Maximize the Minimum Wage
Last month, Congress rejected a proposal to raise the minimum wage of millions of working Americans.
In a 49-46 vote, Congress threw out a bill to raise the minimum wage from $5.15 an hour to $7.25 an hour. With the price of everything going up, many Americans don’t understand why the bill died in Congress. Opponents of the bill argued that an increase in minimum wage would hurt businesses and workers. Sen. John Sununu, R-N.H., put it this way: “When you raise the minimum wage, you price workers out of the market.”
Not necessarily, say experts at the Economic Policy Institute. They point out there is no evidence of any systematic or significant job loss from the last minimum wage increase in 1996-97. Moreover, the Fiscal Policy Institute conducted a recent study on state minimum wages that found no evidence of negative employment effects on small businesses. Supporters of the minimum-wage increase say they will reintroduce another bill to help working Americans.
Who’s right in this debate?
I think the social doctrine of the Church offers key moral and ethical principles to help us answer this question correctly.
First, Catholic social doctrine infers from sacred Scripture that employers should pay their employees a just wage. For example, the book of Leviticus says, “Do not defraud your neighbor or rob him. Do not hold back the wages of a hired man overnight” (19:13). The book of Deuteronomy says something similar: “Do not take advantage of a hired man who is poor and needy, whether he is a brother Israelite or an alien living in one of your towns” (24:14).
The New Testament takes up the theme of the just wage also in the book of St. James (5:4): “Look! The wages you failed to pay the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty.”
It’s clear that sacred Scripture frowns on an employer that swindles his employee out of a just wage. The magisterium of the Church confirms the teaching of Scripture on this point in the Catechism of the Catholic Church. It says, “A just wage is the legitimate fruit of work. To refuse or withhold it can be a grave injustice” (No. 2434).
Many politicians and employers dismiss the very idea of a just wage as theological idealism. They think the notion of a just wage is totally subjective. For them, there appears to be no objective, practical, verifiable, and ethical way to establish a just wage. But there is.
In 1891, Pope Leo XIII set an objective and ethical standard for a just wage in his famous encyclical letter Rerum Novarum (On the Condition of Labor). He said a just wage “must not be below the level of subsistence” of the worker. The level of subsistence means the cost of living.
The cost of living refers to the average cost of the basic necessities of life, such as food, shelter, clothes and medical expenses. Consequently, if you don’t make enough money to cover the basic necessities of life then your wage is unjust.
The Second Vatican Council reaffirmed the teaching of Leo XIII by stating: “One’s pay should provide a dignified livelihood for himself and his family materially, socially, culturally, and spiritually.”
Having said this, we can now discern whether Congress did the right thing by refusing to raise minimum wage.
One way to determine this is to ask ourselves the following: Can a worker support himself and a family on the current federal minimum wage of $5.15 an hour?
Let’s see: A full time worker, working 2,080 hours a year, earning $5.15 an hour would earn $10,712 a year. That’s well below the federal poverty line of $14,824 for a family of three. Here, we need to take into account a couple of factors of real life that complicate these figures.
First, not all workers can find full-time work. And second, others, like single mothers, cannot balance full-time work with family responsibilities.
Also, we need to consider the reality of inflation. Minimum wage isn’t indexed to inflation. Subsequently, minimum wage can’t keep pace with the cost of living. In fact, the $5.15 minimum wage is the equivalent of only $4.23 minimum wage of 1995. Minimum wage increases depend primarily on the good will and largesse of Congress.
After looking at these facts, I think we can fairly conclude that the minimum wage falls well below the level of subsistence. For this reason, it fails the objective moral standard of a just wage. This means Congress got it wrong on the minimum-wage debate.
In response to this, many will echo the familiar refrain that the federal government has no business setting a minimum wage in the first place.
But it does.
Government should promote and protect the natural rights of citizens as an integral part of the common good of society. People have a natural right to a just wage because they are human beings. No one should have to choose between eating and buying medicine because they don’t earn enough money to live on. Yet it happens.
Justice for all in American demands that we value people more that monetary profit.
Father Andrew McNair is a theology professor
at Mater Ecclesiae College in Greenville, R.I.
- April 24-30, 2005