Am I the only person who is sick of the debate over the minimum wage? Both here and at Inside Catholic the debate has recently come up.
I must say that, in the first place, I find the various attempts to cite empirical evidence amusing at best. No matter what any one economist says, there is another waiting around the corner to contradict him. Just reading the Wikipedia article on the minimum wage shows that, once again, ‘conventional wisdom’ and academic consensus has been turned upside down by new studies and new data.
My belief is that we cannot organize an economy on the basis of quantitative analysis and empirical data alone. Economists will always disagree. A new study will always prove that the old wisdom is, if not worthless, suspect. Meanwhile people’s livelihoods are at stake. Economics can be informed by scientific analysis but it must be guided and ultimately determined by social and moral considerations.
That is why attempts to flippantly dismiss the teaching of the Church on social and economic matters get under my skin. The Church’s insistence upon a ‘just wage’ is met with derision and sometimes mockery from certain Catholics. It is claimed that the Church cannot be considered a guide on economic matters, that it has flouted the ‘laws of economics’, laws which any observer of the literature knows are not immutable but subject to constant revision and conflict among economists. Pope Leo XIII took note of the same tendency in science as a whole when, remarking on the errors of rationalism, he wrote,
These detestable errors, whereby they think they destroy the truth of the divine Books, are obtruded on the world as the peremptory pronouncements of a certain newly-invented “free science;” a science, however, which is so far from final that they are perpetually modifying and supplementing it. (Providentissismus Deus, 10)
No one should mistake this for a rejection of science; Leo also devoted an entire encyclical to the explanation and defense of science in its proper role (Aeterni Patris). Our modern minds tend to cringe at the idea of science taking a backseat to anything. But even Einstein, the greatest scientific mind of the 20th century, rejected the idea that science should set policy:
[S]cience, at most, can supply the means by which to attain certain ends. But the ends themselves are conceived by personalities with lofty ethical ideals and—if these ends are not stillborn, but vital and vigorous—are adopted and carried forward by those many human beings who, half unconsciously, determine the slow evolution of society….
[W]e should be on our guard not to overestimate science and scientific methods when it is a question of human problems; and we should not assume that experts are the only ones who have a right to express themselves on questions affecting the organization of society (From the essay ‘Why Socialism’? – yes, Einstein was a pinko, if not a Red).
The bottom line is: science can only take us so far, especially since scientists often disagree, and even when they do agree, later revise their findings. The limitations of science are clear. So, given that a) scientists disagree, and b) economics can barely be considered a science, and c) economists disagree with one another about the minimum wage, it seems to me that we ought to just dispense of all the references to what the ‘laws of economics’ say. They say many things depending on how one finds, studies and interprets data, and only faith, be it religious or ideological, can guide us towards what we want to hear and do.
Moving on, the question becomes – are minimum wages moral? Is it wrong for the government to decide what employers ought to pay?
Well, as much as I might be inclined to criticize the democratic process in the US, to note its limitations and shortfalls, it must still be acknowledged that it is the vast majority of the American people themselves who want a constantly increasing minimum wage. Only twice in recent electoral history that I am personally aware of, out of dozens of votes in dozens of states, have minimum wage increases been defeated by the voters. The rest of the time they pass by large margins.
The electoral record blows to pieces the notion that it is merely leftist government bureaucrats that want to get their hands on business, the typical ‘government versus business’ dichotomy – the minimum wage has garnered so much consistent support from across the entire political spectrum of voters themselves that it is not a stretch to say that it is one of America’s democratic institutions. Thus the contest is really between the democratic will of the people and the interests of a band of ideologues and the Chamber of Commerce.
I imagine that this is typically explained or rationalized with claims that the working class voters are short-sighted and self-interested, not realizing that in the long run they are somehow hurting themselves (in other words, everything a good commercial capitalist hopes they are when they walk into his store, everything his advertisements and subliminal messaging aims to make them, everything the official philosophy of this establishment screams at them every hour of every day through every available media outlet). Is this true?
I don’t see how it could be, at least not in this particular case. Only 2% of the workforce makes minimum wages. That might seem to make the whole matter irrelevant either way. It certainly makes the tone and tenor of this debate all the more ridiculous. I think the explanation for electoral victories of minimum wage propositions lie in a healthy impulse on the part of the people to want to regulate the power of businesses over workers, of employment and management over workers and their wages. All of the tongue-clucking of the economists will never convince voters that granting more power to business will improve their lives. They know from bitter experience that what employers want is more work for less pay, and they will use the means at their disposal to reverse the trend.
It also might have something to do with the fact that doom-and-gloom predictions made by economists never come true. The wiki article, for instance, notes that there has been a 50 year consensus, only disrupted in the mid 90s, that minimum wages caused unemployment and contributed to every other economic and social problem short of the plague. Yet those 50 years saw the establishment and gradual increase of minimum wages, and for much of that time, until the mid-70s at least, improving economic conditions for American workers.
At a certain point, when the sky doesn’t fall down, when the supposedly negative effects of a policy never actually materialize to any noticeable degree, when the country actually manages to grow and prosper for decades in spite of the policy, when the difficulties it encounters are more clearly and directly related to other policies (like, for instance, totally deregulating the financial sector) – I think I’m willing to trust the instincts of the people and what I observe with my own two eyes.
All of that being said, I don’t think raising the minimum wage is a solution to anything. I think the impulse to raise it is a healthy one, as I said, but I think the policy itself achieves very little. My deepest wish is that Americans would begin to move beyond the wage system and the labor market and begin organizing themselves as partners in cooperative enterprises. When all are owners, wages become irrelevant. And I think the same impulse that prompts the voters to raise the minimum wage even when it will have no effect on their own wages can translate into a drive to form cooperative enterprises. The name of the game is more control over one’s economic fate, elevation beyond a mere disposable part in a machine, beyond an isolated worker and consumer, and towards a greater sense of social being.
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