The Washington Post reminds us today that the base pay for members of Congress has increased $28,300 a year since the last time the minimum hourly wage for America’s lowest paid workers was adjusted. An additional $3,300 increase for members of Congress is on track for passage in the House of Representatives later this year.
Asked if he would allow a minimum-wage proposal to reach the House floor Majority Leader John Boehner said, "Probably not."
Since 1998, the Senate has rejected proposals to raise the federal minimum wage 11 times.
Earnings for fully-employed minimum-wage workers are $10,700 a year.
□ Fair
□ Not Fair
Pick one.
Comments (9)
If I have to pick…
If I have to pick one, I’ll pick "Fair", but I’d really rather pick "Irrelevant".
I certainly don’t support these ever-increasing wages for Congresspersons; I’d much rather they have a hard Constitutional limit like in New Hampshire (whose legislators only make $200 per 2-year term, since 1784). But I don’t see how that’s a related issue at all. Congressional wages are drawn directly on the treasury, taken from our taxes; minimum wage increases are a price floor on wage labor that must be paid out by employers directly.
But minimum wages are bad economics, as are all price floors and ceilings. Instead of correcting a market failure, all they do is create a distortion in the market for whatever they’re capping. And in the case of minimum wage, this has a very real human cost. The people who will be affected the most by a rise in minimum wage will be those very people who have a hard time getting and holding onto a job to begin with. What employer will pay $6/hr for an employee who is only worth $3/hr? If there were no minimum wage, those folks would at least have a job and a *chance* to advance. As it stands, they have none.
I encourage you to take a look at Hans Sennholz’s article on the minimum wage that was published today:
http://www.mises.org/story/2229
You can find another one with more concrete data here:
http://www.mises.org/story/2130
Fair Wage
I agree with your point that drawing a direct parallel between tax funded congressional salaries and employer funded minimum wages is a false comparison.
But I don’t think the biblical view of labor coincides with a free market view in every respect. Hence arguments about the "fairness" of a minimum wage should be examined in the context of a mixture of both charity and market forces.
There was an interesting glimpse in the book of Ruth of such a perspective. A wealthy business man (by the standards of his day) made a practice of letting poor people work for "wages" (measured in grain) far in excess of what he could have paid them for the work. His intent was to preserve the dignity of the poor workers, giving them both honest labor to do (no free hand-outs here) and a reasonable subsistence. For this, the businessman is described as "righteous". (I think the term "righteous" has taken on new meanings of late… but that’s another blog.)
I think tried to capture the same kind of ideal through our minimum wage laws. But just looking at the "righteousness" issue, the perverse result is that by legislating mandatory wages, Congress has reduced any such noble impulse on the part of business owners to slavish compliance with the law. Congressmen get all the credit for noble impulses, and business owners are stuck with full compliance or being found criminals or just not hiring people.
In short, Congress should have let offering higher than avegage wages be voluntary on the part of businessmen, not mandate it.
Fair / Not Fair
I would like to "jump in" with my "two cents worth". I certainly appreciate Daniel’s comments . . . they add a dimension and depth that was not in the article. And I would have to agree - to a certain degree - with his pick of "Irrelevant". My response to the article itself - and Daniel’s response - is that there is not any real foundation for someone to respond to other than the article and the issue that triggered the article. It seems to me that the REAL issue in "Fair / Not Fair" is the biblical worldview for evaluating the issue at hand. The Bible says that a laborer has value . . . and it should be a fair value. So then, what is the scriptural concept of "fair" in that context? Is it enough in the way of wages to "live on" . . . or does it include enough to create some savings for a "rainy day" . . . or does it include that AND even more so that a person could purchase some "luxury" items . . . and what about the dignity, significance and worth of the individual in the work environment. Then there is the employers perspective of the value of the work that is being performed. The difficulty I see here is that if we begin to debate on the issues without the biblical perspective then the debate will evolve into one person’s opinion verses another person’s opinion. Both Jim and Daniel have good thoughts that merit attention. Now I do not dislike a good debate . . . but I would like to see it kept around the Scriptures and their percieved application to the issue. And this is an important one! We in the marketplace need to develop a biblical foundation for the way we value work and pay employees/staff for that work. Thoughts . . . with scriptural context?
Relevance
Thanks for your thoughtful responses Daniel, Geoff and Al. I didn’t know that about New Hampshire.
Cutting to the chase, I can say with fair certainty that bonded labor is good economics, where "good" is defined as maximizing direct return on investment.
I’ve had the fortune to see bonded labor in operation and, while it appeared inefficient, the creditors seemed like patient money. The hidden elegance of bonded labor is that, unlike slavery, the creditor is not responsible for room and board. And, since bonded labor tends to be a localized practice, should the laborer seek other employment, the creditor can generally acquire the services of a sibling or some other close relative, set the meter back to zero and start over.
My worldview — cobbled together from my perceptions of the biblical narrative and the Business Life as-I-experience-it, includes space for fairness, courtesy, chauvinism, selfishness, generosity, villainy, opportunity, accountability, failure and do-overs. I resist the notion of an employee being "worth $3/hr" as vigorously as I doubt any hedge fund manager is "worth" half a billion dollars a year. My notion of human worth has to do with bearing the image of our creator who promises wholeness in the kingdom of heaven. If anything is irrelevant, it’s assigning dollar equivalents to people’s "worth." But I doubt that’s what you meant to do.
It’s this kingdom of heaven thread that has captured my attention — and that of a good many of us in the InsideWork tribe. For all the complexities of business and spirituality, it’s not difficult to find in the biblical text solid, elegant calls to act justly, love mercy and practice humility.
As long as there are people willing to take direct and knowing advantage of others, I will insist with the founders on a government charged with promoting the general welfare for every citizen from Warren Buffet to the fully employed workers my wife met at the soup kitchen – accepting the kind indignity of a free lunch in the church basement because $10,000 a year doesn’t go as far as it used to.
And I repeatedly test my worldview against as many sources as I can muster.
On a lighter note, the second of 12 articles proposed by the First Congress in September, 1789 read: " No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened." It’s not hard to see why those in the First Congress thought it would be good for elected representatives to wait for payday.
The rest of the story is, that article was ratified as the 27th Amendment to the Constitution — in May, 1992 — just 203 years later.
I’ll revisit the passage in the book of Ruth. And I’ll read the Sennholz and MacKenzie pieces; thanks for the links.
Scriptural support
Jim,
I certainly didn’t mean that the employee was worth "$3/hr" as a human being. What I meant was that his labor would only produce $3/hr worth of value to the company. Employees are not slaves to be bought and sold - they are merchants, selling their services.
If you would like a biblical basis for opposing legislated minimum wage, I think you need look no further than Jesus’s parable of the workers in the vineyard in Matthew 20. When the workers complain of unfairness in their wages, the landowner protests: "Is it not lawful for me to do what I will with mine own?"
Clearly, the primary thrust of this parable is not about employer-employee relationships, but about the relationship between men and God. But for the parable to make sense, Jesus must endorse private property: the landowner’s property is his to dispose of as he will, and he is not *legally* obligated to give money than he has agreed to; just as God is not obligated to give more or less (or any) salvation to particular men. Wages should be negotiated voluntarily by peaceful parties; one side in any such negotiation should never be given an upper hand through force.
And I would also like to echo Geoff’s point, that legislated charity deprives us of the ability to be truly charitable. It is no longer charity at all when one is forced to give; virtue must be voluntary in order to have any meaning in this or any other world.
Fair/Not Fair
I agree with Daniel’s comments of 6/27. I think that congressional pay should be scaled way back and no increases allowed larger than a small cost of living increase once every 5 years.
Is it for the oxen
Has no one read First Corinthians 9 about Apostle Paul’s minimum wage doctrine? Please see critically emphasized that its no mere human wisdom or "common sense" for workers to be paid above subsistence, but surprisingly, its a Mosaic law. Further, at Corinth is the same author of Romans 13 where government origins (with its burden of laws) are ascribed to above rather than below.
And insomuch as Paul rates as normal, workers traveling with a believing wife (herself and their children as dependents arguably) its hardly some kind of "bonded" wage he feels biblically entitled to.
Is it only apostles that the Holy Spirit has generous wages in mind for? What could be more spiritual than an entry-level worker performing his assigned tasks? Can Believers be more spiritual than to be found gainfully employed? Even novice readers can discern what God the HS has in mind when he uses Paul’s circumstances to establish in public domain scripture, a nascent doctrine of abounding minimum wages, justified perforce by law.
And more practical, minimum wage laws, are they not maximum profit laws?
I am reminded of Quaker President Hoover who, in the throes of his stagnant administration remarked about inefficient auto workers being displaced to more productive vocations, like selling apples on the street corner.
Minimum wage laws pull up the bottom and guarantee demand for consumer goods that I believe, in God’s wisdom, return these wages as consumer sales to the winners and owners of production; who are in the end, by their obedience to government, the better regarded among us. The Spiritual Capitalist has the long view in mind, I think.
After all they make movies even today, 60 years dead, about Roosevelt in a wheelchair, not about Hoover with his smart Alec mouth. "Every vine that beareth fruit my heavenly Father pruneth." By government, God’s plan is to always "punish" success with taxes, minimum wage laws among them. The clever businessman secretly welcomes this "punishment", knowing in the long view, it will only make business operations stronger and his workplace production demands wholly respected.
But that takes Bonhoeffer’s kind of this-worldliness faith. Seeing government and taxes and bureaucracy as God’s inefficiently secret way to bless the socks off us.
Look at the whole picture…
Center for Legal History Wrote:
"I am reminded of Quaker President Hoover who, in the throes of his stagnant administration remarked about inefficient auto workers being displaced to more productive vocations, like selling apples on the street corner."
I’ve got a few comments on your analysis here. First off, while I’m certain that there were some "displaced" workers who were unable or unwilling to train for and take more productive jobs, I am certain that this was not the majority. Most people eventually were able to retrain and take other positions doing either something similar or something different.
But, even if you were right, and that everybody who used to make cars now does something only minimally productive, you aren’t looking at the whole picture. You are only looking at one player — the one that lost — and ignoring the vast numbers that benefitted.
Yes, many people lost their jobs. Other people got new/more/"better" jobs. After all, the machines that were bought to replace the people… first, they had to be designed (by people), and then built (by people), and then installed (by people), and then overseen (by people), periodically repaired (by people), and eventually replaced with newer, better equipment (which went through a similar process).
Then, you have the owners of the car company. (No, I don’t mean the CEO or President — though they benefitted too), I mean the millions of stock holders who all saw their stock appreciate. Many, many people owned auto-maker stock. All these people were all able to reap the benefits of this increased efficiency.
But then, the people who now have more money because the stock price increased… many of them spent the money — thus gaining a good or service of value to them while simultaneously giving more money to a whole host of other people.
Some people may have used their investment returns to buy things like vacations (good for people who work at or own hotels, restaurants, airlines, travel agencies, …) Some people invested the proceeds in other companies, providing additional income for them while also providing capital for other entrepreneurs who were trying to grow their businesses. Some people probably spent their money on new cars, new houses, all sorts of things. Others spent on simple things… food, clothing, bills. And some of the money was paid in taxes, allowing the government to spend money on all its various programs (beneficial or otherwise).
And that’s only following one or two chains across one or two steps.
What about all the people who needed cars, and were able, now, to get better cars for a lower price — all because the companies had found less-expensive ways to make cars? What do they now do instead with the money that they otherwise would have needed to pay for a car that was built by hand?
Some people benefitted, others did not. On the whole, there was more gain than loss.
And many, probably most, though not all, of the old auto workers were able to retrain themselves to do other productive work — work that couldn’t have been done before, because they were too busy building cars.
You must always look at the whole picture — tracing everything back as far as you can — to see what the true effects of change are.
Its for the oxen
To my learned and scripturally versed colleague and brother at Center for Legal History…
You raise many interesting issues, and especially, what a delightful insight on I Cor 9!
I submit, with great affection, that the passage had more to do with whether or not ministers of the gospel have a right to have their needs met while ministering the gospel (Paul answers a resounding YES).
It speaks to the question of full-time vs. part-time ministers.
The reference to taking wives along (while certainly costing more than travelling solo — two can live as cheaply as one half as long!) might be making the point, I think, that even full fledged apostles were not required to be celibate, as Paul himself was), and were entitled to make not only a living from their ministry activity, but also entitled to all the comforts of family life.
Thus, I did not take the passage to suggest some minimum wage for all workers, rather, that one particular class of workers — ministers of the gospel — are doing honorable work and entitled to have their normal human needs met while doing so.
The reference to the Old Testament concept of a paid priesthood supports that idea.
Your observations on Hoover are also worth commenting on. More later perhaps… Thanks so much for your comments. Good food for thought.