Tuesday, October 10, 2006

Government-mandated minimum wage: pro and con

Here in Ohio, we have initiative and referenda (there's a distinction between them that has been explained to me, but I have forgotten what it is). I wish we didn't.

On the ballot this November is an amendment to the state constitution hiking the legal "minimum wage" and calling for annual increases every year. The Archbishop of Cincinnati, my diocese, has endorsed it.

I oppose this sort of thing as -- to speak theologically -- an imprudent way to bring about a "just wage" that has many harmful effects, and therefore, in my judgment, ill-advised.

Now, as to my own opinion, I am happy to share it; the Archbishop gave his, and I respect him; but I know he doesn't mind that I have my own, and share it.

Here's what I said recently in a Sunday homily (posted two weeks ago here):

As we have that election in mind,
the Apostle James, in the second reading,
gives us some things to think about.

In his time, rich and poor
were much more fixed categories.
So he was saying to the rich—
you have to help the poor,
because if you won’t, who will?

That’s still true, but in a different way, today.
Today, the question is,
how do we provide opportunities
for people to escape poverty,
as well as helping those in poverty.

Some say, “pass a law raising the minimum wage.”
Others say, “that’s the wrong way to do it—
better is to create more jobs.”
We will disagree on the method;
But St. James warns us, woe to us if we
think it’s not our problem!

Woe to us if we think
the fate of the weakest members
of our human family aren’t our problem:
St. James says, you live in luxury and pleasure,
while the innocent are murdered.

Is there anything more to be said?

44 comments:

Anonymous said...

Maybe we could create more "opportunites" (e.g., jobs) by eliminating the minimum wage law altogether. (I mean, come on! Who really needs $200 a week to live on anyway?) And while we are at it, we could also eliminate those socialist child labor laws and all those pesky OSHA regulations that just make it more expensive for business owners to do what they do best.

I think you might be onto something here, Father. Just think of all those eight year-olds that we could put to work operating band saws for $2 an hour. Ah, if only big brother government would just get out of the way of free enterprise -- what a world that would be!

Band Saws

Father Martin Fox said...

Anonymous:

If setting a minimum wage is such a good idea, why at $8 and change? Why not $12 or $20?

Advocates for minimum-wage laws never seem to have an explanation for this; but really, you are hoisted on your own petard: if you are right that fixing low wages is simply a matter of legislating them, then you are the stingy ones for not setting them higher.

Oh, and anonymous: next time you post, try it without the smartass.

Mark Anthony said...

To your point, Father, the key is in the term "minimum". I agree that "eight dollars and change" is not enough for a family to live on in any meaningful way - it should be higher. Unfortunately, the "family values" conservatives in the General Assembly refuse to agree to any raise in the amount, so a compromise amount has to be chosen and put forward directly to the public.

Still, it is only meant as a "minimum" Hopefully, most employers will choose to pay their employees a higher wage. I agree with the Archbishop on this one. As a matter of social justice, certainly we as a society composed overwhelmingly of Christians can afford to say, "No one should be able to profit off of others by paying less than this minimal amount."

What do the Scriptures say about the withheld wages of the poor calling out to the Lord?

Seamus (aka anonymous) said...

"Oh, and anonymous: next time you post, try it without the smartass."

I must admit, Father, these words of yours did make me smile. I suppose that I may be a little too Irish-Catholic and a little too Jersey for my own good, but "smartass" is what I do best.

Please recognize that I wasn't shooting for uncharitable with my post above; I took issue with your position on a political question, not with you yourself. In all candor, I like you. And it's precisely because I do like you that I won't give you a pass when you get it wrong on an issue of the day, that Roman collar around your neck notwithstanding. I hope you'll return the favor and take your best shot at my positions. (God knows, I'm used to it. I've probably taken more punches than I've ever thrown.) Besides, a smart guy like yourself can surely recognize reductio ad absurdum for what it is.

Reductio what??

Now with respect to your other comments, please know that I am, as I write these words, very much in the middle of a busy work day. As such, I'll speak to the issues you raised in a post that I will write later this evening. (Hopefully I won't offend your charming, oh-so-polite Midwestern sensibilities in the process.) Thanks for your patience. Until then ...

Layla said...

Hear, hear, Father. As usual, you've nailed it.

Seamus said...

"There is no evidence of job loss from the last minimum wage increase."

Minimum Wage Issue: Facts At A Glance

Seamus said...

"What do the Scriptures say about the withheld wages of the poor calling out to the Lord?"

Well, James 5:4 says the following:

"Behold, the wages you withheld from the workers who harvested your fields are crying aloud, and the cries of the harvesters have reached the ears of the Lord of hosts."

James, Chapter 5

The Catechism of the Catholic Church(CCC) says, among other things, the following:

"A just wage is the legitimate fruit of work. To refuse or withhold it can be a grave injustice. In determining fair pay both the needs and the contributions of each person must be taken into account. '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 the productivity of each, the state of the business, and the common good.' Agreement between the parties is not sufficient to justify morally the amount to be received in wages." --- CCC, # 2434

CCC, # 2426 and onward

Father Martin Fox said...

I note thus far, no one has responded to my question: if $8-and-change is good, why isn't $12 or $20 better?

Mark might be taken as implying they are better; but he didn't actually say that, so I don't wish to put words in his mouth.

Seamus: where in all you quoted does either Scripture or the Catechism insist that one must enact minimum wage laws? I didn't see it there.

I didn't respond to the rest of you post because I didn't see anything actually absurd.

For example: suppose for the sake of argument, all child labor laws disappeared overnight; how many 8 year olds do you think would be working band-saws in a year's time; in five? Could you think of any reason -- other than the sanction of law -- that that wouldn't happen. I can think of plenty.

So the idea that unfettered Free Enterprise is going to lead to that is not to be taken seriously.

Now; if it's sound policy to legislate wages, why not prices? After all, a wage is a price -- a price of a unit of work. It makes as much sense to say, legislate wages up, as to say, legislate prices down.

How's that working, do you know?

Father Martin Fox said...

Seamus:

I did note your response suggests you haven't ignored my question; I didn't mean to imply otherwise . . .

Victor said...

I'm not impressed by the "studies" Seamus links to claiming no job losses. I could pick them apart one at a time on points like the epistemic limits of social science, including the nature of counter-factuality, and how some of the very conclusions implicitly acknowledge the point, etc.

But suffice to note that the point Padre makes about $12 or $20 is simply unassailable. If there were in-principle no job-loss effects from raising the minimum wage, there is no reason not to raise it to $20, $30 or any other figure.

Now this doesn't mean it shouldn't be raised at any given time or that the losses in economic efficiency that minimum-wage laws produce (along with other forms of economic regulation in the name of non-market goods) aren't worth it. I do think it's a good idea to have some mechanism to periodically adjust the minimum-wage for inflation, outside the political process. But to say there are no job losses is not to take seriously the most basic economic facts that even a child knows upon reflection (namely that raising the cost of a thing discourages its purchase).

Victor said...

if it's sound policy to legislate wages, why not prices? After all, a wage is a price -- a price of a unit of work. It makes as much sense to say, legislate wages up, as to say, legislate prices down.

Economically-speaking, that is true.

But the difference between a price for labor and a price for an apple is that "labor" is not a pure commodity. It's a person with objective needs and value that a mere commodity does not have.

Victor said...

In other words, there is a "justice" consideration in dealing with the "commodity" of labor that doesn't enter into the question when dealing with the "commodity" of an apple.

Seamus said...

"If setting a minimum wage is such a good idea, why at $8 and change?"

It is my understanding, Father, that Issue 2, if passed, would raise the minimum wage in Ohio from $5.15 an hour to $6.85 an hour as of January 1. The wage would then be adjusted each year for inflation. The current minimum wage hasn't been raised in 10 years. I'm not at all sure what your "$8 and change" remark refers to.

Ohio's Minimum Wage: What's At Stake At The Polls

"Why not $12 or $20? Advocates for minimum-wage laws never seem to have an explanation for this..."

Well, allow me to be the first to disabuse you, Father.

Why not $20 an hour? Because a mandated $20 minimum wage would have a deleterious effect on the economy (e.g., inflation, job losses, stagnant growth, etc.). However, raising the minimum wage to $6.85 an hour -- a very modest increase, to be sure -- would aid millions of Ohioans in poverty while at the same time avoiding those negative economic effects. Indeed, there is compelling evidence to suggest that raising the minimum wage beyond the current $5.15 an hour to the proposed $6.85 an hour would actually aid small businesses and create more retail jobs.

States With Minimum Wages Above The Federal Level ($5.15) Have Had Faster Small Business & Retail Job Growth.

In short, and in seeking to strike the proper balance, Issue 2 is a "win-win" proposition. The working poor get some much-needed relief for the first time in a decade, and business stands to benefit as well. (Who do you think is shopping at Walmart anyway?) Your $12 and $20 an hour proposals are not win-win.

Room To Grow: Ohio Can Afford A Higher Minimum Wage

Being Good To Workers Is Also Good For The Bottom Line

New Mexico Study: Minimum Wage Increase (to $8.50 an hour) Hasn't Hurt Job-Growth

Incidentally, the current $5.15 minimum wage has less purchasing power today than at at any time in the last 50 years. If the 1968 minimum wage was properly adjusted for inflation, the minimum wage would now be just over $9.00 an hour.

Raise The Wage: Ohioans For A Fair Minimum Wage

Sadly, this is also happening at the same time that childhood poverty rates are rising.

Child Poverty in Ohio

..."but really, you are hoisted on your own petard: if you are right that fixing low wages is simply a matter of legislating them, then you are the stingy ones for not setting them higher."

I'm no fan of gymnastics, Father, but I'll give you a 5.9 (out of a 6) for that last sentence. It certainly took some fancy twists to arrive at a conclusion which holds that those who advocate raising the minimum wage somewhat are "stingy," whereas those who oppose any increase -- or even a minimum wage law at all! -- somehow have the best interests of the working poor at heart.

As pointed out above, raising the minimum wage has everything to do with striking the proper balance -- namely, how far can the government raise the wage without suffering the deleterious economic effects that mandated higher wages sometimes -- not always! -- bring. Ohio can afford $6.85. Moreover, the overall economy stands to benefit if the minimum wage is raised to that particular level. Far from being "stingy," Issue 2 is a good, sound proposal.

Father Martin Fox said...

"But to say there are no job losses is not to take seriously the most basic economic facts that even a child knows upon reflection (namely that raising the cost of a thing discourages its purchase)."

Victor, you are just so heartless and mean!

I see you can't wait until Coca Cola has infants working in its bottling plants...

More seriously, while one might agree with the moral impulse behind a minimum wage law, the matter breaks down, I think, in application:

* Is it really immoral if some people make less than the minimum? If a homeless person strolls by the rectory, and says, can you help me? I say, well, would you be willing to do some chores for the help I give you? Whoops -- now I've hired someone, and don't I have to comply with all relevant labor laws? Or, I pay him cash, ignoring the laws. If I give him $10 and he does more than 2 hours work, I've failed to pay minimum wage.

"Well, that doesn't count." OK, agreed. But then we have to decide just what does -- and doesn't -- count. What about kids? What's the age? What about ex-cons? What about interns? What about political activists, working for a group campaigning for higher minimum wages? Etc.

Part of why many of us object to these things is because the drawing of these lines isn't driven by the right considerations. And at the margins, honest people either don't hire someone, or they do so knowingly breaking the law.

Further, if you have a strong, growing economy, with low unemployment, how much need is there for such laws. I think back to the good old days of the Clinton boom, when unemployment got very close to 4% nationally, meaning it was well below it in many areas. Employers couldn't fill jobs. They did the most logical thing: they offered more money, relocation bonuses, free housing, etc.

It takes a particularly warped view of business to insist, "no, they will still keep wages sinfully low even though it will bankrupt them!"

Here in Ohio, we have a higher rate of unemployment than the rest of the country, and we aren't experiencing much business expansion. It's no mystery what forces are at work there; and it's very hard to see how hiking the minimum wage is going to do much to help.

Seamus said...

Father, it is now just after midnight here in New Jersey. It's been a long day and the 6:25 AM Mass at St. James in Red Bank rolls around pretty quickly. I'm going to bed. I'll most likely address your last post sometime tomorrow.

Good night.

Father Martin Fox said...

Seamus:

I must have misread the info on Issue 2, I thought the new level would be $8-something. My mistake.

But your blizzard of citations, however impressive on one level, in the end isn't impressive at all. The gist of your argument is that the hike you advocate is too small to have negative economic effects. Which means it doesn't cost very much. Which means it doesn't put very much into anyone's pocket.

You can't have it both ways: you can't say, to the payer, "this'll be nothing to you" and say to the payee, "whoee, this'll be a big step up for you!"

Question: given that the federal mimimum wage has stayed so low all this time, what number of workers has been at the minimum wage all this time? And how has that number changed, if at all, over the years.

My understanding is that a small number of workers (and those mostly students, not breadwinners) subject to this minimum are at minimum -- i.e., they're above it.

What raised their wages?

Victor said...

Padre:

David Morrison took to calling me Boss Tweed. Indeed, if you Google the terms "David Morrison" and "Boss Tweed," you'll see it's become a running joke between the two of us.

Victor said...

More seriously yourself, Father:

(1) I would have no objection in principle to having different minimum wages, including a lower one for minors, dependents and second-earners, a higher one for heads of households, and even have it slide up in such cases with family size. Particularly since a $5/hr wage for teens would permit a $7/hr wage for household heads, while having the same net economic effect as $6/hr for everyone (I'm just making up those numbers for illustration's sake, but the principle is clear). I think that's ultimately what the Church's Social Teaching would call for. I am also realistic that this is a complete nonstarter given our fetish for age, sex and marital-status discrimination laws ... but nevertheless.

(2) I would certainly never say that it's immoral per se to pay someone less than (amount-X), even more so since the present-day American numbers we toss around are pretty ridiculous by world-historical standards. "Poverty" is a construction based on a bourgeois society's expectations. In the "Mother Teresa in Calcutta"-sense of "poverty," poverty doesn't exist in the US.

(3) You are correct that the drawing of these lines is usually not based on right considerations. "Getting Democrats to the polls" or "giving Democrat lawmakers an election-year issue" is usually the dominant one.) The economic climate in the Ohio of 2006, or any other given time or place, might not be ripe. And overall macroeconomic factors ultimately matter far more.

See how far I'm bending over backwards, before saying apropos of each point ...

Nevertheless, a minimum-wage law still serves as a (crude and imperfect, but not worthless) way of implementing the teaching on Just Wage. The alternative of having no legal minimum wage at all seems to me to be a priori morally indefensible, since it would make the market the *only* effective arbiter of what a Just Wage is. I don't think that is compatible at all with the entire century-plus of modern Church Social Teaching, from Rerum Novarum onward.

There's one other consideration. A minimum wage also serves as an important judgment (or maybe "marker" is the word I'm looking for) of social solidarity. It sets up a floor of reward, where society says "if you do honest work, you will get at least X. We will not let someone profit from paying you less than that. Honest work is inherently worth that certain amount X." That honest work has "inherent worth" to at least some degree is, I think, also an inescapable part of CST. And given exactly how rich the US is, this is easily affordable.

dpt said...

"Woe to us if we think
the fate of the weakest members of our human family aren’t our problem"

Am I my brother's keeper?

"where in all you quoted does either Scripture or the Catechism insist that one must enact minimum wage laws?"

There is a mindset for some that taxes and gov't mandates= charity.

Father Martin Fox said...

One of the more subtle things I think is clear from Catholic social teaching -- I think it's brought out especially in Centessimus Annus -- is that while "society" and "government" are overlapping terms, they are hardly synonymous; and it is worth noting how most of the mandates are to what society ought to do in pursuit of the common good and the raising of the dignity of the poor and vulnerable, etc.

Certainly, there are times when the best way, or even the only practical way, to address this is through government action. But the door is wide open for non-governmental means, and Centessimus Annus does spend some time reflecting -- for the first time I believe in the whole history of Catholic social teaching, or at least at the most length -- on the pitfalls of government action.

So I believe I am on solid ground in advancing the notion that perhaps we in the United States are in an excellent position to do precisely that; and there are good reasons why it might well behoove us to do that: namely, that too much government action can cause other social institutions to wither.

Victor makes a fair point about the pedagogical value of some sort of minimum wage. Well, okay.

It's ironic that Seamus' argument dovetails with that: the hike he backs is good because its so modest; he concedes that if it goes too far, it will cause harm.

I would have less problem with this ballot issue (although I'd still be against it for other reasons) if it didn't include an automatic mechanism, which simply strikes me as a stupid way to legislate in general. Will it automatically reduce the minimum wage if we enter a period of deflation?

I lack a crystal ball, so I can't be sure that somewhere, in the next 10-20 years, we won't undergo a deep deflationary period. It happens. If overall wages and prices dropped by, say, 30%, will this mechanism be in the public interest? Yet just try to repeal it!

Victor:

The sort of micromanaging by government of various minimum wages for various categories simply strikes me as ill-advised. People don't fit neatly into the categories devised by well-meaning government agencies -- which would continue to multiply, and it wouldn't be long before you have this extensive body of regulations, plus interpretation of the same that bewilders the ordinary small-business owner. Consider our tax code as a pertinent example.

The Church is certainly right in attacking idolatry of the marketplace. But that said, it remains true that the marketplace is a marvelous mechanism -- certainly imperfect -- but still marvelous in what it accomplishes in meeting the needs of all and coordinating economic activity in pursuit -- gasp! -- of "the common good."

And the thing is, nothing is better; so while there is a need to acknowledge the limits of the marketplace, to avoid worship of it, and to correct its defects . . . the Church's diagnosis, while correct, doesn't necessarily give rise to a remedy!

My "bias" is one of deep skepticism of government action.

Seamus said...

Thanks for your patience, Father. I'll try to catch up now.

"Seamus: where in all you quoted does either Scripture or the Catechism insist that one must enact minimum wage laws? I didn't see it there."

"Have you checked the 17th chapter of Mark's Gospel?"

Sorry, that was an inside joke. Growing up in a large, Irish-Catholic family, both my Mother and Grandmothers would often tell my brothers and I that we had to do certain things "because God wants you to." (e.g., shovel the snow off the driveway and sidewalk of that cranky old guy that lived down the block -- and do it for free, no less.) A "smartass" even back then, I would challenge my sweet Grandmother by asking, "Grams, how do you know that God wants me to shovel Mr. Stankus' driveway for free?" Always quick on her feet, Grams would tell me that my answer could be found "as clear as day" if I would only dust off my Bible and actually read it. Invariably she would suggest -- with a look of disgust on her face thrown in for good measure, I might add -- that I "take a look at the 17th chapter of Mark." I think I was a senior in high school before I realized that there only 16 chapters in St. Mark's Gospel.

Sorry for the digression. Back to your question ...

There is certainly nothing in Sacred Scripture or The Catechism that would prohibit a state from establishing a minimum wage law -- or, for that matter, child labor laws, work safety regulations, workman compensation laws, overtime regulations, etc. As you are well aware, The Catechism tends to speak in generalities. I don't know anyone that would suggest that because Sacred Scripture or The Catechism doesn't particularly authorize a particular act, that one could then conclude that the action was forbidden.

That said, and in addition to the paragraph from The Catechism that I quoted in a post above (CCC # 2434), paragraph # 2430 certainly speaks to the appropriate role of the state ("public authorities") in resolving disputes that naturally exist between wage-earners and business enterprises. I would respectfully submit that it is entirely appropriate for a state to establish minimum wage laws as a means of both fighting poverty, as well as advancing the general welfare of all.

CCC, # 2430

"Suppose for the sake of argument, all child labor laws disappeared overnight; how many 8 year olds do you think would be working band-saws in a year's time; in five?"

I'm sure we'd be able to find at least one, which is reason in and of itself for not scrapping child labor laws.

"Could you think of any reason -- other than the sanction of law -- that that wouldn't happen. I can think of plenty."

I can think of plenty of reasons as well, Father. I can also think of plenty of business owners, motivated by greed, that would not hesitate for a moment to cut corners and place their employees -- including children, if they could -- at risk of injury if only the law would allow it.

Whether we like to admit it or not, there are millions of people in this country whose conduct is restrained only by fear of criminal sanction. Even worse, there are millions more whose conduct is not restrained even when criminal laws severely sanction the sort of conduct they engage in. One need only look to the 2 million + Americans that are currently in our jails and prisons for evidence that not every American is all that eager to follow the Golden Rule.

Incidentally, even with the child labor laws currently in place, one would not have to look very far to find gross violations of the law that place children at considerable risk of injury. To wit:

Walmart Agrees to Civil Penalty For Child Labor Law Violations That Include Children Operating Chain Saws

Upstate Group Fined For Child Labor Violations That Involve Unpaid Laborers Churning Soap

You know, I knew I probably shouldn't have told that story about my Grandmother. I'm going to get some lunch. Sorry for doing this piecemeal. I'll be back later.

Father Martin Fox said...

Seamus:

Twisting my words ill serves your purpose, seems to me.

I didn't ask you where the Catechism or Scripture prohibited passing minimum-wage laws; I asked (see above) where they said one MUST enact them. Is there some lack of clarity, on your part, in the difference between what I actually asked, and the unasked question you posed, and answered?

I never challenged or denied anything the Church said about the state intervening in economic matters. I am well aware that the Church considers that a legitimate tool, and calls for it when needed. Nothing I have said has called that into question. My point has been to ask whether a particular proposal -- minimum wage laws -- are a good idea. Period.

I have not anathematized you for advocating them; but the drift of your comments, to me, seems to suggest anyone who dissents from enacting minimum-wage laws is a bad Catholic. If that was not your intent, you might want to consider that your zeal is coloring what you actually say.

As far as child-labor laws, well, call me a squish, but I guess I'll live with them. My point, perhaps too subtle, was that it strikes me as highly improbable that employers are going to want 8 years old running bandsaws (even if they don't value the children, don't they value the equipment? Or do you think such valuable equipment is safe from an 8-year-old's destructive abilities? Have you ever met an 8-year-old?), let alone the improbability of parents wanting their 8-year-olds running them. Oh, it's conceivable, but very hard to imagine a world in which that's going to be a major social problem.

And the child-labor violations anyone cites from the U.S. are hardly of that variety. Since when does Walmart (or anyone) higher 8-year-olds?

The link you provided didn't provide many details; wonder why? How old, for example, were the "children" who operated chain saws? All we know is under 18.

I don't happen to know how old one should be to operate a chain saw. I know that at 44, I'm not ready to do so, but not because of age; at least, not yet I don't think. If the child was 17, that may indeed be two young, but I don't know that that's really true. I'd be curious from those living in rural areas if children 15, 16, or 17 using chainsaws, on farms for example, is all that unheard of.

Churning soap doesn't, on its face, sound like a terribly cruel thing to have a 15-year-old do. Considering how a lot of our pampered teenagers spend their time, it might be a salutary improvement! But I've never churned soap, either.

My point is, there's child-labor and there's child-labor. It's a rhetorical bait-and-switch to cultivate Upton Sinclair/ Dickensonian images of grubby-faced orphans cowering before the maw of frightful machines, dawn to dusk, and then cite stories you do.

I really don't know where one draws the line on "child labor." Do you? Is it abusive for "children" to deliver newspapers (largely a thing of the past, sad to say)? To spend the day with dad, carrying boxes of candy and helping to fill vending machines (what I did as kid, during the summer)? Working the farm, running all manner of equipment? I'm just guessing, but I bet "children" are frequently running tractors, threshers, balers, etc., and have been, on farms, since time immemorial.

Or milking cows, or feeding the livestock, etc. Is this abusive?

Was Our Lord being abused if, as we suppose, he assisted St. Joseph in his carpentry work?

Seamus said...

"But your blizzard of citations, however impressive on one level, in the end isn't impressive at all. The gist of your argument is that the hike you advocate is too small to have negative economic effects. Which means it doesn't cost very much. Which means it doesn't put very much into anyone's pocket."

"You can't have it both ways: you can't say, to the payer, "this'll be nothing to you" and say to the payee, "whoee, this'll be a big step up for you!"

That is precisely what I am saying.

The current minimum wage is $5.15 per hour. When Issue 2 is passed -- and it will pass -- that wage will rise to $6.85 an hour. For someone making the current minimum wage, that is a pay raise of $1.70 an hour, or a 33 % increase in pay. For full-time workers -- and a majority of minimum wage earners are full-time employees -- that means an extra $68 a week or just about $300 a month in additional, pre-tax earnings. (Possibly even more when earned-income tax credits are factored into the equation.)

Do me a favor, Father, and walk into that soup kitchen that was mentioned in St. Boniface's last weekly bulletin and take an informal poll for me. Ask the poor there whether they think an extra $300 a month in the pay envelope would be a big help -- or "a big step up," to use your words -- to those currently earning minimum wage. Talk to some of those single mothers waiting in line at the Bethany Center Food Pantry. Ask them whether they think an extra $3,500 a year will help them put groceries on the table, or even help them put a cheap car on the road so that they can possibly travel to better paying jobs. You better believe that raising the minimum wage is a big help to the more than 700,000 Ohioans that would benefit from this proposed legislation.

Corporate Success Hasn't Benefited Ohio's Lowest Paid

What's even better, is the flip-side of that coin -- namely that job creation will likely increase -- not decrease -- if Issue 2 is approved and the minimum wage is increased to the proposed $6.85. That is a fact, I note, that you have done little to refute.

Once again, and as anyone that gave anything more a cursory glance at the citations I have previously provided will note, states that have increased their minimum wages have been far more successful at job creation than have those states that have refused to increase their minimum wages. As has also been previously pointed out, Ohio companies covered by the proposed law can more than afford to pay for these new wages -- minimum wages that haven't been raised in a decade. In short, we can have it both ways! Issue 2 helps the working poor considerably while at the same time avoiding the deleterious economic effects that, at times, are associated with sharp increases in wages. Issue 2 is a good, sound proposal that deserves the support of the Ohio electorate.

Yet Another Study That Speaks To The Effects Of Minimum Wage Increases On Business

Victor said...

Seamus wrote:

What's even better, is the flip-side of that coin -- namely that job creation will likely increase -- not decrease -- if Issue 2 is approved and the minimum wage is increased to the proposed $6.85. That is a fact, I note, that you have done little to refute.

Because it's nonsense on its face, and you've given no reason WHY it would be true, just linked to a bunch of economic studies that don't prove *that* point if you read them carefully.

For example, you say that "states that have increased their minimum wages have been far more successful at job creation than have those states that have refused to increase their minimum wages." But that doesn't prove either causation or causation in the direction you posit.

As for causation generally, the cited point doesn't mean that the act of raising the minimum wage caused the high job growth rate. On the one hand, it cannot speak to what the job-growth would have been, ceteris paribus, had the minimum wage not been increased because counterfactual history is impossible. There is an in-principle epistemological barrier here. And claiming that raising the price of a thing ("labor" in this case) causes an increased propensity to buy the thing, ceteris paribus, is too illogical to credit. Further, if there is a causation, it's simply far more logical to think it goes the other way -- in other words, states where the underlying economy is booming or ready to boom were seeing the natural upward pressure on wages and so were free to raise the minimum wage with less (or counterfact-hidden) economic damage.

Andrew said...

Here's my humble 2 cents. I agree that $5.15 isn't a living wage for a family, but neither is $6.58. However, nobody makes that little money unless they are a really bad employee.

If you can't survive on minimum wage, then get a "real" job. If you're not qualified for a decent job, get an education. At risk of sounding like a heartless Republican, whose fault is it when an adult with several children is stuck working third shift at Taco Bell? This is the land of opportunity, all you have to do is work harder. I started at minimum wage at my first job in high school, but I'd had three modest raises within two years.

What's the point in raising the minimum? It's supposed to be a "starting" point. You're supposed to be promoted from the grill to the register to the management team. Haven't you seen those McDonald's commercials? (Mama, I'm an assistant manager!) The only people that should be earning minimum wage are newbies and teenagers. Why force employers to pay more than something is worth? We already give poor families free public education for their children, free school lunches, and subsidized housing? Is it too much to expect folks to speak English, get a GED, and develop a work ethic and EARN themselves a decent wage?

Tim said...

It is immoral for a government to force a business to pay a worker a set minimum wage. It prevents the business from hiring as many workers as his business can afford, hence, it artifically reduces the number of jobs available in a given economic situation. Hence, it oppresses the poor. And that is evil.

Victor said...

No, Tim. It is at most imprudent or unwise.

There is no moral obligation per se to produce as much wealth as possible without consideration for other goods (indeed, quite the contrary).

We know from Our Lord's lips that to underpay for work is damnable (and it is immoral to underperform for pay too).

Seamus said...

"Because it's nonsense on its face, and you've given no reason WHY it would be true..."

And what do you think poor people do when they earn extra money? They spend it, and they spend it at local businesses. Those local businesses then tend to hire more people, often at wages higher than what they were paying before the minimum wage hike.

Seamus said...

"It is immoral for a government to force a business to pay a worker a set minimum wage. It prevents the business from hiring as many workers as his business can afford, hence, it artifically reduces the number of jobs available in a given economic situation. Hence, it oppresses the poor. And that is evil.

Would it also be immoral, Tim, for a government to, say, enact a local fire code? That fire code might, by force of law, require businesses to spend money that they otherwise might spend on hiring the poor?

Mark Anthony said...

Charity (remember that virtue?) demands the admission that this issue, like most in the moral and social justice realm, that there is no required Christian position. People of good will can and will dispute the means of reaching the desired goals of decreasing the devastating effects of poverty and increasing the opportunities for economic security. It seems to me that the only forbidden position on such issues for a Christian is to deny an obligation to promote these goals.

A careful reading of Catholic social teaching makes clear that the primary subject is the person, not the business or government. Any policy or action taken by a government or business must be ordered to the benefit of people. Other objects, such as profits, economic growth, effecient means of production, etc., are means to the end of producing just conditions for people. No matter how "good" or "realistic" or "effective" a policy may be for a business or a nation's economic strength, if those policies succeed by maintaining or accepting a certain percentage of ongoing poverty, then they fall short of the demands of Catholic social teaching.

So, as to this discussion of minimum wage laws, it seems to me that a reasonable argument can be made for either side as to the effectiveness of particular laws of this type. Whether to set such an amount at $5 or $6 or $20 will be a function of many social and economic conditions that can vary widely. But it bears remembering that such laws were imposed because some businesses were not paying a living wage. Conspiratorial theories that minimum wage laws were imposed to hurt capitalism are baseless.

The ultimate question for a Christian under such circumstances is, "Would the removal or dimunition of a minimum wage help or hurt the economic health of the particular poor in my area (city, state, nation)?" If it seems possible that the loss of the minimum wage, or the failure to raise it to an effective level, will decrease the wages of the working poor as they now live among us, then the law must be maintained. The fate of a particular business cannot trump the fate of the actual poor, nor can the theoretical promise of "trickle down" prosperity serve as a sufficient basis to advance or protect the interests of a business or industry over the actual effect on the poor.

Such a position is not "anti-business". There are ways to assist businesses if there is a damaging effect on them by such laws (tax credits, e.g.). But to insist that the only way to help the working poor is to maintain a policy that permits the employer to have the right to pay the employee a wage which will not provide the basic needs of the employee is Orwellian. Even more to the point, it removes the primary focus from the actual needs and situation of the poor in favor of a theoretical concern of poverty in general. Such a position seems to me to violate Catholic social teaching.

Anonymous said...

Companies often claim they will be hindered in offering additional jobs if they must pay a higher minimum wage to the already-employed. For some reason many assume this is correct - that the rise in wages will come directly from a mythical fund set aside for the hiring of additional workers, depleting that fund and causing hopeful job applicants to be turned away. This is naive. Think further. The money might have to come out of the pockets of already overpaid company administrators.
Julia

Darwin said...

And what do you think poor people do when they earn extra money? They spend it, and they spend it at local businesses. Those local businesses then tend to hire more people, often at wages higher than what they were paying before the minimum wage hike.

However, if the working poor are buying goods and services provided by other working poor, they will arrive at local businesses to find that prices have increased due to the increased cost of labor. The only way their actual purchasing power will increase is if:

a) They now make more in comparison to impoverished workers in China who have received no increase in their wages, and thus the local working poor feel richer because they can now purchase more of the fruits of foreign labor.

b) The increased cost of labor has caused some innovative company to find a way of automating the production of their goods or services, thus putting some low skilled workers out of work, but providing cheaper products for the remaining working poor to buy.

I'm currently six years out from having made minimum wage, and honestly, back when I did, the most frustrating thing about it (even more so than the low wages) was the incredibly low level of performance expected out of a minimum wage job. It was frustrating to be doing so little.

So while on the one hand I understand the desire to help people making minimum wage earn more, I don't understand how any vaguely responsible head of household could be stuck making minimum wage for more than a few months. You don't have to be a brain surgeon or an engineer to make twice minimum wage, you just have to be vaguely responsible and hard working.

Seamus said...

"Twisting my words ill serves your purpose, seems to me."

I didn't twist your words, Father. I quoted you directly. I may not know much, but I do know how to copy and paste, which is precisely what I did above.

"I didn't ask you where the Catechism or Scripture prohibited passing minimum-wage laws; I asked (see above) where they said one MUST enact them. Is there some lack of clarity, on your part, in the difference between what I actually asked, and the unasked question you posed, and answered?"

I answered your question, Father.

In response to your question I responded by asking a rhetorical question of my own: "Have you checked the 17th chapter of Mark?" I then followed that question up with a charming yet true story about how my beloved, now deceased, grandmother ("Grams") would often get my brothers and I to do certain things by claiming that God demanded we do as much. (As anyone that reads Sacred Scripture "knows" all too well, God precisely and explicitly spells out his demands for 10 year-old New Jersey boys in 17th chapter of Mark's Gospel.)

Since there are, as I mentioned in my story, only 16 chapters in St. Mark's Gospel, telling you that you could find a Scriptural mandate for minimum wage laws in a part of the Bible that doesn't exist was, I believe, a rather tacit admission that there is no such requirement for minimum wage laws to be found in either Sacred Scripture or The Catechism of the Catholic Church. In short, I told the Grams story for a reason, my words about digressing notwithstanding. Forgive me for being folksy instead of direct in answering your question. I didn't think my "Grams story" would have been lost of any of the smart people on this blog site.

"I have not anathematized you for advocating them [minimum wage laws]; but the drift of your comments, to me, seems to suggest anyone who dissents from enacting minimum-wage laws is a bad Catholic. If that was not your intent, you might want to consider that your zeal is coloring what you actually say."

I never once suggested that you or anyone else was a "bad Catholic," Father. Nor do I believe that any fair and objective reading of my words above would lead someone to that conclusion. That said, you can rest assured that I will, much like your Archbishop, continue to zealously defend those proposals that, in my mind, advance the interests of the working poor. As a Catholic, I believe I am obligated to do just that.

Mark Anthony said...

Given your screen name, Darwin, I suppose it is to be expected that you would be partial to a "survival of the fittest" point of view. Still, to opine that any head of household ("responsible adult" I guess?) who makes minimum wage for more than a few months is not "vaguely responsible and hard working" is to engage in the time-honored tactic of blaming the victim for his or her misfortune. Works great for "conservatives" trying to gain votes from the well-off by villianizing those below them on the economic ladder, but it sounds especially malicious from someone claiming the name of Christ and the Catholic tradition.

Only a well-fed, warm, financially secure member of our society could dare to think that setting a minimum wage is going to encourage anyone to "settle" for $6 an hour! The working poor are fully aware of the advantages of making more than that when they are buying food, paying bills, taking children to the doctor.They do not need those with larger bank accounts to tell them about the advantages of upward mobility. Certainly we can refrain from implying that the poor want to remain in their state. The reality is that may slip into poverty or remain in its grip through no fault of their own, and they hate their woes much more than even others hate paying taxes to support them!

We are Christians. We care and serve, not judge. Imagine St. Martin of Tours handing half his cloak to the beggar and saying, "Here, but you shouldn't need that more for more than a few months. Get a job!"

Victor said...

Seamus wrote:

And what do you think poor people do when they earn extra money?

That "extra money" comes from ... where? What would it be doing differently from a world where there had been no minimum wage increase?

Redistribution may be just, but it is not an economic stimulus.

Darwin said...

Given your screen name, Darwin, I suppose it is to be expected that you would be partial to a "survival of the fittest" point of view. Still, to opine that any head of household ("responsible adult" I guess?) who makes minimum wage for more than a few months is not "vaguely responsible and hard working" is to engage in the time-honored tactic of blaming the victim for his or her misfortune. Works great for "conservatives" trying to gain votes from the well-off by villianizing those below them on the economic ladder, but it sounds especially malicious from someone claiming the name of Christ and the Catholic tradition.

As for the screen name, you're of course welcome to click through and see what the DarwinCatholic blog is about. It has nothing to do with survival of the fittest in the libertarian sense...

My point was no so much to "blame the poor" as to ask how common it really is for adults responsible for households to work minimum wage jobs. Contrary to what some may be assuming, I come from a generally lower to lower-middle class background. Most of my relatives don't have college educations and work in areas like construction. And even having gone to college, I headed into the job world with no connections and put in my time doing service, phone center and low level retail kind of work before moving into higher paying jobs.

And having been there (and not so long ago) and indeed having done hiring for fairly low paying jobs (I was the hiring/training manager for a call center in West Virginia for nearly a year) I know how _hard_ it is to get good workers -- even for a job where the only skill is the ability to read off a screen with relative facility and not swear at customers.

See my question is: is there really this huge number of working poor stuck in long term minimum wage jobs and desperately in need of a minimum wage increase to help their families -- or is the appear of increasing the minimum wage mostly to guilty members of the middle class who like the _idea_ of such a move, even though most people actually making minimum wage are either tean agers or people with absolutely no skills or willingness to work.

Dont' get me wrong. Being stuck in the working lower class is no fun at all. But the real working lower class (or at least the one I know from my extended family) make 10-15/hr -- which still doesn't go far in raising a family. But people making those wages won't see any benefit from a minimum wage increase.

Seamus said...

"That "extra money" comes from ... where? What would it be doing differently from a world where there had been no minimum wage increase?"

You mean aside from the additional profits retail businesses will generate from the additional purchases minimum wage workers will earn after their wages are increased -- profits that those businesses, in turn, often use to hire new workers? Is that what you mean?

Well, for starters, the money might come from an increase in productivity that, as Henry Ford taught, invariably comes when you pay workers better. ("I pay my workers enough to actually purchase for themselves the Model T they spend their days building.") Secondly, from the increased savings that business will experience through improved worker retention rates. (Surely, you won't dispute the notion that "the lower the wage, the higher the employee turnover?" Nor, I trust, will you dispute the notion that experienced workers produce more than, say, rookies or trainees?) Thirdly, from the savings businesses will experience on reduced expenditures that otherwise would be spent on recruitment and training purposes. I can go on if you'd like.

I think it warrants mention, once again, to point out that the minimum wage in Ohio hasn't been raised in 10 years. During this time, inflation has had a crippling effect on the purchasing power that minimum wage workers experience. Furthermore, and as we all know, corporate profits certainly have not remained stagnant during that time. (Incidentally, although wages paid to the poorest workers largely have remained stagnant, corporate executives continue to receive healthy increases in pay, possibly even yet another source for the monies that will be spent on pay hikes for minimum wage workers.)

Indeed, and as was pointed out in a citation I previously made, corporate profits in the US have skyrocketed 50% in the period between 2000 and 2005.

Just one source for the claim made immediately above

In short, it will not be all that difficult for Ohio employers to find the money to pay for an increase in the minimum wage, a wage that is paid to only a small percentage of the overall workforce. Again, Ohio can afford Issue 2.

"Redistribution may be just, but it is not an economic stimulus."

Does this mean that I can now throw out my 1981 edition of the Laffer Curve?

The Laffer Curve: Golden Oldies Straight Out Of The Reagan Playbook

At the considerable risk of running off on a tangent, I will never quite understand the thinking of those on the political right who, rightly or wrongly, posit that cutting taxes -- often for the most wealthy among us, no less -- will somehow stimulate the overall economy to the benefit of all; but who, at the same time, will argue that increasing the minimum wage just a pittance for the poor has a deleterious effect on that same overall economy. Why is cutting the capital gains tax rate for Bill Gates a good thing, but paying the 21 year-old single mother that pumps your gas on the overnight shift a bad thing? Why is cutting the amount Paris Hilton pays in inheritance taxes a good thing, while denying a few extra dollars a week to a full-time worker waiting for a meal at Father Fox's soup kitchen a bad thing?

Seamus said...

"...even though most people actually making minimum wage are either tean agers or people with absolutely no skills or willingness to work."

With all due respect, Darwin, almost three-quarters (74%) of those who stand to benefit from Issue 2 are 20 or over. Moreover, a majority of minimum wage workers are also full-time workers.

Large Majority of Affected Workers Are Adults

Seamus said...

"However, if the working poor are buying goods and services provided by other working poor, they will arrive at local businesses to find that prices have increased due to the increased cost of labor."

If there is one thing the working poor earning minimum wage know, it is just how much inflation hurts them. In Ohio, their wages haven't been raised in a decade, after all.

That said, given that the percentage of workers covered by Issue 2 is relatively small when compared to the overall size of the Ohio workforce, much less the size of the Ohio population; and further given that the costs associated with a minimum wage hike pale in comparison to the enormous increased profits that corporations have earned in, say, just the last five years alone; I would have a tough time believing that Issue 2, if enacted, would have very much of an inflationary impact on the overall economy -- beyond those factors that exist already, that is.

Darwin said...

Seamus,

You keep talking as if there is this large pool of people out there who are stuck working minimum wage jobs long term. As if somehow the fact that the minimum wage hasn't increased in ten years means that a bunch of working poor out there have been making the same 5.15/hr for the last ten years.

It is certainly true that there is a population of adults who make minimum wage. It is also certainly true that those people are poor. And it is true that that population has not shrunk over time. But that does not mean that it is the same people making up that population year after year.

Think for a second about all the non-skilled jobs that still pay significantly more than minimum wage for the very reasons that you list: improved productivity, longer tenure, etc. (What industry do you work in? Is it really your experience that employers are so dumb that they won't pay a few extra bucks an hour to get better work? It isn't mine.)

A lot of fast food jobs already pay over minimum wage. They're undesirable jobs, so they have to pay more.

Construction usually pays significantly over minimum wage.

Many janitorial jobs pay over minimum wage.

Call center jobs almost always pay at least 2-3 dollars over minimum wage.

None of these are princely sums, and none of them are fun jobs. But they're out there, and almost always hiring. And it didn't take government intervention to get those wages above minimum -- just good business sense. People with drive and the need to make more go and take them, and get themselves out of the minimum wage population.

Seamus said...

"You keep talking as if there is this large pool of people out there who are stuck working minimum wage jobs long term. As if somehow the fact that the minimum wage hasn't increased in ten years means that a bunch of working poor out there have been making the same 5.15/hr for the last ten years."

Regardless, Darwin, of how long one maintains a minimum wage job, the fact remains that there are, currently and as we speak, 700,000 Ohioans that will benefit if Issue 2 meets with the approval of the Ohio electorate. Most of them (74%) are adults, a majority of them work full-time, and -- God help them -- all too many have to support someone other than themselves (e.g., a child) on the wages they earn.

$5.15 an hour buys a lot less today then it did ten years ago. It is a time for a raise. It is a time for a fair wage.

ron kozar said...

Who are these "poor" about whom you all keep talking? I will agree that we should do whatever we can to help those with no home, no food, and so on. They are poor. But does the minimum wage have even the slightest effect on the few Ohioans who meet that description? I think not.

The "poor" that you are really talking about are those who fall short of an arbitrary and relative American definition of poverty. Most of these "poor" have a roof over their head, indoor plumbing, a fridge, a TV, a cell phone, and other creature comforts unknown even to the rich of previous generations.

The question arises whether we are transmogrifying the Christian duty to alleviate poverty into a duty to alleviate inequality, which is far from unambiguously Christian.

Anonymous said...

Ron, even if people have a tv set and indoor plumbing, comes a day when they need medical care or the car breaks down or they'd like to see the kids get an education. Maybe they would even like to buy a magazine subscription now and then or save up for retirement. People who work for minimum often work harder than the rest of us but have no cash for the little pleasures we enjoy. And everything is relevant; for instance, when you want to take someone out to dinner at a halfway nice restaurant to celebrate his or her birthday, and you just cannot afford to do it, are you consoled when you remind yourself, "Who cares! I have indoor plumbing!"
Julia

Dave Oatney said...

I will speak more to Ohio's I and R process...it is rediculous.

Having been liberated from Ohio's utterly rediculous Constitutional system and now living in a State whose Constitution clearly demarcates the difference between law-making and Constitutional change, I find it beyond silly that every legal change in Ohio needs a Constitutional amendment. The Ohio Constitution is an overblown morass of contradictory statements that makes the present form contrdictory to the basic document itself.

Ohio needs to make it more difficult, not less, to amend the constitution of that State, and to recognize the difference between lawmaking and outright Constitutional change: A constitution is not a document to be used as a forum to draft, redraft, and scrap legislation.