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The following article originally appeared in Salt of the Earth. It is posted here for private use only. It may not be reprinted in whole or in part without the permission of Salt of the Earth magazine.


Make minimum wage a just wage

Christopher Ringwald

"A JUST WAGE," THE CATECHISM of the Catholic Church tells us, "is the legitimate fruit of labor." That's nice to yack about in a seminar room or retreat house. But paying a just wage and still staying in business is a more difficult matter when you're the boss—as I was for years as a building contractor. I wasn't long in the business before it became painfully clear that the more I paid Alan and Bill and Juan, the less there was for me and my partner.

All the same, my partner and I chose to pay several dollars above the going rate for laborers and carpenters. We also provided health insurance, and we were not, I think, tyrants. Yes, we wanted to be decent, but there's no denying that there was self-interest involved in all of these decisions. We wanted our guys to work hard, to keep coming to work, and to be conscientious in our customers' homes. And guess what? We stayed in business and made good money, better than we would have done with a handful of miserable employees.

But a different formula is at work at many other workplaces.

More than 4.2 million Americans, two thirds of them adults over 25 and most of them women, are earning something clearly other than the "legitimate fruit" of their labor. They're earning the government-set minimum wage of $4.25 an hour—$8,840 a year. Adjusted for inflation, that's the lowest legal minimum in 40 years.

WHY HAS IT REACHED THAT 40-YEAR LOW? Mainly because businesses have persuaded policymakers in Washington that hiking the legal minimum would hurt the economy.

Labor Secretary Robert Reich came into office with guns blazing but ultimately delayed action on two items of most importance to working people: raising the minimum wage and pressing the Senate to pass a law banning companies from replacing employees who are on strike. The latter is a dead issue. Recently, however, President Clinton revived the issue of a minimum-wage hike, proposing to raise it by 90 cents over two years.

Opponents argue that a higher minimum distorts the free market, crippling firms that compete against manufacturers overseas, and forces companies to lay off some workers in order to pay others more. But the research goes both ways. A 1992 study found almost no effect on employment following a minimum-wage hike.

In January, Reich told Congress, "Business profits have been very good while wages for the most part are stuck in the mud. This is not fulfilling the American dream.''

Common sense suggests higher wages help the economy. A higher minimum wage makes work more attractive to people on welfare who otherwise would not find it worthwhile. And better paychecks give people more money to spend on cars, camcorders, and coats—creating more work.

MEANWHILE SOME ECONOMISTS AND BUSINESS leaders call for abolishing the minimum wage altogether, saying that the free market is the best guarantee of jobs and prosperity. That may sound reasonable, but the government already intervenes in the free market with all sorts of tax credits and deductions, loans, grants, and subsidies to companies large and small. Each of these interventions is intended to address some problem that the free market has not been able to resolve on its own, such as encouraging investment in inner cities or unstable foreign countries.

But that, of course, is not the only reason the minimum has to be raised. As Christians, frankly, we are subject to a law higher than that of the free market.

FROM VATICAN II'S GAUDIUM ET SPES: "Remuneration for work should guarantee man the opportunity to provide a dignified livelihood for himself and his family on the material, social, cultural, and spiritual level, taking into account the role and productivity of each, the state of the business, and the common good."

Economists may disagree, but we, as Catholics, are called to pay that injunction more attention.

Can we really feel comfortable with the fact that so many minimum-wage workers are earning less than the poverty line—$14,763 a year for a family of four?

MOST AMERICANS, 73 PERCENT ACCORDING to a recent survey, already agree that the minimum wage of $4.25 is too low. Another report indicates that most people think the poverty line should be about $17,800 for a family of four. To reach that income on one salary, the minimum wage would have to be doubled to $8.50 an hour.

Given the current political environment, that seems unlikely. But in a typical American household, one parent works full time and the other part time. For families to essentially escape poverty then, the minimum wage would only have to be raised to $6 an hour. Certainly we can afford that.

Indeed, the catechism holds us to a higher standard: "Agreement between the parties is not sufficient to justify morally the amount to be received in wages." That means, just because someone agrees to wash floors for $4.25, it's not necessarily right or moral. Even though we're not all bosses, we can pressure companies to do better—regardless of the legal minimum—through the investments we make in mutual funds, pension funds, and IRAs.

IMAY NOT HAVE THE EXPERTISE OF THE ECONOMISTS who sternly lecture politicians about the damage of minimum wages and other government market intrusions. But I can speak from some personal experience about setting prices and wages.

As a building contractor, my job estimates were based on a mix of my costs for materials and time, what other contractors were charging, what seemed fair and—to be frank—what I could get away with. But squeezing my workers in order to make more money made little sense. After all, I wanted them to work hard and stay healthy and to come back tomorrow.

The Catholic Church teaches that social problems should be dealt with on the smallest, most local level possible. The macroeconomy is made up of thousands of little decisions like the ones I made. One decision we should all make is to pay people enough to live on.—END

©1999 by Claretian Publications


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