Progressives, Minimum Wage, and Strategies

I receive regular newsletters from the Christian Alliance for Progress, and I really appreciate that organization for its work to reclaim Christianity from the religious right. Christianity is about moral and ethical values, and about caring for our neighbor, and not about making small numbers of people rich or about right wing politics. None of what I am about to write is intended to put down that particular organization. In fact, I suggest you visit their web site, and let their view of Christianity challenge you.

But Christianity is also not about left wing politics. Christianity can be described as a faith, as a relationship, and as a religion. Following Jesus will certainly have political and social implications. But it is very easy for those on the right, on the left, and even in the center to equate particular political strategies with the fundamental principles of Christianity. Thus right wing politicians today try to use scripture passages favorable to social order and law enforcement as a justification for excessive measures in enforcing immigration, while ignoring other scriptures about helping those less fortunate.

But left wing, or progressive theologians and politicians are by no means immune to this same problem. In my e-mail today from the Christian alliance I am urged to support raising the minimum wage:

The Christian faith is not neutral when it comes to financial matters. There are over 2,000 verses in the Bible that deal with issues of money and wealth, and many of them concern the economic well-being of people at the margins of society. So it is important that in a nation in which more than 200 million of our citizens profess the Christian faith that we who are believers advocate a Christian ethic in the way that we compensate the people at the bottomof the wage scale.

Yet none of those 2,000 verses in the Bible actually advocate a minimum wage. They do advocate economic justice. What progressives often miss is the steps between a good principle and its related goals–economic justice–and the process of both defining those goals in a realistic way and creating a strategy to accomplish those goals. It is a failing of politicians of all stripes to assume that the stated goal of a piece of legislation is what that legislation will actually accomplish.

We have passed repeated laws on drug enforcement, and made our foreign policy hostage to drug policies in other countries even to the extent of invading another country to arrest its president, and yet we still have drugs on the street. As in Vietnam we counted the bodies (or even imagined bodies) of the enemy killed in battle and thus tried to paint a picture of accomplishment, so we now have press conferences in which drug enforcement officials show us the huge amounts of narcotics they have seized. They don’t talk about what’s left behind. Many pieces of legislation that were supposed to make the situation better have been passed, but where are the real results?

We have passed repeated laws on immigration, claiming that they would solve this problem or that, or make things better. But for some reason–generally just because there are employers ready to hire and pay them–people keep coming across the border. The legislation has failed, yet we keep planning to do more of the same.

And that brings me to the minimum wage. I’ve had people tell me that I’m pretty reactionary when I regard it as counterproductive to oppose a Walmart store moving into the neighborhood. The jobs are low wage! Who cares? There’s a comment on one of my earlier posts asking how many employees are going to get $12.00 an hour or better. Not many! But there will be people who were getting less before and are getting something now. That’s why people line up to get the jobs at Walmart–they’re available.

And thus I come to the minimum wage issue. I believe in economic justice. I believe workers should get a fair wage. But my previous two sentences cry out for definition. What is “economic justice?” What is a “fair wage?” The problem is that the legislature can’t create those wages. It doesn’t create jobs. It doesn’t produce any additional money. It merely redistributes it. Now I’m not entirely against redistribution. I think it is quite appropriate that taxes are collected and that they pay for infrastructure.

But every time you try to redistribute through legislation, such as by raising the minimum wage, you need to ask about additional consequences. How will this effect employment generally? Those who think that people would generally rather be unemployed than receive a sub-minimum wage job are generally people who haven’t had to live on very little. What about those forced into a sort of unofficial economy?

The e-mail I received cites the following report: State Minimum Wages and Employment in Small Businesses. It’s interesting to note what is not covered here. What is the economic and population growth rate of those states as opposed to others? In other words, rather than “post hoc ergo propter hoc” what are the combined causes of economic growth in those states with the higher minimum wage? I’m not going to try to do a full analysis of this data, but I’d like to provide a couple of references, first Sense and Nonsense on the Minimum Wage, which deals with data before the above report, though in very similar conditions (1991), and second another report dealing with the number of those who are either not covered by the minimum wage, Below the Minimum Wage, which covers data after that time.

My primary argument here is not against the minimum wage, though I do oppose any minimum wage, but rather simply that Christians can oppose the minimum wage as a strategy while nonetheless supporting Christian principles of economic justice. Believing that we are to take care of the poor and needy does not entail the notion that legislatures can somehow create money.

In conclusion, let me quote Ludwig von Mises, from Human Action (p. 769-770 in my 3rd Revised Edition copy):

The very essence of the interventionist politicians’ wisdom is to raise the price of labor either by government decree or by violent action or the threat of such action on the part of labor unions. To raise wage rates above the height at which the unhampered market would determine them is considered a postulate of the eternal laws of morality as well as indispensable from the economic point of view. Whoever dares to challenge this ethical and economic dogma is scorned both as depraved and ignorant. . . .

The market wage rate tends toward a height at which all those eager to earn wages get jobs and all those eager to employ workers can hire as many as they want. It tends toward the establishement of what is nowadays called full employment. Where there is neither government nor union interference with the labor market, there is only voluntary or catallactic unemployment. But as soon as external pressure and compulsion, be it on the part of the government or on the part of unions, tries to fix wage rates <em at a higher point, institutional unemployment emerges. . . .

I believe the second paragraph and I suffer from the attitude described in the first. I think the greatest economic justice is accomplished through free markets. No, Jesus didn’t teach free markets. He didn’t teach economics at all. But I think his principles will be best implemented through freedom at the governmental level, and through voluntary charity on the personal level.

That’s why, while I am pleased with progressive Christian groups that are trying to reclaim Christianity from the religious right, I also must keep them at arms length. It’s too easy to be harmless as doves while failing to be wise as serpents (Matthew 10:16).