Bainbridge on Minimum Wage
Eduardo Moisés Peñalver January 9, 2007 - 2:04pm
Over at his blog, Stephen Bainbridge has an interesting discussion going on Catholic views on the minimum wage. I have a nit to pick, though, with the nit Stephen is picking withthe Nit Picker about the relationship between the minimum wage and Catholic teachings on just wages (you'll have to go to his site to understand this sentence).
Prof. Bainbridge takes issue with the minimum wage on the followingground: "By setting a floor below which employersmay not go,the minimum wage fails the just wage condition of individualdetermination." It's true that the Catechism says that in determiningwhat is a "fair" or "just" wage, there must be an individualdetermination, and I think it is plausible that, as Prof. Bainbridge obsreves, acollege student working for beer money might be entitled to less of awage than a father of two working to put food on the table. But thatdoes not mean, that, as he puts it, "the minimum wage fails the justwage condition of individual determination."
This might only be true if you thought that (1) the floor and theceiling of the just wage calculation could be determined with precisionsuch that paying someone any more than their just minimum would be aninjustice to the employer AND (2), assuming the first to be true, thestate intended to do an injustice in the case of the overpaid collegestudent rather than accepted the overpayment as an unintendedside-effect of its efforts to ensure the just compensation of thefather of two. Law can never perfectly track the demands of justice,but that does not mean that we can't have any laws. In other words, Ithink Prof. Bainbridge is conflating the need for a case by case determinationof the JUSTICE of a particular wage with the state's legitimate need tooperate on the basis of generalities when constructing prospectivelegislation that it intends to operate to eliminate injustice in thewage market.
We can all think of exmaples of situations in which the minimum wagemight indirectly contribute to injustice (in both directions, sincethere will also be cases where someone's needs are GREATER than what arealistically state-imposed minimum wage could provide without, say,damaging the labor market and leading to a great deal ofunemployment). But, confronted by the even graver injustice of thelaissez faire labor market, the state is permitted to do the best thatit can in combatting wage injustice, even to the point of formulating acompromise, best-guess minimum wage that overpays a few and underpays afew others but does justice in the vast majority of cases. Clearly,the state cannot do it all through the minimum wage. The minimum wageis, after all, just one tool in the quiver, and, for that matter, thestate cannot be expected to perfectly guarantee economic justice. Thestate will, however, have other ways to make provision for those whoare underpaid, minimum wages notwithstanding. But the minimum wage iscertainly one of the state's key tools, and I do think it's incorrectfor Prof. Bainbridge to suggest that its generality somehow runs afoul of theCatechism's teaching on just wages. (I understand that Prof. Bainbridge bracketsthe question of whether CST calls for a minimum wage and is moreinterested in taking apart the Nit Picker's argument, but he does so byarguing that a minimum wage law violates the Catechism's teaching onjust wages, and so he seems to be answering the question he brackets orat least pointing to an apparent inconsistency within CST. I, on theother hand, see no inconsistency; not even a tension.)
I do agree with Prof. Bainbridge's complaint that the Catechism passage citedby the Nit Picker does not do the work the NitPicker says it does: that is, it does not, by itself, rule out Catholic opposition to theminimum wage based on, say, the good faith belief that the minimum wage will not actually help to guarantee more workers receive a just wage (due either to, for example, circumvention of the law by employers or to increased unemployment resulting from the imposition of the minimum wage). But I think some of that work is done by the many, manymagisterial statements over the years on history's lessons about the apparent insufficiency of theunregulated market and the responsibility of the state towork for economic justice in light of that insufficiency. Here, for example, is what the Pius XI said about unregulated markets in Quadragesimo Anno:
"[T]he right ordering of economic life cannot be left to a free competition of forces. For from this source, as from a poisoned spring, have originated and spread all the errors of individualist economic teaching."
"But free competition, while justified and certainly useful provided it is kept within certain limits, clearly cannot direct economic life - a truth which the outcome of the application in practice of the tenets of this evil individualistic spirit has more than sufficiently demonstrated. Therefore, it is most necessary that economic life be again subjected to and governed by a true and effective directing principle."
"Free competition, kept within definite and due limits, and still more economic dictatorship, must be effectively brought under public authority in these matters which pertain to the latter's function. The public institutions themselves, of peoples, moreover, ought to make all human society conform to the needs of the common good; that is, to the norm of social justice."
More specific to the minimum wage in the U.S. context, the US Bishops in Economic Justice for All said that:
Because work is this important, people have a rightto employment. In return for their labor, workers have a right to wagesand other benefits sufficient to sustain life in dignity. As Pope LeoXIII stated, every working person has "the right of securing things tosustain life" . The way power is distributed in a free marketeconomy frequently gives employers greater bargaining power thanemployees in the negotiation of labor contracts. Such unequal power maypress workers into a choice between an inadequate wage or no wage atall. But justice, not charity, demands certain minimum wage guarantees.The provision of wages and other benefits sufficient to support afamily in dignity is a basic necessity to prevent this exploitation ofworkers. The dignity of workers also requires adequate health care,security for old age or disability, unemployment compensation,healthful working conditions, weekly rest, periodic holidays forrecreation and leisure, and reasonable security against arbitrarydismissal . These provisions are all essential if workers are to betreated as persons rather than simply a "factor of production." . . .
In recent years the minimum wage has not beenadjusted to keep pace with inflation. Its real value has declined by 24percent since 1981. We believe Congress should raise the minimum wagein order to restore some of the purchasing power it has lost due toinflation.
About the Author
Eduardo Moisés Peñalver is the John P. Wilson Professor of Law at the University of Chicago Law School. He is the author of numerous books and articles on the subjects of property and land use law.