The moral complexities of the minimum wage

A series of protests by fast-food workers over the last few weeks were designed to bring the issue of the minimum wage into greater focus. The moral warrant for such measures seems obvious: people are having trouble making ends meet at their current wage. The just thing to do seems to be to require employers like McDonald’s to pay their workers more. But while such advocacy has brought greater visibility to the challenges faced by many workers, there are some unseen and unappreciated complexities involved with minimum-wage mandates.

One group that is often overlooked in such debates are the unemployed, or at least those who are unemployable at the current minimum wage. There are some intuitive as well as empirical connections between higher labor costs and greater levels of unemployment. When governments set floors for wages, those whose labor isn’t viewed by employers as worth compensating at that level are effectively priced out of the labor market. The pressures on labor markets are significant enough today without adding to the hosts of those who are already under- or unemployed.

The corresponding shift to those priced out is the influx of others who aren’t currently competing for minimum-wage jobs who will be priced in to a new, minimum-wage labor market. Anecdotes of baristas with graduate degrees in the liberal arts abound; as compensation improves at fast-food restaurants, the level of competition for those jobs will also increase. It’s an extreme example, but instructive nonetheless: the government in Greece recently announced a move to sack all university security personnel who did not have masters or doctoral degrees.

And what about the current minimum-wage workers themselves? One assumption is that the level of compensation is disrespectful: “We are worth more than $7.25/hr!” These sorts of slogans at labor-union events and protests capture a true insight. The human person created in God’s image is of inestimable value. But what the wages represent is not a commentary on the value of the human person as such. Rather, wages are a sign, a token really, of the value of our work to others. What we are paid is a representation of how serviceable, and therefore how salable, our work is. It’s a natural instinct to tie our self-worth to what we are remunerated in the marketplace. But this can be a misleading and potentially destructive identification.

When we aren’t paid what we think our labor is worth, we have a number of options. We can strike or protest for higher wages. We can implore government to require our employers to give us more money. But we can also improve the quality and effectiveness of our labor. We can improve our output as workers. We can gain new skills and experience that makes our work more valuable.

This reality highlights another unseen aspect of the minimum-wage debates. We often focus on the challenges faced by minimum-wage workers in their current situation. But the reality of most minimum-wage jobs is that they aren’t really suited to be work for a lifetime. These are, by and large and by definition, entry-level and stepping-stone jobs. There’s a sense in which it is dishonoring to the potential and innate dignity of the human person to presume that they should work for the rest of their lives as a line cook at McDonald’s. In fact, we might say there’s something wrong with a system that would incentivize people to remain in unfulfilling jobs simply because they pay well enough to live on comfortably.

As we raise the lowest rung on the economic ladder, more will be left behind. That’s a reality of the morality of the minimum wage that shouldn’t be ignored, even amidst the urgent pleas of those who are currently blessed with employment, however unsatisfying. The only thing worse than having a minimum-wage job might be not having a job at all.

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You present "the marketplace" here as some kind of independently-functioning system. While you acknowledge that the marketplace's values are not the Kingdom's values, you present the marketplace's values as immutable and independent from society. For better or worse, we are implicitly asked in this piece to accept that "the marketplace" will value what it wants to value, and whether or not we agree with what "the marketplace" values, we couldn't expect to change it.

That is, quite simply, a falsehood, plain and simple. There is nothing natural, objective, or independent about "the marketplace"; it is a system constructed by human beings and continuing to exist only by constant human assent, for managing the distribution of resources.

Approaching this issue with "the marketplace" as an unchallenged assumption is, in my opinion, a grave error, and one with significant moral implications—because the guiding assumption of the contemporary global-capitalist marketplace is that the primary purpose of a business is to reap as large a profit as possible for the capitalists who own it.

In the context of that assumption, it is only natural that minimum wage laws shouldn't make sense, since the owners of the company have a financial interest in reducing costs and increasing income to the extent that the market will allow. If they could get workers to work the deep-fryer for a penny per hour, the assumptions of contemporary global capitalism would present that as the most moral choice, as the business would be more effectively fulfilling the purpose of enriching those who own it than if it paid them a quarter per hour.

But is the assumption that businesses exist solely to enrich their owners an assumption appropriate for citizens of the Kingdom of Heaven? Is it an assumption appropriate for members of a community, a neighborhood, a nation, a species? Is it the best possible way to distribute resources such that everyone has the opportunity to fulfill his or her Kingdom purpose in life?

Those are the questions that we need to ask ourselves long before we start talking about the minimum wage—and those are precisely the questions that this piece almost completely glosses over in assuming the existence and nature of "the marketplace" as a given, rather than interrogating and challenging its values in the name of the Kingdom.
I intended the piece as a discussion of minimum-wage legislation, not a treatise on the marketplace as such. Your speculations about my framework for evaluating the issues at hand avoid the substance of my argument, and in turn raise the question of why you think that federal wage mandates are a valid tool for promoting what you term here "the Kingdom's values." What are your assumptions about "the political" that would warrant such a conclusion?

The moral obligations between business owners, employees, and customers are much more complex and variegated than a simple juxtaposition between businesses existing "solely to enrich their owners" and whatever your vision of the Kingdom means in concrete terms. It would be interesting to explore, for instance, in more detail the phenomenon of "conscious capitalism" and the examples of Whole Foods and Costco and how their very existence and flourishing coheres with your description of "contemporary global capitalism."

Nothing in my piece should be construed as closing off discussion on these matters; indeed, much of what you say should resonate positively with Christian business owners. There may well be a moral obligation on the part of employers to provide employees a living wage, but from this it does not follow that minimum-wage legislation is the best, only, or even prudentially advisable way of realizing such obligations.

Policies ought to be judged not merely by the salutary nature of their aims but by their concrete consequences, intended and otherwise. Those are what I was trying to highlight.
Jordan, thanks for this piece. I think it's a very important topic and I appreciate ThinkChristian discussing whether a wage increase would always work out well for low-wage employees.

On that issue, I would have liked to see more details on why you think higher wages means less jobs. It seems to me that higher wages also means more spending power in the hands of people likely to buy a product, meaning that the businesses could charge more for their products or even just make up for the profit loss by selling more units at lower per-unit profits. I get that pay-raises must be paid for, but I'm not sure the case that raising the minimum wage means more unemployment is so simple as you make it out to be here. The Department of Labor didn't think so, at least back in the 1990s. (I'm sure there are more recent studies, but I don't have them at hand.)

I also agree quite strongly with your assertion that "wages are a sign, a token really, of the value of our work to others". I think you and I are coming at this from different perspectives, and I want to respect the fact that this was a short piece on a much larger issue. But I did want to mention that when I read the Bible I see a clear theme that work and economic systems are not morally neutral, and that they should provide both meaningful work and basic material needs for everyone - meaning that some approaches t economics really are better than others. On the off-chance you or anyone else is interested, my comments are here.
I think you are probably right to challenge the idea that any raise in the minimum wage will have a definable and measurable increase in unemployment full stop. What I really mean to do was show that the cost of labor is one of the pressures among many others and that we can expect at least some effect. In some cases this might mean fewer hours and therefore an increase among the under-employed rather than just the unemployed as such.

Your longer comments deal in great part with your understanding of my view of the career path. I appreciate that you understand and take into account the brevity of the original piece, and I'm thankful that you've provided me with an opportunity to fill out some of those comments here.

In many cases, you are right, minimum-wage jobs don't end up being transitions to anything else. In some cases, this makes some sense. You could also read my comments to imply that I don't think minimum-wage labor can be meaningful; that's far from the case. Maybe some people are called to be line cooks at McDonald's. That's at least a possibility with which we ought to grapple.

What I really mean to point to is the role that such jobs can play in the lives of many people. Many of the people working at minimum-wage jobs probably aren't called to those jobs as long-term careers. So mobility certainly is a key feature of the just ordering of a society.

I would also like to push back a bit about the idea that minimum-wage work in many cases has nothing positive to offer that might allow for the development of skills, experience, and expertise that would increase mobility. As you note, much of what we think is governed by our own experiences, so let me draw on one of my own to illustrate the point: one of the worst jobs I ever had was cleaning a meat room in a supermarket in Detroit for an illegally low wage. I at least learned the negative lesson that I didn't want to be doing that kind of job for the rest of my life, and was therefore motivated to do something about it (in the short term that meant "moving up" to bagging groceries). Bad jobs can teach us to be dissatisfied with bad jobs.

I also think that it is possible to discount the meaningfulness of perseverance and what holding down a job, any job, for an extended length of time can mean, both for personal development as well as for future employment prospects.
--"I also agree quite strongly with your assertion that "wages are a sign, a token really, of the value of our work to others"."--

That's an assertion I question, actually, because I think it's missing a clause. It should read, "wages are a sign, a token really, of the value of our work to others *who have money*."

People who serve the poor, who teach our children, or who care for the sick and elderly, to name a few, are valuable beyond measure not only to the people they serve but to society as a whole. But because the people who have money value investment bankers more, the investment bankers are paid six- or seven-figure salaries while those who serve the people Jesus cared most about are often not even paid above the poverty line.

Why is it that determining the value of a person's labor is done by those who have MBAs and plenty of money, rather than by society as a whole? More importantly, as Christians who are faced with the rather obvious fact that the things valued by people who have MBAs and plenty of money tend to be the polar opposites of the things valued in the Kingdom, what voice can the Church have in reorienting our social, economic, and legal values toward Kingdom values and away from Corporation values?
I remember when a few years ago, I worked for a Christian company, and they only paid minimum wage because it was their policy. They said that they couldn't afford to pay higher wages due to it being a non-profit organization, yet they drove expensive cars lived in luxurious homes, and the business expanded rapidly.
This may or may not be directly associated with the original blog, however it does illustrate how employers can take advantage of laws and legislation to their advantage.
The worst part, however, is that so many Christians are taking advantage of these laws and their staff to their own ends. It really disturbs me that Christians are often worse employers than many secular ones. In my onion, Christians should set the example and provide a positive workplace environment. I understand that a new business may have to start off with minimum wages until they become more established, but it's a false economy to only ever pay minimum wage. The employer I worked for had a very rapid staff turnover which resulted in constantly hiring new staff, whilst experience walked out the door.
"Why is it that determining the value of a person's labor is done by those who have MBAs and plenty of money, rather than by society as a whole?"
Actually it is the other way around. Wages ARE set by society and particularly those who don't have plenty of money. A successful MBA is able to determine what value the society in which he operates places on a particular form of labor.
An MBA who decides to pay a fast food server $25/hr will not have a restaurant for very long - either he will run out of money first, or he will try to raise prices and then he will run out of customers and then run out of money. Our society simply doesn't value $10 McDoubles, and there are plenty of people who WILL work for minimum wage.
Conversely, if that MBA decides to pay a skilled programmer $25/hr, he will have a hard time finding one who is willing to work for that rate. While he is waiting to find one, his competitors will happily pay what it takes to hire someone who can get the job done.
I got your point here Peter Knight. I just couldn't imagine that Non profit organization can do such thing as that. I also notice that some business establishments are "constantly hiring new staff, whilst experience walked out the door". Because most employers hate regularization due to increase in minimum wage. This is unfair, right? Policies are also taken advantage. It turns out that the amendment of raising the federal minimum wage is just a joke.
To increase or not to increase? Unlike most retailers, Costco is siding with President Obama in his call to raise the federal minimum wage to $9 an hour. In fact, it would do the President one better, supporting a minimum hourly wage of $10.10. Article source: Raising the minimum wage.

 

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