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.
***
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.
***
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.