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.