The Living Wage and Its Critics

The Church sees no contradiction between a market economy and the rights and duties of the living wage—only mutual support.

“Just remuneration for the work of an adult who is responsible for a family means remuneration which will suffice for establishing and properly maintaining a family and for providing security for its future.” —Pope St. John Paul II, Laborem Exercens, 1981
“Just remuneration for the work of an adult who is responsible for a family means remuneration which will suffice for establishing and properly maintaining a family and for providing security for its future.” —Pope St. John Paul II, Laborem Exercens, 1981 (photo: Credit: © L'Osservatore Romano)

After I recently posted a blog called “Is Alexandria Ocasio-Cortez Right About the ‘Living Wage?’”, the Register’s combox, its Facebook page, and other forums quickly filled with hundreds of comments.

First of all, I want to thank everyone for the thoughtful comments, most of which were supportive. The Register’s readers have been very generous over the past two years, and I’m grateful for any thoughtful comment, critical or complimentary.

Obviously, not everyone agreed with the blog. I was accused of endorsing a host of ideas and policies that I either didn’t mention or, as in the case with socialism/communism, that I explicitly condemned numerous times by including magisterial quotes from the several popes. I was accused of omitting the fact that AOC is in favor of legalized abortion, though I wrote that “she supports unchecked abortion, which—among other problematic positions she holds—are absolutely indefensible.” (Incidentally, this is not the first time I’ve criticized AOC and socialism. See here.)

I was criticized for failing to lay out a detailed plan to determine a precise living wage formula (some readers were apparently expected a book rather than a blog).

You get the idea. In some of the most substantive critical comments, several people offered their thoughts on how prices are determined in a free market. Though they had no way of knowing my background, I have some idea about how prices work. I have a degree in Political Science and Economics and, prior to my current profession as a writer, I held several securities licenses while working as an investment consultant for about 17 years. During this time I was immersed in the world of equities, bonds, and stock options, all of which constantly and continuously changed prices—a fact displayed in full-color on the three monitors on my desk. To say that price discovery consumed my thoughts during those years would be an overstatement, but—and I say this with some remorse—not by much.

As price discovery relates to wages, I find it odd that the concept of living wage is lampooned, because it is so often—though certainly not always—realized in the free market. Perhaps that is because living wage is often spoken of as a constant, but it is a great variable. When I was a teenager making five dollars an hour, that actually constituted an excess of a living wage for me because my parents were already providing living expenses. By the time I was blessed with my ninth child, I was still making a living wage, which was (obviously) much more than the five dollars an hour. During that time, my focus was on becoming better at my profession—a focus born of my joyful duty to support my family. For a host of reasons, however, things don’t always work out this neatly, and we need to recognize that the free market does not always provide the living wage that justice dictates. Nevertheless, man’s right to a living wage stands alongside his duty to better himself to earn that wage, and to be able to move if necessary to acquire the position with such a wage.

Many people were shocked that I even mentioned AOC in the blog. Yet, if someone is in error, charity might dictate that we instruct them, and/or their supporters. It’s difficult to see how charity would dictate calling them stupid and thinking “mission accomplished.”

But it was not the misreading of my blog or the pejoratives against AOC that surprised me about some of the combox responses; rather, it was the dismissiveness toward the official magisterial teachings of the popes regarding the living wage issue. One person wrote, “Pope Leo made a mistake by wading into these waters. Churchmen have no competence in these matters, though they like to believe that they do. Even more importantly, they have no mandate from Jesus to teach on these matters. When they do, they are over-stepping their authority and ought to be ignored.”

In response, we might observe that the popes do not mandate how entrepreneurs should perform research and development, or how to efficiently produce and market the next smartphone. That would be beyond their level of competence. Their teachings regard the basic moral principles that inform relationships between worker and employer, the nature of virtue, and how to foster justice and charity in the workplace. Teaching those things is their job. Nevertheless, judging by the world’s response to Rerum Novarum and the encyclicals that followed, the wish that the popes be ignored seems to have been granted.

There is no doubt that some people are downright angry that the Church believes in a living wage. Whence the anger?

In his discussion of justice and wages in Laborem Exercens, Pope Saint John Paul II promotes the paying of a “family wage,” which he defines as “a single salary given to the head of the family for his work, sufficient for the needs of the family without the other spouse having to take up gainful employment outside the home.”

Perhaps many people think such a principle is wrong because it seems to violate the free market vision of Adam Smith, whose 1776 book The Wealth of Nations, proved not only insightful, but pivotal to the world insofar as he provided a blueprint for capitalism. Is it possible we could ever find agreement between capitalism and living wage?

Maybe there’s an answer that’s addressed in this quote:

A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more, otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation.

Again with the family wage!?! Which pope said this? Well, it turns out, it wasn’t a pope at all. These are the words of Adam Smith, the greatest free market visionary in economic history. As it turns out, Smith was not only an early proponent of the family wage, but he argued that the family wage would lead the free market nations of the world to wealth. Part of the greatness of what Pope Saint John Paul II called a “market economy” lies in the fact that it broadly allows and affords the ability to pay living wages—and, for that matter, wages well above mere subsistence. It seems that Smith would agree.

Regarding AOC, it is not in her desire to see a living wage come about, but in her notion of how to achieve it, that she gets it galactically wrong. As the magisterium has expressed, socialism is inherently incapable of providing man a living wage, in large part because it denies the prior and fundamental right to private property. A market economy, however, stands in polar contrast to socialism, but it does not relieve any employer the responsibility to provide living wages to his employees, and (this is very important) as his business allows. No one has a responsibility to pay wages he cannot afford and thus sink his business, putting perhaps many out of work.

Most clearly and emphatically expressed in St. John Paul II’s Centesimus Annus, the Church sees no contradiction between a market economy and the rights and duties of the living wage—only mutual support.

Bishop Gustavo Zanchetta.

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