Minimum wage and justice: A complicated relationship

| Bridget Ryder | August 9, 2017 | 1 Comment

Dave Barnier, left, prepares food with Elmer Calle, lead breakfast cook at Dave’s Downtown restaurant in downtown Minneapolis July 31. Barnier, of Our Lady of Lourdes in Minneapolis, tries to treat his workers well by paying more than minimum wage, with all but two of his 16 workers earning at least $15 an hour. He also pays for their parking and offers paid time off and holiday pay. Dave Hrbacek/The Catholic Spirit

Carmela Palacios, 38, has been making hamburgers at Burger King for 16 years. She likes her job. She likes to work.

“Wherever there’s work, I’ll work,” said Palacios, a parishioner of Holy Rosary in Minneapolis, a wife and mother of two.

After years of working, participating in six strikes and leading labor advocacy with Centro de Trabajadores Unidos en Lucha, which has received local funding from the U.S. bishops’ Catholic Campaign for Human Development, she is just now seeing that her full-time position may pay off in terms of a meaningful salary. That’s thanks to the Minneapolis City Council’s June decision to create a municipal minimum wage of $15 an hour, although the implementation will take place incrementally over five to seven years.

The Church’s continual advocacy for a just wage, which has included support for a minimum wage, has had people like Palacios in mind.

“A just wage in the industrialized West was formulated precisely to fit factory workers, men [and women] who went to the factory and did the same thing for 50 years,” said William Junker, assistant professor of Catholic Studies and co-director of the Terrence J. Murphy Institute for Catholic Thought, Law and Public Policy at the University of St. Thomas.

Tim Marx, president and CEO of Catholic Charities, explains the reasoning. Work gives a person the means to sustain a decent life, and as someone made in the image of God, each person who works should receive the means to live in accordance with that dignity. Since modern workers sustain themselves by wages received from employers, just sustenance means a just wage.

“Everyone who works a full-time job for a number of years should earn a living wage,” said Robert Kennedy, professor of Catholic Studies who has long worked in the area of business ethics. “We absolutely insist that people need a fair share of the resources of the earth to a live a minimally decent life.”

The issue is at the heart of Christianity, starting with admonitions in the Old Testament not to withhold the wages of workers and extending to the parables of Jesus allegorizing the worker’s worth. The Church has continued to bring this tradition to bear on the changing circumstances of every generation. The implementation, however, has been complicated.

Modern circumstances

Just wages were one of the concerns Pope Leo XIII had in mind when he wrote “Rerum Novarum,” published in 1891 and considered the first of the Church’s great social encyclicals.

“Within the context of global industrial and post-industrial capitalism, the notion of a worker’s right to income and quality of life in relation to the overall wealth of the economy does start with ‘Rerum Novarum,’” Junker said.

By the time Pope Leo XIII published the encyclical, known in English as “On the Conditions of Labor,” the industrial revolution had turned farmers and cottage industry craftsmen into low-skill, wage slaves who performed repetitive tasks for long hours in factories. The pope hoped that “the fruits of production will accrue equitably to those who are rich and will be distributed in ample sufficiency among the workers.”

One sign of the ample distribution, he said, would be a wage that allowed a worker to provide for his family in “frugal comfort,” put aside savings and have some time for leisure. Forty years later in “On the Reconstruction of Social Order,” Pope Pius XI outlined a list of interconnected considerations for a just wage, including the responsibility of owners to run their businesses well, the financial standing of a business, the contribution of each person and the common good of society at large. The compensation of workers could not be decided solely by “the laws of the marketplace, nor … the will of the more powerful,” he wrote.

Pope Pius XI’s teachings coincided with the start of the minimum wage movement in the United States. Minnesota became one of the first states to establish a minimum wage in 1913, due in large part to the work of Msgr. John Ryan, a priest of the archdiocese and a prominent national figure in Catholic social thought. The federal minimum wage was later established in 1931.

Today the federal minimum wage is $7.25 an hour. In Minnesota, the minimum wage is $9.50 an hour. The highest minimum wages are $11 an hour in Massachusetts and Washington state, but Washington is on track to be at $13.50 an hour by 2020.

Debate about a minimum wage’s effectiveness in realizing a just wage is a part of the ongoing legacy of this piece of public policy. Catholics shouldn’t be afraid to jump into the fray, experts say.

“This,” Marx said, “is the beauty of the Catholic social thought: It’s not Republican or Democrat, it’s pragmatic — are people better off?”

The practical side

There have been competing studies for years on whether raising the minimum wage is actually beneficial. Some studies claim that a mandated raise in the minimum wage results in an overall reduction of work opportunity and, ultimately, salary for low-skill workers. This follows from the logic of market economics — if something costs more, people purchase less of it. When regulation forces the cost of labor up, businesses will hire fewer workers or replace them with technology. Other studies suggest that the market logic simply doesn’t play out at this level, and raising the minimum wage has been overall beneficial.

Marx is a little skeptical of city government jumping into wage policy. He also questions whether the Minneapolis ordinance violates the Catholic principal of subsidiarity, the idea that decisions should be made at the lowest competent level.

“Particularly in today’s economy, there’s no Minneapolis economy. At best there’s a regional economy,” he said.

Kennedy called the law “a blunt instrument” unsuited for the “porousness” of a system that allows businesses to relocate to less restrictive jurisdictions, the actual capacity of small businesses competing with corporate giants to be able to pay the required wage, and the diversity of workers looking for employment, such as teenagers or others seeking part-time employment. These concerns also came out in the listening sessions the city held before passing the ordinance.

Beyond the minimum wage

According to the Minnesota Department of Employment and Economic Development, a living hourly wage for a family of three children and two adults, with one adult working, is $31.34.

Even successful, well-intentioned business owners can find it hard to provide a living wage that truly allows family life to flourish. At Dave’s Downtown, a fast-casual restaurant in the downtown Minneapolis skyway, owner Dave Barnier, 61, a parishioner of Our Lady of Lourdes and a father of nine, is already paying all but two of his 16 employees at least $15 an hour. He also pays for their parking and offers paid time off, holiday pay and other bonuses.

He admits he can pay so well because his restaurant is busy, but he’s also found it’s good business to cross-train his workers and treat them well. His customers expect restaurant workers to be able to take a vacation, too, and don’t mind paying a little more to make that happen, he said.

Still, half of his employees — who are all over 21 and half of whom are married — work two jobs. Barnier said he would also like to offer health insurance, but hasn’t found a plan worth offering that he can afford.

The question of establishing a just work system has to go deeper than wage, experts said.

Marx looks to other factors that influence a person’s ability to live a decent life, such as education opportunities, affordable housing and other kinds of subsidies.

“We live in a complicated economic system. No one gets there on their own. We’re all subsidized,” he said, pointing to the example of tax deductions for homeowners with mortgages.

Junker highlighted the need to confront the power of large corporations to “negotiate all kinds of things advantageous to themselves” and the difficulty of small businesses to compete with them. With both collective purchasing power and public policies, communities can find ways to allow local business and local labor to thrive, he said. Economics always has a political aspect, he added.

Kennedy said public policy cannot be the only means to bring about justice. The individual effort of consumers and employers is necessary to correct flaws in the present system.

“We have prioritized capital and efficiency so that it is almost guaranteed that a portion of the population will not be able to find suitable work,” he said. “We have made work a means to an end. We tend to treat people like machines.”

Instead, cultural, Church and business leaders should encourage a “culture of employment” that prioritizes providing good jobs over economic efficiency, he said. To make this work, employers could design more jobs that will also be worth a living wage from a business perspective.

The Church should also encourage charitable giving and volunteering as ways to create economic balance, experts said.

Understood in this context, Minneapolis’ new minimum wage law is just the beginning of another installment in the ongoing conversation about a just wage, a conversation that will hopefully become deeper and broader.

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Category: Faith and Culture