Living Wage Explained

Look here.  This is what we’re talking about when we say “living wage”.  Specifics.  The real deal and why it matters, and what the numbers are.  Read read read.

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FYI I’ve gone back to submersion here.  My apologies to those of you who are in my e-mail backlog, I will get to you soon.

CRS – Somalia Famine

If you are looking for a way to feed refugees of the famine in Somalia, Catholic Relief Services is there.  Here’s the CRS main page.  (H/T to Red Cardigan for the head’s up.)

 

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Utterly unrelated, but it has to do with CRS: Larry’s Beans makes really good coffee.  100% fair trade, shade grown, and either organic or transitioning to organic.  And wow, good.  Good.  CRS is one of their partners, though I learned about it through an evangelical friend who used to own a coffee shop, and now runs a local Larry’s Beans purchasing co-op.  Yes.  Sometimes (okay, usually), I think of my evangelical home group as a The Gluttony Group.  Because we eat that well.  But we also talk about God and stuff, so it’s a wash.

Health Care and the Living Wage

So when I started writing about the Just Wages, I intentionally left health care out of the picture.  Why?  Because health care is a virtually unlimited need.

I have no qualms about telling you that a person only truly needs so much living space, this much food, that much clothing, and so on.  It is important that we not make an impossible wreck of a straightforward moral teaching, by trying to tack on burdensome ‘extras’, as if love of neighbor were synonymous with ‘upper-middle class 21st century American’.

But how much health care does a just wage pay for?  Not so easy to define.   Set aside all the debates about which care is most helpful, and which is not helpful at all — those are medical debates.  Pretend you know what the useful stuff is, and focus on just the question of ‘how much’.

It can’t be nothing, we are certain of that.  But does the requirement extend to providing every care that might possibly help the worker-patient?  We have an arsenal of extraordinarily expensive tests, procedures and medicines that will extend life a few months or a few years; we have treatments that, in the event they work, will give back the recipient a nearly-normal lifespan, but for which the probability of sucess is quite low.

Those rescued months and years, those chances of success, are absolutely priceless.  I am easily persuaded that, as a society, we should value the medical progress that cutting-edge technology offers.  We should choose legal structures that encourage both doing the research, and making new forms of care more widely available.

But should every business owner consider it a normal cost of business, to provide wages that will cover high-cost-low-expected-return medical treatments?

I think that we need to fall back on the same pragmatic approach used for discerning just wages in other areas:

1) Remedy gross injustices. Keeping in mind that, say, access to a safe water supply remains a significant health problem for many workers around the world.  Employers should begin there.  I’m reminded of my friend Jenn Labit, whose factory in Egypt includes such basic amenities as a safe way to store lunches.  Sounds self-evident, but it was not the standard local business practice.

2) Use the love-neighbor-as-self standard. If senior management and members of the board are willing to accept a given level of health care, it is reasonable to assume the company is making an honest effort at providing a just wage for health care.

Beyond that?  We want to set up laws and regulations that make it possible for employers to efficiently provide a good health-care wage to workers.   We can disagree over the details — I’m not convinced the current legislation coming out of Congress is going to be an efficient and effective fix.   On the other hand, I’m entirely in love with my local water company, and do think that providing clean water is an appropriate use of community — read: local government — power.   Assuming it is done well, as it is where I live.

–> The imperative to pay a just wage works both ways.  On the one hand, it is up to local governments to set up community structures in a way that makes it affordable for businesses to pay a fair wage.  Think: utilities, transportation, policing, insurance regulations, medical safety standards.  On the other hand, the requirement to pay a just wage ought to spur businesses to use their importance in the community to push for change when the local government has fallen short of its mandate.

The living wage, health care costs, and structures of justice

When we talk about what a living wage should include, I think health care is the hardest to pin down. It’s fairly easy to know whether a person is clothed or has enough to eat. Housing is a bit more of a moving target – how much space does an individual *really need*?, we wonder; but still, “keeps me warm, dry, and safe” is a fairly straightforward criteria to assess.

Healthcare, though, is its own special world. Between the life-versus-death and quality-of-life type questions it poses, and the ever widening options for medical care, it is very hard to know and agree about what is the ‘right amount’ of health care. And if you don’t know how much your employees deserve, you can’t know whether you are compensating them adequately in this area.

Still, just because we aren’t ready to answer every question about health care doesn’t mean we shouldn’t try to answer a few to get started. Doing so may, in turn, shed light on further questions.

The other week Darwin posted A Case Study on Costs and “Basic Health Care”, and I saved it in my bookmarks for linking here. If you haven’t read it, you need to go read it. If you already read it once, go back and read it again.

[BTW, having given birth four times in recent memory, I can vouch for the reality of the situation he describes — lest anyone dismiss this as an isolated or extreme example. No, this is the birthing business as usual, pretty much the new normal in the United States.]

Here’s a quote that summarizes:

As it stands, our medical system is built around the assumption that cost is no object. And doctors are very heavily penalized based on any “avoidable” injuries or deaths that occur on their watch. The result is that instead of providing good, high quality “basic” health care, and using extreme (and expensive) measures only when necessary, we often require extreme measures “just in case”. This makes it far, far more difficult to provide “basic” health care to all.

And here is what I want to say: Wake up Republicans! Health care reform is waiting for you! When I talked about ‘structures of justice’ this is exactly the kind of thing I meant. Do not labor under the illusion that a just society – one in which the poor are not trampled underfoot – is the sole province of the dreaded far left. There are good conservative solutions to these kinds of problems, and if we as a nation were to actually enact them, well, the left would have a lot less fodder for their tendency towards grand socialist fantasies.

The living wage is not a left- or right- wing ‘agenda’. It is a moral imperative. You cannot be a just person if your profit or your comfort depends on other people giving you their labor, and you not providing them the means to live in exchange. The good news is, that if we are willing to care about the people who are too sick or too in debt or working too long of hours to be actively engaged in the political process, we can come up with sensible, free-market-compatible ways to create a just society.

To Each According to His Need?

1st Friday, so we’re back to economics, and continuing with the living wage series. To see the whole series, click on the ‘living wage’ category in the sidebar.

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Today I want to tackle what I think is one of the thorniest of catechism’s bits about the living wage. Let’s just jump right into it:

“In determining fair pay both the needs and the contributions of each person must be taken into account.” CCC 2434.

The catechism goes on to list what kind of needs we are talking about:

“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 . . .”

Put these two together, and we come to a very counter-cultural conclusion: A just wage is not simply ‘equal pay for equal work’ or ‘how much your work adds to the bottom line’. Workers’ wages should also take into account how much the workers need to support their dependents. The thorny bit: the worker’s need is going to vary according to family size.

Let the objections begin . . .

A common one goes something like this: “But what about the single mother of twelve who is unable to do anything more skilled than bag groceries, and she lives in southern California? You mean I have to pay her six figures to do a minimum wage job or else I’m going to hell??”

And then there is the more personal: “That’s not fair! Why should the programmer in the next cube, who has the same degree as me and does the exact same work, get paid more than me just because he has a wife and three kids to support, and I’m still a bachelor?”

The first objection refers to an extraordinary case; like all extraordinary cases, it distracts us from the vast teritorries of normal family situations, which is where our attention really ought to lie. We can’t possibly know how to deal with exceptions to the rule, unless we know how to apply the rule to the situations for which it was made. The second objection invites us to remember some of the perfectly reasonable ways employers already solve this problem, without needing church or state to tell them they must. We’ll look at each point in turn.

1. How this all works in the ordinary cases.

Under ordinary circumstances, workers tend to increase in productivity over time. As it happens, people also tend to gather more responsibility in their private life over time as well. A teenager may not have very many work skills, but he typically doesn’t have any dependents, either.

With more experience and education, the worker’s ability to contribute to the profitability of a business increases. In a justly-ordered economy, it is reasonable to assume that a man in his twenties has acquired enough work skills to be able to support a small family. By the time he has a larger, more expensive family, he ought to also have acquired more skills and experience that make his contribution to the business that much more valuable.

It should be noted that the increase in usefulness to the business over time is not only due to collecting additional technical skills. A factory-line worker may be doing the same type of work after so many years on the job, but with experience can be counted on to train other workers, deal with problems in the equipment, be respsonsible for leading a team or for developing ways to improve production, and so forth. There is much more to widget-making than completing the one-week widget-machine operation course. It is reasonable for employers to pay workers higher pay as they grow in experience, even if they continue to do the same general type of ‘low skill’ work.

Likewise, workers changing industries, or returning to paid work after a long absence to care for family members, are not teenagers again. Though they may not be able to contribute as much to the business (or not in the same way) as someone who has built up a repertoire of industry-specific technical skills, under normal circumstances they should not be considered ‘entry-level’ workers. Employers are right to recongize the skills that come with maturity and years of experience handling responsibility, and to compensate the newly-hired older workers accordingly.

In summary: The normal model for the human lifecycle is harmonious with the church’s teaching on just wages.

So what to do with the exceptional cases? You have to treat exceptions to the rule as the exceptions that they are. The solution is often going to fall outside of the realm of just wage rates. But most people shouldn’t fall into the ‘exception’ category. It is normal for adults to get married and have children – being able to support a large family should not be a privilege for the upper middle class. It is normal for workers and their family members to have health problems, even to die – providing for medical care and life insurance should not be considered above and beyond the just wage. Which leads us to the other point I’m going to address today.

2. Fair solutions to the ‘unfairness’ problem.

My point in this section is simple: We already have, within the american economic tradition, a means of providing a just wage to workers that takes into account individuals’ varying needs. By paying workers a base wage based on the specific job, and then offering additional benefits (medical insurance, dental coverage, etc) that scale up according the number of dependents, companies manage to strike a balance between equal work for equal pay versus taking into account the needs of the worker.

It is a model that expands well. According to local needs, this approach could also be used to include benefits such as school tuition for dependents, a housing allowance that depends on family size, and so forth.

This is isn’t the only possible solution, but it is one. I mention it both because it is a viable tool, and because I want to emphasize that the whole notion of ‘taking into account the needs of the worker’ is not some foreign idea being foisted upon us; it is a concept that makes enough intuitive sense that we already do it despite ourselves.

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Next week’s planned topic is a bit of a history-book rant. I promise not to make too many of these, but it’s just so hard to resist when someone tosses out an argument as if begging me to scoop it up and chuck it back. (In this case the work came from fellow amateurs at history, though professionals in their regular fields of expertise.) And if I do go that route, my goal is to follow it on the 3rd Friday with a book review of a history book that I actually like, a lot, just to prove to you that I’m not grumpy about everything all the time. Plus it’s a good book.

Structures of Justice

The Living Wage – Structures of Justice

From CCC 2425: Regulating the economy soley by centralized planning perverts the basis of social bonds; regulating it soley by the law of the marketplace fails social justice, for “there are many human needs which cannot be satisfied by the market.” (CA34). Reasonable regulation of the marketplace and economic initiatives, in keeping with a just hierarchy of values and a view to the common good, is to be commended.

In the land of social justice activists, sometimes the terms “just structures” or “structures of justice” gets thrown about. And when I used to hear those terms, good student of classical economics that I was, I would shudder. Because I was certain – certain – that what the speaker really meant was “we should all be socialists”.

Now the sordid truth is that sometimes – sometimes — talk about “structures of justice” really is codespeak for “You should pass this disasterous piece of legislation that sounds good but is completely divorced from reality and will harm us more than it helps us.”

But it doesn’t have to be this way. And the purpose of this article is to look at what a “structure of justice” might be, and how it fits into a morally sound, economically efficient society.

So what is a “structure of justice”? For our purposes today, a “structure of justice” is anything that is: a) firmly established by society b) that is actually *optional* and c) that changes the balance of the social and economic system.

a) “Firmly established” because it is, after all, a “structure”. It can be a legal structure, such as the tax code or the right to vote, or a physical structure, such as a bridge or a hospital.

b) “Optional”: We often fall into the rut of thinking that because something exists, it must exist. We currently fund the public hospital via property taxes, therefore we *must* fund the public hospital through taxes, and we must have *property* taxes to do it with. Not so. Hospitals can be privately funded, or publicly funded through some other system. Another example, laws against homicide: Now we really must have a law against homicide, nothing optional about that. But we are in no way required to have the exact particular organizational structure and funding system for enforcing that law that currently exists in our community. We could do things differently, and that would . . .

c) . . . change our society. We tend to think of “how things are now” as being “neutral”. No, no. This is the great blind spot of “laissez-faire” economics – the notion that you can somehow have a neutral set of laws and institutions. The various structures we have in place in our society right now are having a constant impact on how our society is – what it is like to live here, who benefits, who suffers, all of that. What we have now is not neutral, and we cannot get to netural. There is no such thing as an economy or a government that is “hands off”, that lets society run its “natural course”. No such thing. Every government, or lack thereof, has its impact.

Here’s an example:

Sidewalks

Where I live, there are almost zero sidewalks. Therefore, children who are zoned to “walk” to the local public school, do not have a safe way of getting to and from school. People who are unable to drive a car for whatever reason (financial, physical, etc) do not have a safe way of getting around town. Even where there are sidewalks, wheelchair (and stroller, and children’s bicycle . . .) accesibility varies from poor to horrendous. How does this change things?:

-Even if you live within walking distance of the place you want to go, you cannot walk there.

-Therefore, you must drive a car.

-Therefore, in order to participate in ordinary social functions such as shopping, working, going to school, visiting friends and relatives, you must be able to afford your own car, and be able to drive it, or find someone to drive it for you.

-Because everyone drives everywhere, obesity and its resulting health problems are becoming widespread. (And because there are few places to walk safely, it can be quite difficult to get out for exercise.)

-Because everyone drives everywhere, pollution is a problem.

-Because businesses must provide large amounts of parking for customers, it is more expensive to operate a business.

-Because businesses must provide large amounts of parking for customers, all the resulting asphalt creates storm water drainage problems.

-Because of all the pavement, our commercial districts tend to be about 10 degrees hotter in the summer than what our normal climate ought to be. Which means we spend more energy on air-conditioning to compensate.

-Because many people must walk (because they cannot drive or cannot afford to drive), even though there is no safe place for them to do so, a certain number of pedestrians are killed every year by motor vehicles. [Though as it happens, in our city, once the proper number of school children have been killed, the local government will, eventually, put in a sidewalk for the survivors.]

Now before you get too excited about my sidewalk rant, let’s reverse it.

Roads:

-Provide us a way to move large quanities of goods efficiently.

-Allows emergency vehicles to access the community quickly and efficiently.

-Allow citizens to travel longer distances with more flexibility than either mass transit or walking and cycling permit.

-Therefore local neighborhoods can remain more stable, even as economic conditions fluctuate – you don’t need to move if you get a job across town, you can reasonably hope to commute. Both spouses can work outside the home without needing to find jobs that are in the immediate area. [Mass transit does this to a certain extent, but tends to favor certain routes, and tends to offer less flexibility than an expansive road network.]

-Makes it possible for institutions [churches, schools, dentists, grocery stores] to set up a single location from which to serve people from a wide geographic area.

You could build your own examples. For example, how does your local property tax structure change the incentives for holding onto different types of real estate? If you had to pay tuition to attend your local public school, would it change your educational choices? [Most of my catholic friends send their children to public schools, which are already ‘paid for’. I balk at high parochial school tuition myself.] What about if there were no public library? [As a homeschooler, I’d be sunk. I live for that place.]

—> The point is this: As a community we tend to fall into the assumption that how things are now is how they have to be, and that any change is ‘extra’. In reality, how things are now is how we are actively choosing them to be.

Now what does this have to do with a living wage?

This: Structures of justice are going to change the living wage. If your workers must own a car in order to get to and from work, you are going to have to pay them more than if they can walk or bike to work. If your local land use policies discourage local agriculture, food prices are going to be a lot more sensitive to fuel prices – which means that when fuel prices go up, the living wage will go up, even if food production itself is not affected.

And in this way, the living wage provides something of a feedback loop. Say, for example, that the local laws lend themselves to concentrating most land ownership into the hands of a few wealthy landowners. Well in that case, employers are going to have to include in their living wage income to cover relatively high rents for their employees’ housing. (Monopolies and oligopolies tend to charge somewhat higher prices.) Which gives employers an incentive to change the local legal structure to encourage more small property owners, so that the wages employers must pay can be lower.

–> When employers are obligated to pay a living wage (whether by law, by social pressure, or by personal moral conviction), a kind of solidarity develops between employer and employee. And then the most basic economic force – personal self interest – can do its job to wake us up to which structures in our society are helping us, and which need to be changed.

The Living Wage: What is it? – pulled from old blog

The last of my old living wage articles, originally posted: October 30, 2007

A question that seems to come up frequently in living wage discussions is “What is the living wage?” This is sometimes used as a (poor) rhetorical device, tossed out desperately, as if to say the fabled concept is unknowable, and therefore not worthy of debate.

Or the question is sometimes used to suggest that the “living wage” being advocated has a meaning so rediculous (McMansions, SUV’s, a television in every pot) that those who propose it are some kind of bizzare breed that answers the question of, “What do you get when you cross a socialist busybody with a greedy materialist?”.

But it is also a question that can be asked sincerely, and deserves as sincere an answer.

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First some thoughts about poverty. I have seen the “what is poverty?” philosophy from the pen of people who elsewhere have proven they really do know poverty when they see it. And there, I saw two types of confusion. First, confusing relative poverty with absolute poverty. Secondly, confusing happiness, contentment, or even resignation, with adequacy.

I think the church teaching on the living wage deals primarily with absolute poverty, not relative poverty. It isn’t about whether a worker can only afford one coat in a society where the norm is to own half a dozen. It is primarily about making sure the worker can purchase the coat he needs.

As we have seen in previous posts, the living wage does not rest with paying “the market rate”. It follows that however much a worker may be willing offer his suffering joyfully, and find happiness in life even when deprived of basic needs, the church does not allow employers to therefore pay suffering-inducing wages.

Likewise, we cannot say the worker earns an adequate living merely because he earns as much as anyone in his position always has earned. If generations before him also shivered in the cold for lack of a coat, that does not mean we of this generation are excused from paying coat-wages.

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Because the living wage deals with specific, objective human needs, it is not all that difficult to make a good approximation of what constitutes a living wage. Let us look, for example, at what kind of housing a living wage ought to be able to purchase:

Adequate housing is the kind that keeps out dangerous animals and holds up to reasonably-expected weather conditions. It needn’t be flood-proof if it is built in an area that last flooded at the time of Noah; it needn’t have its own heat supply if located in a climate where the sun provides all the heat a family could want. But yes, in an earthquake zone, it ought to be built so as to not kill its inhabitants when the earthquakes come, nor to leave them homeless afterwards. There ought to be easy access to safe drinking water, and a means of safely disposing of human waste. And so forth.

The exact construction details are going to vary from place to place. But if you live or travel in that place (as you would, if you had employees there), you could figure this out fairly readily. If you needed to, you could rely on the ever-useful “what if it were me?” questions. “What kind of housing would I need, if I were one of my workers, and lived in this place?”

And once you know what it is your workers’ wages must pay for, the calculation may be tedious, but it is doable. It is not so difficult to find out what local rents are, and see what sort of housing those rents buy. The amount of rent (or mortgage payment) it takes to inhabit safe, decent housing, that is the amount a living wage needs to cover.

The calculation is the same for the other human needs. How much does it cost to purchase clothing? To buy nutritious foods? For safe transportation?

The living wage is, in this respect, terribly simple. Financial advisors are forever telling people to make a budget for personal expenses; the living wage is the bottom line of an adequate but frugal budget.

This is the kind of the thing the local Better Business Bureau could publish. An accounting firm – the same one that audits your financial statements, for example – easily has the skills to put together such an analysis. Chances are the workers in question have a fairly good idea themselves, too.

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I don’t say that living wage calculations are an exact science; people can reasonably disagree over the precise bottom line. Witness the wide variety of housing that Habitat for Humanity builds around the world. Some of that variation must represent a margin of error, or a range of disagreement, in calculating a living wage. (Or in habitat’s case, what a living wage would buy, if it were paid – Habitat’s clients are the working poor).

But Christianity isn’t a math test. I can’t imagine that on Judgment Day Jesus is going to turn to one business owner and say, “You paid your workers too much! Who needs sneakers when sandals will do?!” and to another, “You paid too little! Anyone born after 1970 was supposed to have air-conditioning!”

On the other hand, it isn’t unreasonable to fear hearing our Savior ask, “What part of ‘the children shouldn’t have to play in untreated sewage’ didn’t you understand?”

The essential thing is that we make the effort required, and make it in good faith. And then that we carry it out. Better to be off by 5%, but to pay the wage, than to not bother in the first place for fear of an honest error.

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This moral burden falls first of all to business owners and managers. In a lesser it way, consumers, too, need to do what they can to support the living wage. The government’s part is to put into place those “structures of justice” that support, rather than undermine, this moral imperative.

Asking “What exactly is a living wage?” is a legitimate question, for those who mean to find, and live out, the answer. A good catholic can have doubts about what role minimum-wage laws should play in it all, or agree to disagree about what sort of meals a worker ought to be able to afford. But the question ought not be used as an excuse for rejecting the moral teaching the church. Rather, because the question can be answered, it behooves us to see it answered and implemented.

The Living Wage: Is something better than nothing? – from my old blog

2nd in the series, again just for background. Originally posted august 18, 2007:

A common justification for not paying workers a living wage goes something like this: “If I didn’t hire these people, they would be unemployed. It is better for them to have something, even if it is not an ideal wage, than to have nothing at all.”

I didn’t see any treatment of the “something is better than nothing” argument in the Catechism; the Church is emphatic about the need to pay workers a living wage. The Catechism does list several factors that employers must take into account when setting wages, and one of those is the “state of the business” (CCC 2434).

There are situations in which the state of the business might not allow employers to pay a living wage. Imagine, for example, if our family farm (previous post) were to suffer a dust bowl or a depression. The farm operates at a loss; even the owners are living on less than they need. Certainly in that scenario, the owners are not guilty of any injustice if they are unable to pay their workers a living wage — they cannot pay themselves a living wage!

But one cannot use the “state of the business” clause to justify paying inadequate wages under “business as usual” conditions. When the farm recovers from this temporary calamity, or the various workers find some other more profitable line of work, it is understood that the return to normalcy includes all workers earning a living wage.

This is a radical way of thinking for corporate America (and corporate elsewhere), where the market price is considered the acceptable wage under all conditions. There are many firms today which are reporting profits to shareholders, and paying sizable salaries to management, but which are not paying all workers a living wage.

The church tells us this is not acceptable. To say that a company which acts this way is “building the economies of the developing world” would be like saying that a parent who indulges himself while feeding his child concentration-camp rations is “helping his child grow”.

I think the Church is asking us to do something that is both radically big and very very small.

To pay a living wage, even if that wage is higher than the going market rate, is a big change. It costs. It means a company cannot rely on the investment capital of those whose idea of “normal” is to pay workers as little as possible in order to maximize profits, no matter how little those wages are. It likely means owners and managers must sacrifice some of their own salary in order to ensure all workers can earn a living.

On the other hand, making sure your workers can have food and shelter and clothing — how much is that too ask? Would you consider it unreasonable to ask your own employer for enough of a salary to provide for your basic needs? The moral mandate of the living wage boils down to common decency.

Under normal business conditions, the “something is better than nothing” argument is deceitful and cruel. It is an excuse to take advantage of other people’s vulnerability and poor bargaining power, in order to grow rich at their expense. Is it hard to pay a living wage? In a time and a place when the wider culture says it is normal not to pay one, yes, it is hard to go against that practice. But it isn’t meant to be. The living wage ought to be business-as-usual.

The Living Wage: An example to illustrate the concept – from my old blog

Originally posted on my old blog, August 8, 2007:

I find it easier to understand economic (and accounting) concepts by beginning with small — though realistic — scenarios. So here I am opening with a possible living wage scenario, but an intentionally uncomplicated one.

Also, I am at this time making no prescriptions. So nobody get huffy and tell me that I don’t understand the implications of minimum wage laws or what is wrong with our welfare system or any of that. If you must know, my personal opinion is that the living wage issue is far more pressing in certain other countries than it is in the United States. We have social justice problems here, of that I am sure. But primarily they are, in my opinion, of a somewhat different (though related) type.

But today, living wage. And just an introduction to what it seems to be about. That’s all. If it isn’t helpful, other people might have something more useful to you elsewhere.

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Imagine you own a farm. Some of your produce directly feeds your family, and then you sell your excess crops to purchase those things you don’t make yourself. In addition to yourself and your family members, you employ some hired hands to assist you in the work. It’s going well — you and your family have all that you need and enjoy a few extras as well. You consider yourself a successful farmer.

Now one of your hired hands is a guy named Bob, and he’s an ordinary local guy, a good enough worker. He does work that you need done around the farm — if Bob didn’t do it, someone else would have to do it instead. Bob works hours that everyone agrees are “full time”.

You pay Bob the going wage. You comply with all the relevant laws regarding his employment. Bob is happy — even grateful– to have the job you give him, for the pay you offer. Part of your view of the success of the farm is having good workers like Bob who are happy to work for you.

Now imagine that Bob, who does all that you expect of him, and who earns a wage that everyone agrees is fair, does not make enough money. The wage you pay him is not enough to pay for Bob’s basic needs. We aren’t saying “Bob can’t afford an MP3 player” or “Bob can’t eat steaks every week”. Bob’s wages force him to choose between, say, owning a pair of socks, or having a bowl of beans and rice for dinner — he can have one or the other, but not both. If he manages to have both, it is by the charity of others.

Furthermore, it is not some extraordinary personal expense that is causing this problem. His counterparts on the other local farms all share his plight. As a result they, like Bob, suffer physical loss — the toll of inadequate nutrition, shelter, clothing, and so forth. Some kind of aid program is required in order to supplement the farm workers’ wages so that their basic needs are met.

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The essence of the catholic social teaching on the living wage is this: You, the farm owner, cannot count yourself as sucessful, if your success depends on someone else’s deprivation.

CCC 2427: “The development of economic activity and growth in production are meant to provide for the needs of human beings”. An economic activity which is pursued without meeting that end simply is not a successful economic activity.

CCC 2434: “Agreement between the parties is not sufficient to justify morally the amount to be received in wages.” The fact that Bob, and his counterparts elsewhere, agree to the wage, does not mean that you, the farm owner are on solid moral ground.

This doesn’t mean you have to run the farm at a loss. CCC 2432: “Those responsible for business enterprises . . . have an obligation to consider the good of persons and not only the increase of profits. Profits are necessary, however. They make possible the investments that ensure the future of a business and they guarantee employment.”

But what it does mean is that you the owner are wrong to be taking home profits for your own consumption, above and beyond your own legitimate needs, if it means leaving your workers to go without basic necessities as a result.

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Catholic social teaching is, therefore, radically different than the going assumption in the wider culture, that if it’s legal and mutually consented to, it is acceptable.

The reality is that inadequate wages cause physical harm. Poor nutrition, exposure to the elements, unclean water supplies, all these things lead to disease and death. So if your profit model depends on some of your workers not being able to afford the essentials of life, your profit model depends on literally harming another person. That’s wrong. Even if your workers live far away, and are used to this suffering, and everyone else in their city suffers the same and always has — no, you may not profit off their willingness to suffer.

And I think that’s about the heart of it.