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.

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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.   Read More