I Cringe When I Hear The Term "living Wage."

[NotreDame]

Notre Dame, I do understand the motivation and thought processes by which one reads such social teachings through conservative blinders... I once engaged in the same kinds of things myself.  But generally any honest reading of these encyclicals cannot sustain the proposition that they're "mostly conservative" in the neoliberal/libertarian/US conservative economic sense...as they are decidedly against such ideas.  Try not to minimize the parts you don't like and maximize the parts you do, and it'll come into clearer focus the things that the Popes are trying to say here.

 

Lol... Aloysius, you have no idea how I'm reading these.  I suppose I might have blinders on, but there's no way for you to know that as of now.  I am trying to read them thoroughly and quite literally. 

 

Perhaps you can give some justification for the following?  Because I don't arrive at the same conclusion. 

"But generally any honest reading of these encyclicals cannot sustain the proposition that they're "mostly conservative" in the neoliberal/libertarian/US conservative economic sense...as they are decidedly against such ideas."

[Aloysius]

I was responding to your statement that it seemed mostly "conservative" to you, which just sounds like something I may have said about it years and years ago when I read some of these things but still wanted to cling to a neoliberal/libertarian/US conservative ideology... people do have a tendency to approach the social teachings of the Church in a way in which they don't consider it something to change them.  I apologize if I presumed too much, likely I was projecting onto you the kind of bias I once tried to twist these things around with... but it was only directed at your statement about what it seemed like "so far".  anyway good luck reading, hope you find them edifying and helpful for understanding the morality surrounding economics :cyclops:

[cmaD2006]

Love it ... Al and ND going at it

 

:popcorn:

[NotreDame]

OK, so then answer the question...  How are the encyclicals against the "neoliberal/libertarian/US conservative ideology"? 

 

It's not apparent to me that they are, but you've twice made the claim. 

[Slappo]

Here's my question to you Aloysius, whose responsibility is it to provide the living wage, and how is that living wage determined?

 

 

Also, here's a series of questions regarding defining the living wage, because honestly, it is pointless to say "living wage" without defining it. Rice and beans are relatively inexpensive, but is it just to assume a family of 6 could subside on sharing 2 bedrooms in a 5 bedroom rental house and live off of rice and beans? What about a family that could subside off of two incomes if the spouse didn't choose to stay at home and homeschool as opposed to sending kids to public school? Should the working husband get paid double so he can support the entire family because they chose that for them subsistence requires homeschooling? Is subsistence relative, and if not, where is the authoritative guidance on what constitutes subsistence?

 

If subsistence is relative, then how can you critique an employer who pays wages based on work, where those wages would be enough for one individual yet not enough for another? A family chooses to have 10 kids, the husband has very little useful skills, and the wife needs to stay at home due to a disability. The husband is willing to work. What employer is supposed to fork out the cash necessary for a living wage where the contribution of the employee does little for the business, and how is that employer supposed to remain in business?

 

What about the person that chooses to take out $250,000 in student loans that don't go away with bankruptcy, fails all his classes with no degree, gets married, has no employable skills but is willing to work, and has 6 kids? Who pays that individual a living wage?

 

My problem with the idea of a living wage is it is such an undefined idea that has a vast social and economical impact, that the teaching becomes practically useless without further definition.

 

 

If it is an employer's responsibility to provide a living wage then the simple solution for an employer would be to only hire single people without debt who have a low cost of living... but then that is unjust as the employer is discriminating. But if the employer hires the other guy, the employer will go out of business and not be able to provide ANYONE a living wage... It's a vicious cycle.

[Pliny]

Great points Slappo.  A "living wage" is almost a meaningless concept.

 

What we need is something a little more substantial than it must provide "subsistence."  And what, exactly, does THAT mean?

A wage is simply a price.  No different than a price on apples or a price on a house.  A fair price is what two parties agree to when they make the exchange.

 

Where there is a relatively free market, there is the best chance to have a "living wage," and no decree is needed from the Church about that, because it happens automatically.

 

 

 

 

[Pliny]

Tom Woods is a Catholic economist and this is from an article he posted on his site:

 

Amazing, but true. Here’s the op-ed. (Thanks to Michael Maresco.)

It’s not totally sound, but at least they understood the problems with the minimum wage. They wonder why liberals still support the minimum wage. For one thing, because they don’t fix it to the cost of living, it gives them an opportunity every X years to make a lot of noise apparently helping the poor.

It also helps unions by pricing lower-skilled workers out of the market. If a union guy gets (say) $22/hr, and it takes three lower-skilled people to do the same work, then at a minimum wage of $6, it pays to hire the three lower-skilled workers ($22 vs. $18). But if the minimum wage is $8, now you should hire the union guy. So imagine that: unions favor the minimum wage for reasons other than love and solidarity.

To find out how wages really rise, listen to this talk.

http://tomwoods.com/blog/new-york-times-in-1987-correct-minimum-wage-is-0/

 

 

I entirely agree that there is injustice in our economic system and that is because it has been corrupted politically by ignorant do-gooders, greedy unions, public sector workers, crony capitalists, policies that put floors or ceilings on prices causing shortages and surpluses, etc. etc., all courtesy of meddlers and opportunists in the government who are sure to pay themselves first and pay themselves well, courtesy of the taxpayers and victims of their schemes.  Looking to the employer for justice is to bark up the wrong tree.  Look at the looters instead, and least of all let's not rely on them to help fix things.  They've done enough.

[Pliny]

I believe I have a copy of the book The Church and the Market: A Catholic Defense of the Free Economy, by Thomas E. Woods.

 

I think it's time to dust it off and actually read it.

 

Here is a excerpt of a review of the book, with some comments relevant to some of the posts here:

 

The Pope assumes that wage rates are set at the discretion of the employer. If the employer pays less than a living wage, he stands subject to ethical judgment.

 

The assumption is false. In a free market, workers earn the value of what they contribute to the product—in technical language, their "marginal value product," discounted for time. Employers who pay less than this will lose their workers to firms that find it profitable to offer better rates. An employer will not pay more than the discounted marginal product because this is all the employee’s labor is worth to him.

 

What then happens when the law or labor union coercion compels employers to raise wages higher than the market rate? Unemployment results: workers whose marginal value products fall below the higher rates will be discharged, or not hired in the first place.

 

Obviously, Woods maintains, the Pope cannot have been aware of these ill effects when he recommended the living wage: he relied in his encyclical on faulty economic theory. To differ with the Pope, then, does not require the Catholic defender of the free market to question the Pope’s moral authority: he need only deny that the Pope’s judgments about economic theory have binding force. In like fashion, believers stand free to make their own evaluations of secular history. The Industrial Revolution, however the Vatican may view it, was a blessing rather than a curse to the European masses.

 

Woods appeals to Pope Leo himself to justify his contention about the limits of papal authority: "If I [Leo XIII] were to pronounce on any single matter of a prevailing economic problem, I should be interfering with the freedom of men to work out their own affairs. Certain cases must be solved in the domain of facts" (p. 4).

 

http://mises.org/misesreview_detail.aspx?control=291

 

 

 

 

 

Edited February 12, 2014 by Pliny

[NotreDame]

For the record, I disagree with Thomas E Woods' commentary on a couple of points, but primarily the following...

 

"The Pope assumes that wage rates are set at the discretion of the employer. If the employer pays less than a living wage, he stands subject to ethical judgment."

 

(Bascially, woods is saying that Leo 13th is assuming that labor demand is inelastic, ie. it won't change based on the wage.)

 

Pope Leo wrote his encyclical in 1892.  It was a time of industrialization and revolution around the world.  Many people were simultaneously displaced from their land and at the mercy of a small number of employers (ie., they couldn't get on the internet and apply around the country.) So were this an "assumption" that Pope Leo makes - and I'm not entirely sure that it is - it would have, in many if not most countries, been true at least for the lower classes.   Places where this was not the case would have been the exception, not the rule.

 

This happened, for example, in Mexico in various phases.  Somewhere around the time they declared independence from spain, tracts of land that were under the control of the local monastery were transferred to private secular individuals.  Land that had previously, for all intensive purposes, belonged to the Indians, was taken away.  The indians were then at the mercy of the local "lord."  It continued and got worse later during the revolution, IIRC when land was given to various commandantes to gain favor and indians were pushed onto sub-par ejido's where they could live and try to farm, but couldn't technically own the land. 

 

Let's also be clear that in this example and I'd imagine in many others (though I'll admit my 19th century european history is sketchy), even though labor demand was somewhat inelastic, these lower classes were in no way victims of a "free market."

 

What I'd really like, though, is for Mortify and Aloysius to follow up on the questions I asked.

[arfink]

Here's my question to you Aloysius, whose responsibility is it to provide the living wage, and how is that living wage determined?

 

 

Also, here's a series of questions regarding defining the living wage, because honestly, it is pointless to say "living wage" without defining it. Rice and beans are relatively inexpensive, but is it just to assume a family of 6 could subside on sharing 2 bedrooms in a 5 bedroom rental house and live off of rice and beans? What about a family that could subside off of two incomes if the spouse didn't choose to stay at home and homeschool as opposed to sending kids to public school? Should the working husband get paid double so he can support the entire family because they chose that for them subsistence requires homeschooling? Is subsistence relative, and if not, where is the authoritative guidance on what constitutes subsistence?

 

If subsistence is relative, then how can you critique an employer who pays wages based on work, where those wages would be enough for one individual yet not enough for another? A family chooses to have 10 kids, the husband has very little useful skills, and the wife needs to stay at home due to a disability. The husband is willing to work. What employer is supposed to fork out the cash necessary for a living wage where the contribution of the employee does little for the business, and how is that employer supposed to remain in business?

 

What about the person that chooses to take out $250,000 in student loans that don't go away with bankruptcy, fails all his classes with no degree, gets married, has no employable skills but is willing to work, and has 6 kids? Who pays that individual a living wage?

 

My problem with the idea of a living wage is it is such an undefined idea that has a vast social and economical impact, that the teaching becomes practically useless without further definition.

 

 

If it is an employer's responsibility to provide a living wage then the simple solution for an employer would be to only hire single people without debt who have a low cost of living... but then that is unjust as the employer is discriminating. But if the employer hires the other guy, the employer will go out of business and not be able to provide ANYONE a living wage... It's a vicious cycle.

 

The living wage is not a meaningless concept. Your examples that you give are what I would largely call corner cases, because you either are positing the example of a highly irresponsible person who happens to also be willing to work or a highly unfortunate person who got very unlucky and is also willing to work. Christian charity does, I think, require us to aid those who get into those situations, but those situations obviously do not apply to the concept of a living wage.

 

Catholic social teaching is really not terribly concerned with who gets the profit at the end of the day, but with human dignity. Profit and private property are not absolute rights. Every man is owed, due to his human nature, the things which he needs to survive. And if a man has children, even if he was irresponsible and had 10, he and his children are also owed what they need to survive. It doesn't matter if the poor man is deserving or not, the preferential option for the poor is not optional.

 

If employers will not bear this burden in exchange for labor, and if we choose not to support this burden by means of our taxes and government intervention, then we as Christians have the responsibility to bear the burden ourselves, directly. Unfortunately I don't see this happening much, and certainly not at the scale we need to ensure that large numbers of people do not go hungry or homeless.

[arfink]

This is not, of course, to say that man should not work for the food he eats. But if he can't work or can't get enough work to feed himself and his family, that is clearly wrong. Saying that the living wage is a meaningless concept because it doesn't have a dollar amount attached to it is like saying that the 10 commandments aren't valid because it doesn't contain the names of the people "thou shalt not kill."

[Pliny]

So Arfink, by saying everyone deserves whatever it is you think they deserve, that by saying so, the wealth appears?

[arfink]

So Arfink, by saying everyone deserves whatever it is you think they deserve, that by saying so, the wealth appears?

 

I'm not sure what you're trying to say because sentence structure. Come again?
 

[NotreDame]

Arfink,  I have to agree with the spirit of Pliny's reply here... The "living wage" might not be a "meaningless concept", but your reply has failed to shed any light on what it's meaning is.

 

Also, as an aside... I'm not sure your view of private property is aligned with the encyclicals I'm reading from Pope Leo XIII and JPII.  Have you read those lately?   Pope Leo says in only the 6th paragraph:

 

For, every man has by nature the right to possess property as his own.

 

This directly contradicts what you said was catholic teaching and it's reiterated by JPII in both his encyclicals.

[Slappo]

The living wage is not a meaningless concept. Your examples that you give are what I would largely call corner cases, because you either are positing the example of a highly irresponsible person who happens to also be willing to work or a highly unfortunate person who got very unlucky and is also willing to work. Christian charity does, I think, require us to aid those who get into those situations, but those situations obviously do not apply to the concept of a living wage.

Why don't they apply to the concept of a living wage? Those people still need food and shelter, and so do their kids? I'd love to say they are entirely unique circumstances, but look at reality. Look at the people with various mixtures of massive credit card debt, student loans they can't pay, and a house mortgage that just got foreclosed on making them homeless. Due to the poor choices these individuals have made, they require more money to live on because wages are garnished to pay debts or interest rates are higher due to bad credit/bankruptcy.

 

 

 

 

As to the parts of your post I didn't quote: Why would a for profit employer bear this burden, and how is taking money someone else has rightfully earned to distribute it to those who have made poor choices just (in the example of those in high debt, not those who don't have employable skills).