxes for a four hour shift, and they will learn no skills worth anything in a job that pays this low except that it’s not worth it to work at all.
It is also two-faced to argue that work ennobles, and yet many jobs aren’t even worth $6 an hour. This means that these jobs are so undervalued that those who do them will never be able to afford to live at full-time work doing so: this is literally under $1000 a month gross a 40 hour week at a time when a single studio apartment’s monthly rent is twice that in urban areas. Even horses at least made enough to have a stable over their head and food to eat.
Please reconsider your stance!
March 11th, 2013 | 6:19 pm
“Do we really want to argue that there are people out there, possibly people with dependent children, who do not deserve a living wage not because they don’t put in the honest hours, but because they don’t work efficiently enough?! ”
But what if the work simply does not return > $9/h of benefit to the income of the business?
If it returns $8.99 then it will take a very long time for the business to run itself into the ground. If it returns $2.99 it will take a very short time for the business to run itself into the ground.
But whether it takes a long time or a short time, a business that pays more for labor than the labor yields in income will fail. Invariably it will fail. Businesses can only exist so long as the value of what they provide (measured in $) exceeds the value of what they consume (measured in $).
Put another way, it is a logically necessity that the outflow rate cannot perpetually exceed the inflow rate.
March 11th, 2013 | 6:23 pm
Especially responding to David here, I agree wholeheartedly with the Dignity of Work, the Catechism, etc. I also believe that employers are themselves enabled to pay their employees a higher wage if they so chose, and if they don’t, are personally at fault. But I think that John hits the nail on the head when he points out that raising the minimum wage is not the only way to ensure that families are cared for and that “low-skilled” (but equally valuable in the eyes of God) workers are valued. Will the GOP accept another solution? No. But raising the minimum wage doesn’t have to be the only way. The Catechism also never blames a government for failing to raise a minimum wage, but puts the moral blame on employers.
March 11th, 2013 | 7:24 pm
It is perhaps possible that raising the minimum wage will help out a few people who are already employed. Having said that, the quotation from the Catechism really isn’t relevant: “Agreement between the parties is not sufficient to justify morally the amount to be received in wages.” Justify morally, no, but justify legally? I would say yes. The alternative is surely a form of Marxism, isn’t it? Isn’t the Catechism calling on employers to perform their moral duty of paying a fair wage, not on the state to do it for them?
I would like to hear from the left how any benefits derived from increasing the minimum wage wouldn’t be almost completely negated by such side-effects as:
- increase inflation due to higher prices charged for goods by employers who need to cover additional labor expenses
- reduced hours for employees who get this “raise”
- reduced hiring
You could try to impose additional regulations to somehow correct for these errors, but the system would quickly become highly complex, and history does not provide many examples of successful managed economies.
It is of course painful to see single mothers unable to provide for their families. I would first force the father to support his children, then have programs to provide food and shelter (of course such programs already exist), but I wouldn’t raise the minimum wage. There is always the chance, isn’t there? that the employer may decide to lay off the employee instead of paying a higher wage. Are you willing to take that chance?
March 11th, 2013 | 8:03 pm
My two underemployed children, both 2012 college graduates, have noticed a proliferation of so-called “internships” that probably used to be entry level or minimum wage jobs for high school graduates. Now, however, employers are demanding BA degrees or higher and often pay nothing. Here are two that I thought were especially questionable:
Job 1: Sales Clerk at gift shop of the US Holocaust Memorial Museum. Duties entailed manning the cash register and stocking shelves. BA or MA degree required, unpaid, no college credit.
Job 2: assistant to artist. Duties entailed buying supplies, stretching canvases, transporting art to and from galleries. $5 per hour plus occasional lunch. BA strongly desired. No college credits.
These “internships” offer nothing to a college graduate seeking to start a real career. Plus, they take work away from teens and people without college degrees. It is cynical and cruel. I wonder that it is legal, but I guess the term “internship” is golden.
March 12th, 2013 | 1:14 am
Thomas, then capitalism is inherently unstable because a large amount of its workforce needs to be paid a rate that will not allow them to sustain themselves, let alone a family in order for most businesses to even survive. If this is the case, we should not be talking about minimum wage at all, but preparing for the collapse of most businesses as the cost of living rises and wages remain stagnant.
I also think this is odd, considering we live in an economy where raw goods are so cheap that one can buy a storefull of goods, sell them at $1 apiece, and manage to make profit enough to spawn multiple nationwide chains doing so. The real cost of wage raising would easily be passed on through barely any raise in prices.
March 12th, 2013 | 11:33 am
“I also think this is odd, considering we live in an economy where raw goods are so cheap that one can buy a storefull of goods, sell them at $1 apiece, and manage to make profit enough to spawn multiple nationwide chains doing so. The real cost of wage raising would easily be passed on through barely any raise in prices.”
But the only reason this works is because they are buying vast storefuls of goods and selling them at a tiny margin. There isn’t enough profit on every item to cover any suddenly externally imposed expense, especially marginal ones (i.e., to sell more stuff they have to pay more people to stock and sell it.)
And dollar stores by their very nature can’t have ANY price increase or they lose their raison d’etre.
March 12th, 2013 | 11:45 am
It would be good to know if those critiquing the proposal to raise the minimum wage are required by their own logic to support abolishing it altogether. It would seem so from the arguments put forth thus far. ThomasL, T. O’Donnell? Would justice be better served in your view by ditching the minimum wage entirely and allowing the market to set prices for all labor, no matter how low?
March 12th, 2013 | 1:27 pm
Charlie, in short, yes. But again, I’m a proponent of expanding the earned income tax credit and child tax credit or some variation of them. I also believe in the right to unionize. If the ultimate question is how best to serve the poor, that’s the solution you should want to pursue.
March 12th, 2013 | 1:40 pm
Pentamom, chains like Five Below (all merchandise in the store is $5 or less) do so will no ill effect. Also, for businesses seemingly unable to adapt easily due to tiny margins, they seem a lot healthier than you think.
Dollar Tree is ranked higher than Mattel, AMD, Petsmart, Ralph Warren, Western Union, and Harley Davidson in the Fortune 500 2012 listings. Family Dollar is higher than Coca Cola. DT has agressively expanded, opening new locations, a B2B division, and purchasing a Canadian chain outright. Dollar General actually outbid Dolce & Gabbana for the dg.com website. These are not as marginal as you think.
Charlie, we already have examples of this. Amazon’s Mechanical Turk does so, and the average real wage is $5 an hour. That is, when the employers don’t rip you off wholesale. One new CNET reporter wrote about making 47 cents in an hour’s browsing. Things like this or Fiver (do something for someone for $5) really don’t give any hope of good work at that price.
March 12th, 2013 | 2:10 pm
Charlie Collier, the market already sets prices for labor. For labor whose value is less than the minimum wage, minimum wage requirements have the effect of reducing that price to zero, rather than raising it, in many cases.
I am not an expert on the economics involved. But the logic seems to dictate that, although the minimum wage may make us feel warm and fuzzy inside, the side-effects may very well negate much, of not all, of the benefits, and may in fact make the situation worse by eliminating low-paying jobs, increasing inflation, and so forth. Or, perhaps it won’t.
That it won’t is simply a hypothesis of the left. The burden of proof rests on them since they are the ones who want to tinker with the market. But that seems to me like a doctor prescribing a medicine that “might” work, but then again might just make things worse. He would be wiser to do nothing, wouldn’t he?
March 12th, 2013 | 4:14 pm
@Charlie
Correct, I do not think there should be a legal minimum wage. It is possible to pay someone an unjust wage (either too low or too high) but I see no reason to conclude that the regulators are better placed than the people themselves to decide if for this person, in this circumstance, for this work, at this time, in this place $X.YZ is a fair wage. That is, I do not see why the regulators/lawmakers, who lack the knowledge of time and circumstance which the participants have, are supposed to override those participants’ judgments and arrive at a better number than they did. And remember that from a moral principle of just wages, this does not apply merely to minimum wages. For any person, for any job, for any wage as moral principle it still holds that the regulators could come in and say that the wage was unjustly high or low.
I read Social Teaching more as saying: “Employer, don’t forget you are employing a *person* not a robot. They have *person* needs which you need to respect. And to the employee it says, the man is hiring you to do a *job*, so do your *job* as unto the Lord.”
It cannot be mandating that the business pay the employee more than the employee contributes to the business as an obligation. While that might be true in exceptional circumstances, it cannot be the *normal* case. This isn’t about greed, it is about sustainability. If I am taking in $X but always spending $X+1, I will run out of $X’s, no matter how many I start out with. It would be like me accusing you of being greedy for not giving away more money than you have. You respond (quite reasonably), “I don’t have that much money,” and I reply (quite unreasonably), “Well, that’s no excuse not to give it anyway!”
March 12th, 2013 | 5:09 pm
Would justice be better served in your view by ditching the minimum wage entirely and allowing the market to set prices for all labor, no matter how low?
Why not, or something proximate? If you wish to qualify market outcomes, a negative income tax would be an efficient way. Manipulating prices (outside the realm of regulating natural monopolies) is a dandy way to generate gluts and shortages. The compensation regime we have in this country is already overly rigid, and you can look at the unemploment statistics and see a result (not that the president knows or cares).
The difficulty you get with aspects of social teaching on this subject (Rerum Novarum and the other encyclicals) is that they seem to assume one of two sets of institutions that (one might wager) were seldom present by the last quarter of the 19th century: one an ecclesiastical economy where you had communal living, little personal property, and stipends issued to those under vows of obedience, the other an economy of master craftsmen, journeymen, and apprentices under contracts of indenture. People have wage employments which incorporate partial and commonly ephemeral relations between employer and worker; the encompassing responsibility the master has for the apprentices living under his roof sits ill with the usual practice of hiring and recruitment. So, to what degree is it an obligation for the faithful Catholic to seek to re-construct the sort of guild economy that appears to be animating the social encyclicals?
March 12th, 2013 | 11:57 pm
Art Deco:
There is another wonderful illustration of a society which does this: no minimum wage, little personal property and guild like communal conditions. It’s called “prison labor,” and its a tremendous business. It’s the ultimate lack of minimum wage. You can make as little as $5 a day. Apparently businesses are so hard up that they need to be subsidized this way, too.
You want another argument for a minimum wage, there you go. It’s the ultimate realization of the current wage trends: wages so miniscule that there is no pretense of earning; it’s all government subsidy albeit a backhanded one.
March 13th, 2013 | 12:58 pm
Dave Dutcher,
I do not know how it is your mind makes the connection between Rerum Novarum, with its admonitions on the responsibilities of employers, and prison labor. It is a complete non sequitur.
Whether or not businesses are ‘hard-up’ or not, common-and-garden uncoerced transactions between employers and employees do not render them ‘subsidized’. The thing is, if a transaction is not coerced, closing the deal has to be worth it for the employer and employee alike, given their other options. Artificial wage floors allow some transactions to go uncompleted.
Standards of living in this country for all classes of society are higher than they were when Rerum Novarum was issued – by a factor of about 6. Per capita income has quadrupled since the year my father was born, trebled since my mother and father completed high school and increased half-again since I was in high school. The pre-tax personal income per capita among the most impecunious third of the population (a melange the struggling working class, poor pensioners, and the lumpenproletariat) is fairly similar to the average real incomes prevalent in the 1920s. The notion that we are all living through marxian immiseration of the working class is not serious.
What happens when you institute minimum wages has been delineated above by other commenters: you raise the wages of employees whose productivity is near the margin and price some potential employees out. That’s what happens. No amount of gassy posturing changes that.
If you wish to re-distribute income (as has been done in this country for more than eighty years beginning with the institution of unemployment compensation in New York at the beginning of the Depression and is done on a grand scale with Social Security), there are means to do that through the tax system. Mercantile regulation – whether…
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