Working for All You’re Worth: Some More Thoughts on the Minimum Wage Debate

A few weeks ago, I wrote a brief reflection on the recent debates over the minimum wage for Capital Commentary.  My purpose there, and in the several conversations I’ve had in social media on this question, was not really to advocate for or against raising the minimum wage; in my view, the economic and political complexities of the issue are such that I’m inclined to be suspicious of anyone who’s confident they know the right answer to the question.  My main concern is to call out really bad arguments against the minimum wage, particularly those peddled by Christians.  There may well be a good case to make against the minimum wage, but it seems awfully hard to find people making it sometimes.

So I want to reflect a bit more fully on what’s wrong with one of the common conservative arguments against the minimum wage: that the laborer is only worth his productivity.  The argument goes something like this: Sure, it sounds wonderful to pay people a living wage, but a worker’s job is to contribute productivity to a business, adding value by his labor, and ultimately, the business cannot afford to pay him any more than what he brings in.  If a McDonald’s worker can only contribute an average of $6 profit per hour to the company by his labor, then McDonald’s will go broke pretty quick paying him $10/hr.  Accordingly, raising the minimum wage will simply increase unemployment, and instead, therefore, we should focus on raising worker productivity.  So Acton’s Joe Carter says,

“Instead, we should focus on faster economic growth and improving productivity of low-skilled workers. By increasing the value of a worker’s labor, we make it possible for them not only to feed their family but also to help fulfill the needs and desires of their neighbors….The goal should not be to merely give people a living wage but to help them gain the ability to make a life for themselves based on the value of their labor. What the working poor need most is marketable skills and productive jobs, not more handouts disguised as ‘wages.'”   

Now, arguments like this have a weaker, pragmatic form, and a stronger, moral form.  The moral version, favored by doctrinaire free marketeers, argues that a laborer ought not to be paid more than his productivity, which marks the just price of his labor—as someone put it to me in a Facebook discussion, “if you can’t find somebody who values your labor at $X/hr., then you have no right to employment.”  The pragmatic version would be: “It’s a cold hard world out there, and the fact is that the only way you’re going to get McDonald’s to employ people at $10/hr. is by making their labor worth $10/hr.”    There are problems with both versions, but I will begin by tackling the moral problem.

Read More


Gleaning from Richard Bauckham

Readers of my old blog may recall that around two years ago I was wrestling for several months with how to understand and apply the Old Testament economic laws–their relative moral and judicial significance, in particular.  Well, the conclusions that took me six months and research and writing to haltingly articulate, Richard Bauckham, with disarming surefootedness, manages to establish in five splendid sentences of his book The Bible in Politics (which, by the way, I cannot recommend highly enough, and hope to be blogging frequently about over the next week or two).  I here quote most of the fantastic paragraph in which these five sentences appear:

“The law, as we have seen, is concerned with broad principles of social morality and with illustrating their specific application.  The specific examples include both laws enforceable in the courts and moral exhortations.  Leviticus 19:9-10 [the law of gleaning] is not in the form of judicial lw and, we may guess, would not normally have been enforced in the courts.  But on the other hand, it would have been open to the elders in any particular local community to choose to enforce it with legal sanctions.  In any case it had the force of social custom, which in small, close-knit communities like those of ancient Israel can be very effective. In such a society, social disapproval, which itself is inseparable from shared religious beliefs, can be as important a sanction as legal punishment.  Thus to insist that these verses envisage private charity rather than state welfare–or vice versa–is to introduce anachronistic distinctions.  Morevoer, as this example illustrates, the distinction between moral and civl law scarcely helps us with the problem of modern relevance.  Whether we consider it a moral or civil law, Leviticus 19:9-10 is a culturally specific* law.  It was an effective means of provision for the poor in the economic circumstances of ancient Israel, but would not be in modern Britain, where, on the one hand, most people are not farmers, and, on the other hand, the majority of the poor, who live in the inner cities, will not be much helped by the food they could gather on country rambles.  The relevance of this law for us can be discovered only by discerning the principles at work in it.  How far these principles can or should be embodied in social legislation in our society, rather than being matters of purely voluntary social morality, is something we have to decide in the concrete circumstances of our own society.  No attempt to distinguish between moral law and civil law in ancient Israel will help us there.

 

*all italics, except this phrase, are mine.


Wealth Inequality–A Moral Problem?

One of the more interesting chapters in Jay Richards’s Money, Greed, and God is chapter 4, “If I Become Rich, Won’t Someone Else Become Poor?”  This chapter brings us to the heart of the impasse between left and right, with the one side contending that “the rich are getting richer and the poor are getting poorer” while the other insists that, on the contrary, the rich are getting richer and the poor are getting richer too…just not as fast.  From a certain perspective, both claims are true.  Even the right, in its more honest moments, admits that income inequality is growing.  Which means that, in relative terms, the poor are growing poorer.  But is absolute poverty increasing?  The right denies it but of course, it depends where you are talking about–in sub-Saharan Africa, it is.  On the whole, my limited grasp of the statistics suggests that the right is correct, global absolute poverty is slowly declining.  

Now, from the right’s standpoint, this means we do not have a moral problem–the rich are not getting rich at the poor’s expense. (In fact, from the right’s perspective, this would be true even if absolute poverty were increasing; so confident are they in the wealth-creating power of the market, that they would have to chalk this up exclusively to the failures of the poor or their governments).  Richards thinks that he has demonstrated another example of “zero-sum thinking,” revealing the left’s logical and moral idiocy.  If the poor are getting richer too, then why does it matter how fast the rich get richer?  It’s not a moral issue.  

Here we find a clash of moral intuitions–Richards and his ilk honestly feel that there is no moral problem here, whereas others find a glaring injustice.  The source of it, I suggest, lies in different presuppositions about property.  

 

Before dealing with the presuppositional issue, there is a prior hole in Richards’s argument worth addressing.  First, as I mentioned in my review, just because the global market isn’t necessarily a zero-sum game doesn’t mean it never is.  Sometimes the rich really do get rich by ripping off the poor.  Richards says incredulously, “For decades, Latin American theologian Gustavo Gutierrez has looked around at the poverty in Latin America and concluded that Latin America is poor, in part, because North America is rich: ‘The poor, dominated nations keep falling behind; the gap continues to grow.’  It’s as if the United States sucks the wealth out of Nicaragua, El Salvador, and Peru and leaves Latin Americans without food or houses or land.”  

What a bizarre notion!  It’s as if he thinks that American corporations swept into Central America in the middle of the last century, made deals with local barons to monopolise as many of the resources as possible, worked with corrupt government officials to maintain the status quo, and then, when popular movements started to call for a more equitable economic and political order, they went to the US government and asked that the “communists” be brutally suppressed.  Then, it’s as if the US government went in with guns and money and troops and specially-trained torturers and death squads and helped thugs within Central America wage war against their own people for a couple decades, reducing the people to misery, while American corporations continued to profit.  Can you imagine such a cock-and-bull story?  Preposterous!  And yet, of course, thoroughly documented fact.  

So Richards should be more cautious about cavalierly dismissing the idea that there might be a direct causal connection between enormous First World wealth and appalling Third World poverty.  So eager is Richards to deny that poverty is often the result of exploitation that when it’s undeniable, he denies it in the main text and then admits it sheepishly in an endnote.  After insisting for nearly two pages that we should have no problems with the massive wealth of the world’s three richest people–Bill Gates, Warren Buffett, and Carlos Slim Helu–because they’ve “created” wealth, rather than taken it, he tacks on a little endnote saying that actually, Slim Helu might be something of a crook, but his point still stands. 

 

But on to the main issue.  Let’s assume that the rich are not taking money away from the poor.  Let’s assume that they really are creating wealth by upright means, and it is slowly, haltingly, trickling down to the poor.  Is there still a problem with this picture?  Could we still say that the wealth of the rich comes at the expense of the poor?  Well, yes, duh.  Richards is untroubled by the fact that Slim, Buffett, and Gates together have as much wealth as the world’s 600 million poorest people–unless they stole it from the poorest, then everything’s fine with this picture.  But St. Basil would beg to differ:

“Are you not greedy?  Are you not acting like robbers?  Are you not usurping that which you have received merely in trust?  He who steals some one else’s garment is called a thief.  But he who fails to clothe the naked even if he were able to do so, does he not by chance deserve to be called by a different name?  The bread which you hold back actually belongs to the hungry; the garment which you lock in your chest belongs to the naked; the shoes which rot in your store house belong to the bare-footed; and the money which you are hiding…belongs to the needy.  Thus you do a great injustice to all those whom you could succor…. ‘Whom do I injure’, says the greedy, ‘if I merely keep what is mine?’  But then, tell me, what is really thine?  Wherefrom did you take it?  And how did it get into thy life?  Is the greedy person not like the man who, after having taken his seat in the theater, restrains all latecomers from attending the show, thus acting like one who considers his own that which actually is meant for the common use of all?  Are not the rich of this type?  For after having taken care of themselves by crude usurpation, they declare that everything they have gained by this usurpation is theirs forever.  But if any man would claim only what he really requires in order to satisfy his true needs, and would leave to the needy what exceeds his own immediate needs, then no one would be rich, and no one poor.” 

Richards, Schneider, and Co. will tell us that Basil is a slave to zero-sum thinking.  He thinks that the rich can only be rich by directly ripping off the poor, and they will tell us that they may have been true in Basil’s day, but not in ours.  But listen to Basil.  This is only one small part of his concern.  His main point is that, however you got the wealth, however justly it may seem to be yours, you are stealing by failing to give it when you are able.  From Basil’s standpoint, Buffett, Gates, and Slim’s billions actually belong to the 600 million hungry poor.  We might argue about exactly what this should mean in practice–clearly, you can’t just transfer a couple hundred billion all at once to slum-dwellers in Mumbai, and ideally, we should find ways of sustainably creating wealth for them; and we could argue about whether this “theft” ought to be dealt with legally.  But that’s not where the disagreement lies right now.  Richards sees no relevant moral duty here, no sense in which the superfluity of the rich, not shared with the desperately poor to the fullest extent possible, represents an injustice, represents withholding something that belongs to another.  I dare say he would be flummoxed at the very idea. 

Basil’s rhetoric certainly is revolutionary rhetoric, but the basic notion underlying it is quite simple, and was shared by his successors in the Christian ethical tradition for more than a millennium; the same intuition, I expect, underlies the sense of injustice that many today instinctively feel about global inequality, an intuition that Richards simply cannot relate to.  It is the sense that the world is “meant for the common use of all.”  Private property may be well and good, argued Aquinas, but it must serve the end of common use.  Each person’s right to the use of their own possessions was logically, temporally, and morally secondary to the right of all men to a sufficient share of the earth’s goods.  Again, what this meant in practice had to be worked out carefully–Aquinas did not want an anarchistic free-for-all, in which everyone grabbed for his share.  But he wanted to establish this principle of justice as a starting-point.  And if you accept that, from the standpoint of justice, God created the world for the benefit of all, then there is a problem if the wealth of the world doubles, and 90% of that increase goes to 1000 people, and only 1% to 1,000,000,000 people.  Ideally, you should have a system in which wealth is not created so unequally, but of course such a perfect system is impossible to come by.  If the initial distribution comes out radically skewed, then justice requires redistribution, Aquinas would say.  

If you do not accept the priority of common use, and thus of distributive justice, then it might be a matter for concern and compassion if hundreds of millions die in poverty, but the wealth of the wealthiest is simply irrelevant to this issue.  Questions of justice are irrelevant to this issue.  Charity may be encouraged, but even that shouldn’t be emphasised too heavily; the best thing we can do, Richards and Schneider suspect, is working harder to make the global economy grow and create more wealth, which will hopefully eventually find its way into the hands of the poorest.  

 

Now, perhaps you cannot accept the priority of common use; perhaps you really can’t get your head around distributive justice.  Fair enough.  Even with a number of radical influences, it took me a while.  But it’s important for conservatives to recognise that there is such a principle, widely held to, and in fact historically speaking, the norm among Christian ethicists.  The concern of so many over global inequality, over the fact that “The three richest people in the world control more wealth than all 600 million people living in the world’s poorest countries,” is not just sentimentalising rhetoric and fuzzy thinking, or a juvenile inability to understand that “wealth is created”–rather, it is a morally coherent and cogent posture that needs to be debated at the level of moral theology, not name-calling and statistics-flinging.