The Worker Deserves His Wage
Since we’ve established that the state can intervene in the economy in order to promote the common good, the next question is, what is the teaching of the Church regarding the wages of workers? First, the Church observes biblical admonitions such as Deuteronomy 24:15:
In view of this passage and others, such as James 5:4, the Church has taught that depriving a worker of his just wages, whether by withholding them or failing to pay a just wage, is gravely sinful (CCC 2434), and in fact has called it one of the four “sins that cry to heaven for vengeance.” This is the case, as Leo XIII wrote, because “the laboring man is, as a rule, weak and unprotected, and because his slender means should in proportion to their scantiness be accounted sacred” (RN 20).
What Is a Just Wage?
But how are we to determine the “just” wage? For economists, wages are the price that an employer must pay to obtain the labor of his employees. This price must be sufficient to overcome the “disutility” of labor (the human inertia tending against labor that must be overcome by sufficient motivation), and must take into account the relative ease or difficulty of the labor involved, as well as the relative abundance or scarcity of people in the labor pool who can perform the required work. Because of these factors, wages are, to a certain extent, governed by the same market factors that influence the price of goods.
Entirely false is the principle, widely propagated today, that the worth of labor and therefore the return to be made for it, should equal the entire value added. Thus the right to the full product of his toil is claimed for the wage earner. How erroneous this is appears from what we have written above concerning capital and labor (68).
The Family Wage
Since Rerum Novarum, the Church has fervently held that the basis of determining a just wage should be the concept of the “family wage.” The family wage is one sufficient for a working man to support himself, his wife, and his children. While the Church acknowledges that all members of the family have a contribution to make to the well-being of the family, she nonetheless insists that the norm of stable family life is founded upon there being one principal breadwinner for the family, the father; as Pius XI wrote: “Every effort must therefore be made that fathers of families receive a wage large enough to meet ordinary family needs adequately” (QA 71). John Paul II also advocated the family wage, seeing it as a protection against treating human beings themselves as a commodity, to be evaluated solely on the basis of their productive potential.
Is a Minimum Wage the Solution?
The effect of Catholic social teaching, the growing awareness of a need to protect workers against exploitation, and the rise of the social gospel movement among Protestants in the 1920s all contributed to the adoption of minimum wage laws. While many welcomed these laws as part of the effort to protect and lift up the condition of workers, there were nonetheless many Catholic scholars and bishops who were skeptical of or even opposed to such measures. The first minimum wage law in the United States was enacted in 1938, as part of President Franklin D. Roosevelt’s New Deal programs. Since then, the minimum wage has risen from the initial $0.25 per hour to $6.55 per hour.
Handle with Caution
There is a tension, then, between the necessity of providing just wages and the need to allow the fullest access to employment possible. Minimum wage laws can be seen as promoting the first objective but hindering the second. The prudent legislator must try to find a course that will not create evils worse than those he seeks to eliminate, and most would agree that being unemployed with no income is worse than being employed for a sub-optimal income. However, the effect of a minimum wage is largely dependent on where it is set. Fortunately, in the United States, the minimum wage is low enough, in comparison to prevailing wages in most localities (which are largely the result of market forces), that in all likelihood it is not now a significant source of unemployment. For example, in my own community, entry-level jobs in the fast-food industry, which are generally considered low-skill, pay between $8 and $9 per hour, more than 50 percent higher than the minimum wage. Where the prevailing wage is so much higher than the legal minimum, the minimum wage will serve mainly to prevent gross exploitation of workers.