Bare minimum: what constitutes a just wage?

In a final flurry of pre-holiday maneuvering, the last session of Congress failed to raise the federal minimum wage from its current rate of $5.15 an hour, at which it has languished for the past eight years. Recent efforts to raise the minimum wage have made strange political bedfellows, with the likes of Senators Ted Kennedy (D-Mass.) and Rick Santorum (R-Penn.)--otherwise on opposite ends of the spectrum--both championing the need to raise wages. Advocates argue that the last decade of inflation has made the current minimum wage less valuable than at any time since 1955. For those of us who are not economists but are concerned about the increasing disparities between haves and have-nots, it's helpful to consider secular arguments on the minimum wage in light of Catholic social teaching.

During the past five years, Republican business interests have continued to prevail. According to their logic, the minimum wage is exactly what that is sounds like--an entry-level figure, attractive to teenagers, part-timers, or first-time job seekers gaining a foothold on the lowest rung of the pay ladder. Moreover, the thinking goes, if the minimum wage is raised, jobs will be lost because small-business owners will be required to reduce the number of employees to accommodate higher labor costs.

This is faulty thinking. First, if the federal wage floor is raised, labor costs for all employers will remain a uniform feature of doing business. Much recent research, especially analyses by David Card and Alan Krueger of Princeton, indicates that an across-the-board rate increase will not leave any particular owner at a competitive disadvantage, precisely because a regulated market helps keep the playing field level for everyone. Second, the claim that raising the minimum wage would lead to significant job losses is dubious. Suppose the minimum wage were lowered to, say, half its current level. Would a proportional increase in jobs immediately follow? Would lower labor costs lead to proportional reductions across the whole economy? Unlikely.

What has the church had to say about all this? Papal encyclicals since Leo XIII have spoken prophetically about the inadequacies of bottom-line thinking to meeting the moral requirements of individual and family dignity in capitalist economies. Since Aquinas, Catholic thought has emphasized the inseparable connections between property holding and the requirements of the common good. In the U.S. context, the landmark writings of Msgr. John A. Ryan on the right to a living wage adapted the tradition's emphasis on common property to the circumstances of modern market economies. Ryan insisted that distributive justice is the necessary corrective to capitalism's focus on generating, rather than distributing, wealth. One seldom hears justice language from those who decry raising the minimum wage.

But wait, such critics might protest. Don't confuse our arguments about the minimum wage with Catholic musings about a living wage. The two are not the same. We are talking about the overall economy and the creation of jobs, not about the material needs of any particular person or family.

Really? Is that the argument? That everyone has to start somewhere, even at a wage rate that, in many places, would force workers to choose between basic shelter and one decent meal a day? What about those full-time workers--not teenagers or part-timers--who, for lack of skill, opportunity, or aptitude, are destined to stay on the lowest rung of the economic ladder? These people aren't the product of an overactive liberal imagination. Barbara Ehrenreich's powerful Nickel and Dimed (Henry Holt and Company) details the difficulties of the have-nots in today's economy, and the sad tradeoffs required by the working poor in meeting their subsistence needs.

In the absence of federal action, campaigns to raise the minimum wage--many of them successful--have been conducted at local and state levels, as documented by Jon Gertner in the New York Times Magazine ("What Is a Living Wage?" January 15). Yet for all the grass-roots successes, efforts to raise the minimum wage still deserve federal action. If raising the minimum wage is not an important step toward improving the plight of the working poor, what other remedies do critics suggest? After all, the same Congress that begrudges a raise in the minimum wage for workers at the bottom readily finds reasons for continuing the gravy train of tax cuts for the most well-off, even as it slashes billions of dollars in spending for Medicaid. The same Congress that keeps a lid on the minimum wage seems unable or unwilling to reconsider the need for a system of national health care, which would dramatically improve the access of the working poor to timely medical services. The same Congress that preaches trickle-down charity rather than social justice seems intent on doing all it can to ensure that the working poor will stay that way, without the means, on their own or from the rest of us, to achieve the minimum security that Catholic social teaching holds is justly theirs.