Inequality: Can't Live With It, Can't Live Without It

Tuesday, July 13, AD 2010

In my last post I looked at the question of how to calculate the just or living wage, using figures from Father Ryan’s classic text A Living Wage brought up to date by adjusting for inflation. Commenter Restrained Radical, however, thinks that in merely adjusting for inflation I was being too stingy:

Adjusting for inflation isn’t necessary the best way to adjust Fr. Ryan’s figures. Real GDP per capita grew faster than inflation. In other words, Americans got wealthier. Using Fr. Ryan’s figures today adjusted for inflation would be appropriate if real GDP per capita was stagnate for 89 years. In 1919, GDP per capita was $805. If you only adjust for inflation, that would be $9,897 today. That’s somewhere between Cuba and South Africa. So $6.15/hour would be an appropriate living wage for a family of 5, in Cuba.

If instead we adjust for unskilled labor wage increase (4.24% annualized since 1919), $1,400 to $1,500 then would be $56,388 to $60,416. That’s probably closer to what Fr. Ryan had in mind.

In 2008, median household income in the United States was $52,029. If Restrained Radical’s interpretation is correct, then it would seem Father Ryan was advocating a kind of Lake Wobegon society, where everyone has the right to an above average income.

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0 Responses to Inequality: Can't Live With It, Can't Live Without It

  • Many countries use some percentage of median household income as a measure of poverty. That’s workable but arriving at an appropriate percentage is difficult. Ideally, we’d ask everyone, “Assuming you have no assets and receive no government assistance, at what income level would you consider yourself poor?” Then adjust for geography, household size, assets, and maybe age to determine who to help.

  • LOL. I’ve known people who had next to nothing and would never consider themselves poor, and I’ve known people who consider themselves in horrible financial distress because they cannot pay private college tuition. I really doubt that there is any practical room for subjectivity in the analysis.

    I think the real point of Blackadder’s cogent essay is that there is a difference between attacking income inequality as such versus attacking poverty. There is a far greater political consensus in favor of the latter than former, and it is exceedingly difficult to attack the former without making making the latter problem worse.

    I have often proposed this simple thought experiment. Posit a world with three families, the Kings, the Queens, and the Princes: This world can organize itself into two different societies with two different outcomes. Assume the rules of neither society involve slavery, coersion, dishonesty or other intrinsic evil. In the first society the standard of living outcome is Kings 100, the Queens 15, and the Princes 10. In the second society the standard of living outcome is 5 for each family. Which society is preferable? In my experience the responses are revealing.

  • I’ve known people who had next to nothing and would never consider themselves poor, and I’ve known people who consider themselves in horrible financial distress because they cannot pay private college tuition. I really doubt that there is any practical room for subjectivity in the analysis.

    So very true Mike. It was a heartening thing to hear my kids talk about helping the poor, especially when we would drop off bags of clothes and toys at St Vincent de Paul. However, they never made any connection to our shopping there.

    Really, our nation is probably too wealthy for its own good. As Catholics we customarily say grace before meals. It’s a good and an ancient practice. Gratitude for life and every little blessing *should* permeate our souls. I fail at it and I’m confident others do too, though how wrong headed is it of us as a society to not only be ungrateful for things like food, clothing and shelter – presuming their existence and availability – and then debating whether a cell phone is a real necessity. We can’t even be grateful for little technological gadgets in their own context. We assume they are core to our existence. We are so friggin’ spoiled…

  • One small additional note.

    Please keep in mind that income and wealth are not the same thing; and that income and productivity aren’t quite the same thing although they’re more closely related than income and wealth.

    At one point Restrained Radical said, “Real GDP per capita grew faster than inflation. In other words, Americans got wealthier.” This is not quite right; Americans started producing more, and presumably their income increased by some amount also although it needn’t be exactly proportional. And if their cost of living didn’t increase at the same rate as their income, then their wealth increased, in proportion to the degree that their disposable income was disposed in liquid or illiquid forms.

    Anyhow, a failure to appreciate these distinctions can lead to distortions in the conversation about “living wage.” A person with zero income can live quite nicely — ask Teresa Heinz Kerry, for example; at the time of the 2004 elections she’d been able to report tiny income and no “wages” for several years running — if they have sufficient liquid wealth to live off of.

    Indeed, the term “living wage” itself contains the distortion to some degree by focusing on “wage” rather than something like “wage plus net wealth divided by remaining life expectancy.” (Not exactly a phrase which rolls trippingly off the tongue!)

    Of course, the difference between one region’s cost of living, and another’s, comes into play. And there is the problem of determining what, exactly, constitutes the “living” of which one is measuring the cost, and how accurately one can gather information about wealth and income.

    In the end, the topic is sufficiently complex that subsidiarity comes into play: It is better that people closer to the problem (and, especially, people not insulated from the consequences of the policy decisions they make) be the ones who make policy on such issues. And it is preferable that their policy affect only a small group of persons on the same “level” of organization as they, but that they be free to observe the consequences of alternative policies on other peer groups implementing those policies, allowing all groups on a given level to make informed decisions about which policy is best. This, of course, was the fundamental truth (and thus, the Catholic truth) behind American Federalism…back when it still existed in a robust way.

    It is because of this subsidiarist logic that I am nearly libertarian about federal policy, a mainline conservative about state policy, a moderate or centrist about county-level or metropolitan-area-level policy, a mild authoritarian about township- or neighborhood-level policy, and a benign but occasionally totalitarian divine-right monarch within the bounds of my household.

    But I am digressing. My main point is: The topic is complicated enough as it is. Subsidiarity helps with that at a systemic level; but in the meantime, watch out you don’t make it more complicated by conflating productivity with income or income with wealth.

  • “You will always have the poor among you.”

    – God

    Smart post, BA.

  • RC, you’re right which is why consumption may be a better measure of poverty than income. Though, with the poor, the two are usually fairly closely correlated.

    Re subsidiarity: I’d agree to the extent that local government can and does fulfill its obligations. Many towns cannot or will not either because they don’t have the finances or they don’t have the political will. That doesn’t automatically mean that welfare should be a federal program but it does mean that the federal government needs to play a role.

  • I know people who have excess wealth, and it can almost be a curse at times. Their lives become so occupied with money.

    There should reasonable help from the state/federal governments for people who need assitance, like housing, food, etc. But, charaties for instance, do a lot of good, our parish is always helping the poor. Helping poor people should not be solely a government issue…if you want a healthy society.

  • In any event, government at whatever level should supplement, not displace, private charity.

    Otherwise it is another instance of “bad money crowds out good money”; with the problem of neediness in no way helped, but with good and morality-reinforcing means replaced by questionable and corruptive means.

    Sadly, I believe that government assistance to the needy does, in fact, crowd out private assistance, at very nearly a one-to-one proportion when exercised at the federal level. I suspect that proportion improves at the lowest levels, when the folk being helped can personally meet on the streets the persons who are helping them.

    If I am right about that, then having the federal government get involved when there is a failure of local government provision (which failure itself should only occur when there is a failure of local private provision) is counterproductive: It crowds out not only the remaining good local private money and any possibility of private money from adjacent communities, but also crowding out local government money, which is the least-corruptive type. As with nearly every other occasion when government acts outside its core mission, it fails to solve the problem while creating new ones.

    That, of course, is a generalization. But it’s the kind of generalization which makes the safest starting-point for the consideration of policy.

  • Jasper:

    You state: “Helping poor people should not be solely a government issue…if you want a healthy society.”

    Exactly.

    Or, well, no, I take that back. What you said is a very good start, but it could be amplified, and the principle clarified, as follows:

    If you want a healthy society, helping needy people is not primarily or even secondarily a government issue.

    It is primarily an issue to be addressed by those who know the needy person in question, including their church.

    It is secondly an issue to be addressed by their local community government, as a source of assistance to their family, friends, and church.

    It is thirdly an issue to be addressed by the government of the county or metropolitan area in which they reside (providing backup assistance to family, friends, church, and community)…in the minority of cases that the problem wasn’t adequately handled at the community level or lower.

    It is fourthly an issue to be addressed by the state in which they reside (providing a tiny additional layer of backup to the family, friends, church, community, and county/metro area)…in the rare cases it couldn’t be handled at the county/metro-area level or lower.

    It is, fifth and least importantly, and with the least burden and the least control, a responsibility of the federal government to provide some additional assistance, should all the other levels of assistance somehow, in very rare cases, fail to get the job done.

    Over the course of fifty years, if one were to keep track of all charitable handouts given in a particular neighborhood, one ought to find that fully half of the assistance was provided by friends and family and church; another 25% by the community, another 10% from the county or metro-area, another 6% from the state, and the last 4% from the federal government. Or some such numbers, anyway: Those precise numbers would vary, but I offer them in order to exhibit the general principle.

  • Sadly, I believe that government assistance to the needy does, in fact, crowd out private assistance, at very nearly a one-to-one proportion when exercised at the federal level. I suspect that proportion improves at the lowest levels, when the folk being helped can personally meet on the streets the persons who are helping them.

    If government ceased all assistance, private assistance isn’t going to pick up anywhere near 100% of the tab. You may get a better ratio at the community level, but I don’t think there will be much difference between higher levels of government. Given the same rights and obligations, a state as large and diverse as California won’t act very differently from the federal government.

    Is it more in keeping with subsidiarity for private institutions to ration goods and services or to provide cash and leave the allocation decisions to the individuals and families? Is it better to give someone a can of corn or to give him a food stamp to buy whatever food he needs? I think it’s clearly the latter. Private institutions are well suited to offer goods that people want to get rid of (second-hand goods and surplus goods). They’re also good at providing services run by volunteers. But cash assistance is preferable to the provisioning of marketable goods and services.

    If we’re giving the poor cash, the cheapest cost avoider when determining who needs cash and how much is the entity that has access to income, asset, and consumption records which is always the government (usually the state is the lowest capable level in this regard though even the state would probably need higher level cooperation to keep track of interstate commerce). That still doesn’t necessarily mean the government needs to be the distributor. I suppose private institutions can hand out checks if the governments makes its records available to private institutions but then there’s the privacy concern. On the one hand, we may not want to disclose such information. On the other hand, the shame may incentivize the poor to work their way out of poverty. If privacy, is a concern, the government should also be the distributor of financial assistance.

  • RR:

    Oh, I don’t doubt that there are obvious advantages to using government; e.g., that they know about people’s incomes.

    And, in fact, if one is using government to centralize the collection on voluntary donations, which are then turned over to the poor under the banner of “the generosity of your fellow citizens,” then some of my concerns go away.

    But government usually does not collect voluntary donations; it levies taxes. It does not grant unexpected gifts identified as the extraordinary kindness of other persons; it allows persons to claim their “entitlements” from a government controlled by the politicians for whom they may later vote.

    This has an altogether different “vibe” from the anonymous contribution slipped under the door by a neighbor.

    A person who gives voluntarily increases in charity and grace and magnanimity in the process; he learns to love. A person from whom his daughter’s potential college savings are taken by a guy for whom he didn’t vote learns no love in the process.

    The charity worker who collects voluntary donations sees the goodness of human beings reflected in every dollar. The taxman sees that human beings will do pretty much what you tell them to do, when you point a gun at them.

    The charity organization is founded by people on a mission to love others, whose message to potential donors awakens the donors’ consciences. The government is filled with politicians who see political advantage whenever they can wring money from people who won’t vote for them anyway, and send it to their home constituents in order to purchase their immediate gratitude and their eventual re-election vote.

    The recipients of voluntary charity learn humility and gratitude and the fact that their fellow men aren’t all bad…and if that charity comes through a church ministry, they learn on a visceral level to associate provision with the body of Christ. The recipients of “entitlements” learn that if you vote for the right guy, that guy will take a nightstick to some people you don’t know, and you can get those people’s money. They also often learn that it’s other people’s responsibility to subsidize their bad decisions, and that when they’re in need, it’s because the world owes them and isn’t paying up like it ought. And they often lose self-respect while not learning humility, because leeching off others is very different from benefiting from the generosity of others.

    In countries where the Church is the primary or only source of assistance, the Church is therefore central in the life of the community, and everyone can think of a time when they, or a relative, owed much to Christians. In countries where the state is presumed responsible for most or all assistance to the poor, the Church is an inexplicable and irrelevant sidecar to society with no obvious purpose or role.

    So I think that one of the problems when government gets too involved in this stuff is that it’s bad for the soul of the taxpayer, bad for the soul of the taxman, bad for the soul of the politician who organizes all of it, bad for the soul of the guy who voted him in, bad for the soul of the recipient, and tends to undermine the Church’s rightful position in society, which is bad for society in the long term.

    Whatever the advantages of government knowing people’s incomes, then, I think these disadvantages probably outweigh them.

    And, really, if I had a choice between a private firm (required by law to respect my privacy) knowing my income, and the government (required by law to respect my privacy) knowing my income, I might be happier with the private firm. After all, if they decide to violate my privacy, I can sue the pants off them. Their deep pockets might make it difficult, but those same deep pockets might bring me a lot of relief, if I win.

    But suing the government can be trickier, if they decide to change the law in a way that violates my privacy: Sovereign immunity may apply. Bringing a lawsuit over the content of the laws against the guys who make the laws is rather like assaulting a mental hospital with some bananas and a package of mixed nuts.

0 Responses to Just How Much Is a Just Wage?

  • These are interesting formulations to find out what a just wage might be today.

    But, one would have to add in the college expense factor for today’s times. In Father John Ryan’s time it was not a necessity for people to attend college or a trade school to earn a decent living wage. Now attendance at either college or trade school is a necessity and the sum per month that one pays for their loans can be quite high.

    I will be checking into Father Ryan’s book soon.

  • Father John Ryan’s time it was not a necessity for people to attend college or a trade school to earn a decent living wage. Now attendance at either college or trade school is a necessity.

    I’m pretty sure you don’t need a college education to earn $6.15 an hour.

  • Even if a single person lived on $6.15 an hour that wage would be very hard to meet all the necessities of life nowadays. With this low wage a single person and especially a family would need government help. While help from the government is one thing for a temporary period of time, I don’t think that $6.15 per hour would be considered a fair wage to live on especially when it seems evident that one would need permanent assistance from the government if the person/family tried living on $6.15 per hour. This seems more like a college student’s wage or a teenager who lives at home with his parents.

    If a family meets the minimum cost of living in a given country is that really acceptable according to Catholic Social teaching?

  • Interesting– federal minimum wage is over a dollar more than that.

  • I haven’t read or even heard of Father Ryan’s book before, but it’s interesting that he actually made an effort to define how much a living wage was. It’s also interesting that his calculations, even when adjusted for inflation, still come out well below the current federal minimum wage. Also, his hourly figures are somewhat skewed by the fact that the average work week was considerably longer in his time (48-60 hours, as opposed to 40 today), meaning the baseline annual wage figure was being spread out over more hours.

    I don’t know how he arrived at his figures for 1919 but I’m guessing they probably did NOT include the cost of owning an automobile, since that was not yet considered a “necessity” for most people, especially in cities where public transportation via streetcars and trains was readily available. If he included electric and telephone service in his estimates (those would have been available in urban areas but many rural areas lacked those services well into the ’20s and ’30s), well, that would have been for a very rudimentary level of service — just a few lights and maybe one party-line phone line — nowhere near what most households require today for appliances and electronics. The main household heating fuels at the time would have been coal or wood, and I’m not sure how those costs would compare to heating oil or natural gas today.

    In general I think a living wage should be paid for all full-time jobs that require education or training beyond high school. But, did Father Ryan ever tackle the question of whether unskilled entry-level jobs that were usually performed by children, teenagers, or housewives simply to supplement their family income, or provide pocket money for themselves since they did not have to support themselves, also required a living wage? If it were morally obligatory to pay the kid who mows your grass every week or the girl who babysits your kids while you go to a movie a “living wage,” very few people would be able to afford such services, and young people would lose the opportunity to gain valuable experience in handling their own money.

  • One of the significant differences between today and 1900 is housing expense. In 1900, I’ve seen figures between $400 and $4000 for housing. If we take a 1/3 of your proposed living wage today for housing, we end up with ~$400 to go towards housing for 5 people. Using the federal poverty guideline, you end up with $700/m. There are quite a few places in the country where you will have extreme difficulty finding housing with that budget.

  • Not sure how accurate this is, but this site has a “time capsule” for 1918.
    Price of a Gallon of Milk $.55 (9.32, modern)
    Price of a Loaf of Bread $.10 (1.41, modern)

    Milk is artificially controlled, but even the most fancy-smancy organic stuff in glass bottle is maybe six bucks a gallon. I don’t know what the bread they had looked like, but bargain loafs can be gotten for .99c (those ones with the roman on the emblem?) and up to about six bucks for the fancy ones.

    It also says the cost of a home was 4,821.00, which would be $68,102.96 in modern costs; There are houses at that price…. (Chose Spokane because they’re in neither a boom nor a bust.)

  • They didn’t have all the non-wage employment costs back then, either, did they? I know the shorthand formula I’ve been told for small businesses is figure hiring someone will cost half again their salary. (One of those radio finance shows where folks call in, so who knows.)

  • One of the significant differences between today and 1900 is housing expense. In 1900, I’ve seen figures between $400 and $4000 for housing.

    If you look at an inflation-adjusted Case-Shiller, it looks like real housing prices were only a little higher in 2000 than they would have been in 1900, though there were some sizable swings in the middle (and of course average house size has more than doubled over the period).

  • Even if a single person lived on $6.15 an hour that wage would be very hard to meet all the necessities of life nowadays.

    No doubt what Father Ryan (and others writing at the time) would have considered a normal and sufficient standard of living would now be considered intolerable poverty. Standards for what is sufficient seem to be a bit like our shadow; as we move forward it follows right along behind us. Which suggests that it may not be even possible to have a society where everyone receives a “living wage.”

  • “I don’t know what the bread they had looked like”

    In 1919 it still came in solid loaves that purchasers had to slice themselves. Pre-sliced bread was first marketed in the late 1920s, and was such a popular innovation that it prompted the expression “the greatest thing since sliced bread.”

  • That does help a bit, but I was thinking more like was it the size of a “bread loaf” you get from a loaf-tin, or a “bread loaf” you get at the store (think wonderbread) or the “bread loaf” that’s baked on a pan after being formed? How much bread was there, what sort of grain was it?

  • I’m pretty sure you don’t need a college education to earn $6.15 an hour.

    I’m sorry Teresa, BA’s retort gave me a good chuckle.

    If you’re willing to use the bus, split the rent with more than one person in an apartment, and not eat out, you certainly can live off of $6.15/hour.

    Maybe if you rent the couch for $100/mo, then it’s certainly possible to live off of that.

  • Btw, Father Ryan’s book is available for free via googlebooks.

  • I gather it was about the same size and shape as the bread loaves you see today. If you google “sliced bread”, you can find pictures of the 1928 newspaper advertisements for the very first bakery to sell sliced bread, the Chillicothe (Missouri) Baking Company. The loaves pictured look about the same as bread loaves today do. The town of Chillicothe, Mo., in fact, now bills itself as the “Home of Sliced Bread” and has an annual Bread Fest to commemorate its place in culinary history.

  • I don’t know how Fr. Ryan arrived as his figures but I would insist that a living wage be relative to the standards of the community one lives in. The entire purpose of a living war is to ensure that every man can live a life of dignity. You can live in Zimbabwe in dignity without running water. You can’t do that in America.

    And why use a family of 5 and not a family of 10? Are we supposed to let the family of 10 live off less than a living wage? A living wage necessary varies according to the number of dependents. Any family receiving less should be aided.

    Adjusting for inflation isn’t necessary the best way to adjust Fr. Ryan’s figures. Real GDP per capita grew faster than inflation. In other words, Americans got wealthier. Using Fr. Ryan’s figures today adjusted for inflation would be appropriate if real GDP per capita was stagnate for 89 years. In 1919, GDP per capita was $805. If you only adjust for inflation, that would be $9,897 today. That’s somewhere between Cuba and South Africa. So $6.15/hour would be an appropriate living wage for a family of 5, in Cuba.

    If instead we adjust for unskilled labor wage increase (4.24% annualized since 1919), $1,400 to $1,500 then would be $56,388 to $60,416. That’s probably closer to what Fr. Ryan had in mind.

    Based on rough calculations I did a few years back, I think the federal poverty guidelines are too low. For a single person, I think $14,000 is appropriate and $5,500 for each dependent. For a family of 5, that would be $35,500.

  • The (mid-range neighborhood, new complex, Tacoma, gated community) place across the road has two bedroom apartments “perfect for roommates” at $650/mo, and three for $1060. (Actual cost would be roughly 700 and 1100, assuming the worst case of everything–they’re run by the same company as ours.)

  • My dignity is unharmed by someone else having three new BMWs while I have a used minivan, or a bicycle.

  • Some want to provide everybody with a just wage. I think it should be done by government programs that could be expanded. But, first . . .

    One: Every charitable person wants everybody to earn a just wage that will allow all men (how sexist! the traditional head of the now-defunct nucular family) to support himself, his wife and children.

    Two: you probably cannot have a real-life economy where every man has a just wage. It is impossible in the real (even in the USSR, China, Cuba, Greece, Spain, Zimbabwe, etc.) world.

    Three: you may not condemn/demagogue the American, private sector because you cannot have numero One above. You cannot wage an unjust (nonviolent) war against your fellow citizens that own businesses. It is not charitable.

    Look it up. Don’t believe me. The federal government’s Internal Revenue Code has the “Earned Income Tax Credit.” It pays a negative tax (money for nothing from the government, i.e., my children and grandchildren) for a FAMILY man/person that files a tax return and has AGI below a set level. Try expanding that.

    PS: I can’t imagine that even this would be feasible in the volume needed, even without 50,000,000 more poor people coming in over the next 10 years.

  • Looks like 1910 is a funky year… it’s when they automated bread baking for the first time, so those loafs looked like now….

  • Adam Smith put it best.

    Wealth of Nations:

    By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without. A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably though they had no linen. But in the present times, through the greater part of Europe, a creditable day-laborer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct. Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person of either sex would be ashamed to appear in public without them. In Scotland, custom has rendered them a necessary of life to the lowest order of men; but not to the same order of women, who may, without any discredit, walk about barefooted. In France they are necessaries neither to men nor to women, the lowest rank of both sexes appearing there publicly, without any discredit, sometimes in wooden shoes, and sometimes barefooted. Under necessaries, therefore, I comprehend not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people.

  • Thanks for the google book tip, Blackadder. I just downloaded the book and will read soon.

    Tito, I am glad you got a chuckle out of Blackadder’s retort. Blackadder’s response even gave me a laugh.

    It would seem that what is considered a just wage would depend on different variables such as inflation , GDP per capita, and varying prices for housing, food, etc. according to the various locations.

  • A wage “sufficient to enable [a man] to support himself, his wife and his children.”

    Whatever the income necessary, every child should be a member of a family housed with decency and dignity to enable it to grow up in a happy fellowship, without want for food, or clothing, or overcrowding, or slum surroundings. And every child should have the opportunity to attend school and/or college to attain its full development. Father Ryan knew not that our secular society would sacrifice children so as not to be inconvenienced. If he had known of the heinous sacrifice of children to occur in the future, it seems to me that a “just wage” would have been deemed irrelevant to him. I think his computations might have been on the assumption that the family would be inspired by faith in God and focused on worship. He never envisioned the present breakdown of family and society.

  • RR-
    has nothing to do with your attempt to shift to GDP, or relative wealth of the nation.

    Feel free to define what you think is the abject minimum someone needs for a minimum wage job but which wasn’t needed back then.

  • I’d consider a phone a necessity today. Electricity, indoor plumbing, a refrigerator, and education through high school. Do you disagree?

  • To be most efficient, I’d add in some sort of POV– even if it’s a motorcycle with a sidecar. There’s just too many things you need a vehicle for if you have a family, and transportation opens up a much wider range of jobs.
    POSSIBLY a bicycle with a cart would work, but I’m not sure it’s feasible for buying in bulk or getting to the doctor with three kids.
    (Buying in bulk for two on foot was not possible in any affordable housing, and public transportation is often not safe for someone who would be as tempting a target as a woman with three small children and a massive load of groceries.)

    Basic medical care is required for the gov’t schools– I believe there is help for this, though I can’t remember if it’s gov’t or private.

    It might be cheaper to use a track phone rather than having a line in the house– I’ve never had a land line, let alone an incoming-and-local-only one.

    Clothing–can be gotten from Goodwill etc at very decent prices, and often you can find footwear that would be rather expensive for a good price.

  • RR,

    “I would insist that a living wage be relative to the standards of the community one lives in. The entire purpose of a living wa[ge] is to ensure that every man can live a life of dignity.”

    Hmm. We agree this time. There’s no point in talking about a “just wage” unless these relative factors are taken into account.

    Of course, I favor reducing dependency on wages and replacing it with various forms of income earned through direct ownership of property.

    A “wage” is the market price of labor. Instead of talking about a just “wage”, we ought to talk about a just income and how it can be acquired.

  • I can imagine the shock and incredulity on the faces of my clients if I upped my fees to provide what I think is a “just fee” for my legal services. I would see the look on their faces of course only until they vanished in search of other attorneys who could provide them with legal services at what they considered a more reasonable cost according to prevailing market conditions. The problem with the concept of a “just wage” is that unless it is simply for informational purposes or philosophical musings, it takes a huge state to enforce it. Perhaps a better path is for most people, those able to compete in the market place, to arm themselves with the education, training and work experience necessary to allow themselves to get the highest income possible for the services they provide. Private charity, and government assistance, can aid those unable to compete.

  • Fr. Ryan offered that justice required a wage floor which exceeded the earnings of 48% of the male workforce and (scribbling on the back-of-the-envelope) would have been somewhere in the range of 2/3d of the national mean of a country already quite affluent by historical standards (though befouled). Catholic Social Teaching is a work in progress…

  • Well, there ARE things we can do to make wages more likely to support a family– remove regulations that currently prevent the simple, zero-experience jobs from being done by children and the deeply disabled for a low price, control the supply of labor (not in the crazy scifi or China way, but by controlling our borders– in terms of people and goods), lower the cost of raising children by removing tax related expenses to it, make unions for only one business instead of several (as those that ‘serve’ several businesses have less worry if one goes out of business), lower the costs of business (my mom does crafting out of the house in addition to a full time job- maybe five, ten shows a year, and her profits are lower than the gov’t costs alone), reform lawsuits so they cannot be used as a source of income or a harassment tool, lower the level of government control as much as possible (local politicians have a MUCH higher level of risk if they target a local industry for cheap grace or benefit)….

    There are two ways to try to get a fair wage:
    *control everything and enforce your goal (there will still be an underground economy, unless you’re in a police state such as the world has not yet seen)
    *try to set up a situation where your goals can most easily be achieved without triggering a profit-impulse towards subverting your goals
    Basically, forced and chosen; trying to avoid a false choice, but you either get to choose to do good or you’re forced to do it, so I think I managed….

    Sadly, our current situation falls into the first one, since we’ve got minimum wage that at least meets the theory’s level of support, but that law is widely subverted (under-the-counter pay, not legally hiring babysitters and lawn-mowing teens)

    {Since we haven’t figured out a reasonable cost to live, I’m using the only number we have.}

  • LOL so we are into child labor and allowing big businesses get away with it again! Yes, that will help with the money! Child labor! Of course that will just put more money into the system making each person’s contribution that much less, just as it happened when it became two-income families! So let’s make it tougher on one-income wage earners!

  • Another factor to consider is that most families don’t have three children and that both spouses work. That may not be what Catholics want but it is a fact. Catholics also have to realize that while current standards dictate a car, phone etc., there are things we really don’t need. We need a refrigerator but we really don’t need a phone. Certainly don’t need iPods and air conditioning. Don’t need TV, cable, game systems, and many people do not need cars. Many do not need to own homes.
    There are a lot of “needs” that are ultimately wants. Even in an affluent society. And that is a Catholic perspective.

  • Most forms of employment require a way to quickly contact the worker when he is not a work– even fast food workers require a phone of some sort.

  • That’s become a manufactured need. If we are talking about restructuring society, let’s talk about real needs. Most people don’t need to be contacted by work quickly, that’s what some may want but its not a need. Fast food workers don’t really need a phone. If the manager of the McDonalds needs a replacement he can do what people did in the past – make due with who he had and do the line work himself. That’s what happened when McDonalds first started.

  • Who said anything about restructuring society? Government or law, yes, but society is notoriously resistant to control.

  • I’m talking about restructuring what we perceive of as needs and that can happen at the personal level. I can recognize I don’t need cable, iPods and other things. Individuals can, and do, live without phones. We don’t need air conditioning to survive. We don’t need lots of things to survive. If people begin to live that way, then society will follow.

  • Most forms of employment require a way to quickly contact the worker when he is not a work– even fast food workers require a phone of some sort.

    Father Ryan thought that telephones were an inappropriate luxury. Nowadays, of course, it’s hard to imagine life without one (even kids in Africa have cell phones).

  • Perhaps hard to imagine life without one, but possible to live life without one.

  • It’s possible to live life without indoor plumbing and electricity, just as my family did for some twenty plus years after Fr. Ryan was writing. (I actually know the exact year my mom’s family first got indoor plumbing– ’58, because they moved that year.)

    A lot of places you can’t live without air conditioning– the solutions that work when you’re in a two-room shack don’t work when you’re in an apartment complex, and heat can kill as easily as cold. (possibly easier, just less often– depends on if you mean “distance outside of the comfortable norm” or “likelihood it will kill you, on average”; a 45* rise in temp over “room temp” puts you at 120, while the same drop is 35*– which one shuts down cities?)

    Laws aside, there’s no reason a five-person family can’t live in a one-room apartment, even if current population levels mean it would have to have indoor plumbing, power and (in some or most areas) some sort of air conditioning.

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  • Having lived in the South for years without AC as well as the Southwest for 18 without, it is possible to live without.

  • I agree that AC is a luxury, especially since I’m living without it right now. A phone is a necessity since most, if not all places of employment, need a contact number to hire you and then to get in touch with you during your employment with that company. Cell phones (even long distance land lines are not necessary) cable, and the internet are not necessities. There are community centers and libraries that have free or low-cost internet access for those who do not have internet access in their homes.

  • I for one would be much more impressed with this austerity blather about how little one needs if the people proposing it would voluntarily live it. I’m afraid reading much of this is like hearing virgins discuss sex.

  • Its kinda like those who talk about redistribution who don’t pay income taxes.

  • “Father Ryan thought that telephones were an inappropriate luxury.”

    My paternal grandfather also thought that. My grandmother did’t get a phone until after my grandfather’s death in 73. They also didn’t have a car, and didn’t have an indoor toilet until 68. Raising six kids on what a shoemaker could make in the Great Depression in Paris, Illinois left habits of thrift for a lifetime.

  • I think, in general, a pre-paid cell phone provides a family a greater value than the money saved by a land-line. An AC isn’t necessary in most circumstances but try telling your kid to do his homework in 120 degree weather. Possible? Yes. But the cost of bringing the temperature down to 85 for a few hours may be less than the value even the poor place on the comfort and increased productivity.

  • I’ll agree AC helps with productivity. Don’t know how people worked in offices in the summer prior to AC. Do know working outdoors in the summer heat in the South is a major drain.

  • Its kinda like those who talk about redistribution who don’t pay income taxes.

    Hollywood?

  • Don’t know about how much they pay. I’m thinking more along the lines of the roughly half of Americans who don’t pay any or minimal income taxes. That would include a lot of our Academic betters.

  • I’m thinking more along the lines of the roughly half of Americans who don’t pay any or minimal income taxes.

    The reason so many people pay no income tax is because of the child tax credit. IIRC, M.Z. has several kids, and so it wouldn’t surprise me if he fell into that category. On the other hand, I’ve always found the idea of conservatives complaining that people aren’t paying enough taxes a bit unseemly, particularly given the pro-family aspect of the thing.

  • I don’t have a problem with people not having high taxes. Just pointing out that some who speak the loudest for redistribution pay little if any taxes. Kinda like virgins talking about sex.

  • I for one would be much more impressed with this austerity blather about how little one needs if the people proposing it would voluntarily live it.

    No one is proposing that austerity be mandatory or morally required. The point is, rather, to think about how much money people have a right to demand that other people give them. Clearly if Peter is demanding that Paul give him free money, Paul has a right to think about how much money Peter really needs.

  • And needless to say, Paul isn’t obliged in any way to live at the same level of austerity that Peter does (when living on money taken from Paul).

  • JD,
    Unfortunately, I don’t think that is needless to say at all.

  • Keeping a baby in a house that’s 100+ degrees is likely to make you a family of four, one way or another, especially when the least expensive housing doesn’t have the option of a crossbreeze for cooling. Ditto for older family members, or anyone else who is not in good normal health. (Thus, why I used words like “some” and pointed out that housing now is different from housing then.) Look at the deaths from that heat wave in France a few years back, or the emergency “cooling centers” in Seattle just last week. (I wouldn’t put Seattle on a list of places that need it to live, since our dangerously hot days are limited enough that you can set everything aside to go find a public place that is cooler, it’s just a recent example of high-profile response to heat risk.)

    Phillip-
    arguments are not more or less accurate by who is offering them; it’s more than a little odd to see the traditional slam against Catholic priests talking about chastity and marriage on a site like this. If the root of someone’s argument is their own experience, then it’s about them, but there’s nothing inherently inaccurate about “virgins discussing sex.”

  • Just using MZ’s line for rhetorical effect. I actually have no problems with virgins discussing sex.

  • AC is not a luxury in Phoenix, let me tell you – old people can die without it, and even healthy people can easily succumb to heat stroke.

    Any assessment of necessities has to take in the society in which one lives – to simply exist physically at some location within a society is not enough, a person has to be able to participate to some minimal degree.

    Everyone needs a telephone, a means of transportation (even if its just a bus pass or a bike in some cases), I would say everyone needs a computer, though people without Internet could always use a public terminal. Certain appliances, electricity, plumbing, etc.

    I’m not saying it is the duty of the state to provide these things, but any discussion of “need” has to take them into account. Otherwise you’re just being silly.

  • “Don’t know how people worked in offices in the summer prior to AC.”

    I believe they had shorter hours, shut down for several days or more when it got dangerously hot, and I’m guessing, learned to have a much higher tolerance for sweat and body odor.

    “AC is not a luxury in Phoenix”

    I suspect that air conditioning is probably one of the biggest factors responsible for the economic prosperity of the Sun Belt states — that and the removal of racial segregation laws probably have done as much if not more to contribute to the economic growth of the South and Southwest as have low taxes and right to work laws.

  • Just so Elaine. People wouldn’t live there before AC and the vast majority of those that lived there prior to AC, well, lived there. But we were talking about a living wage for a husband and wife and the children they were raising. So again, they don’t really need AC even if the elderly might (or they might move to cooler climes.) I know. I lived in the Southwest without AC. Also in Southern Spain where almost nobody has AC. Hits 120 in spots during the summer.

    Agree not everyone needs a computer as those can be found in libraries. Phones used to be found throughout towns and cities. Once upon a time it took ten cents to work one and then 25 cents. If you didn’t have enough money could do something called a collect call. Those phones could easily make a comeback.

    Again, many things we want, not so much we need.

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Pope John Paul II Comments on Rerum Novarum

Monday, June 29, AD 2009

I am going to provide everyone with a nice blast from the past- everyone I know respects Pope John Paul II- most orthodox Catholics refer to him as John Paul the Great. So I think what he thought officially as Pope on the question of Capital/Labor/State as part of the tradition deriving from Pope Leo XIII’s Rerum Novarum- is incredibly interesting and relevant. Here is Chapter One of Centesimus Annus with no personal commentary- let the “man” speak without any interference from me:

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7 Responses to Pope John Paul II Comments on Rerum Novarum

  • The very existence of Rerum Novarum puts to shame the thesis that industrial capitalism, all on its own, either did or would have addressed the problem of poverty.

    I have seen this argument, from Tom Woods Jr., Robert Novak, especially when they critique Distributism, that critiques of capitalism are entirely baseless. They take it as an unquestioned article of faith that any life under industrial capitalism is better than any life in a non industrial capitalist society, that prior to capitalism only one word could sum up the human condition: poverty, and perhaps another: oppression.

    In this particular case criticisms of modern conservatism as nothing but the guardian of Enlightenment liberalism ring true. To make this argument, one has to essentially say at the same time that Rerum Novarum was unnecessary, that workers movements in general were unnecessary. It is the same logic that the neo-Confederates make: slavery would have been abolished on its own, so there was no need for a civil war. Capitalism would have cleaned up its act, so there was no need for a labor movement, government intervention, or the moral condemnation of the excesses of the system by the Popes.

    The problem is that neither of these claims is substantiated by the historical record. They are made with a sort of “faith” in what could have been. Here and there you have a General Lee or a Teddy Roosevelt who argue against the worst aspects of the system, and this is dubiously stretched out as an argument that the system would have reformed itself without any outside interventions.

    Counter-factuals aside, the reality is that the Papacy believed that the problems of industrial capitalism were not “self corrective”, that the workers had every right to organize and make economic and political demands, and that the duties of businessmen were not just to meet the economic demands made by consumers but the moral demands made by society and those who worked for them. Time and time again the Popes implored Catholics and society at large to find ways to increase the share of ownership of the workers in businesses.

    So, we can all thank capitalism for technical progress. Even Marxists do that. But moral progress was the domain of thinkers and activists well outside the capitalist class, people who did not share its goals, and often opposed them in certain respects. It is easy to take for granted the rights of workers today but a read through of Rerum Novarum shows us that they were in some question 120 years ago. In many places, they are in question even today.

    In the 21st century I hope we can move beyond the words “capitalism” and “socialism”. They are outdated and useless. The kind of economy I want to see is one in which there are still markets, but in which wealth and decision making power are not excessively concentrated, which is unambiguously subordinated to a moral hierarchy of values oriented towards the common good, and generally accountable to the direct will of the people (the eventual pressure of market forces is not and never will be enough).

  • Does Modern Conservatism actually make all those arguments.

    I mean Does modern Conservatism and I am talking the mainstream actually want to abolish Unions? I mean they talk about the problems with Unions and their excesses and are against things like Card Check but I rarely here modern Conservatism wishing to abolish Unions.

    GOvernemnt Intervention? I don’t here modern Conservatism want to abolish in the Food and Drug administration and the testing of meat? Besides for some tweeking I don’t here many modern conservatives want to abolish all child labor laws. Most Conservatives think having common sense Govt regualtion is a good thing.

    I often think that Modern Conservatism or Movement Conservatism is being confused with some Libertarian economic viewpoint.

    It is true that the modern conservatives think Govt is better if its lesser but I would contend that those conservatives that want no Govt intervention is very very small

  • JH,

    The problem is that both sides are reactionary. Conservatives may be fine with some government intervention but set against liberals who want more, they end up sounding as if they want none.

    It is hard to avoid this. I can’t always avoid it myself on issues important to me. But we must always try.

  • Joe I think you have a point. I think the problem is the internet draws lets say the extremes. I am on several boards I meet people that call themselves Conservatives and ranting about how the GOP is not really conservative. Of course when you examine their post they are far beyond conservative and rant about getting the Govt out of public education and almost toeing the Club for Growth line

    They are are same folks that call McCain a “liberal”. Or as we saw incrdibily go on a huge campaign against Huckabee and call him a Christian Socialist. Yet despite the internet astroturfing, the massive emails sent to everyone it turns out the average GOP and conservative voter liked Huckabee and McCain despite the gnashing of teeth from groups that have their monetary self interest in organziations direct mail and caging companies

  • I read the excerpt from RN almost with dread; I feared perhaps I would be reading something which, startlingly, would shake my confidence in my conservative outlook on the role of government. Much to my surprise, that didn’t happen!

    I think you absolutely *destroyed* the straw man set up in the firat comment: those rascally Conservatives would have to Repudiate The Pope Himself in order to deny the obvious truths set forth in RN! And JPG only echoed and reinforced RN, spo there!

    The problem I see with that statement is this: there are few, if any, conservatives who advocate totally unregulated economic activity. You see…being *against* the federal government taking a controlling interest in GM, for example, does NOT equal being *in favor* of eliminating unions, child labor laws, and OSHA.

    There is a proper role of government (which, in my view, involves the use of force against malefactors inside and outside of the country, and facilitating commerce among its people, to include appropriate regulation of said commerce). The problem many conservatives have with Governmentalists (to coin a phrase) is that the Governmentalist looks to Government and the solution to ALL ills. And it just doesn’t work!

    JPG’s and Pius XI’s calls in their writings are for *appropriate* government intervention, in those areas suited to government intervention.this paragraph grabbed me in particular:

    “This should not however lead us to think that Pope Leo expected the State to solve every social problem. On the contrary, he frequently insists on necessary limits to the State’s intervention and on its instrumental character, inasmuch as the individual, the family and society are prior to the State, and inasmuch as the State exists in order to protect their rights and not stifle them.37”

    This is ther precise concern of the conservative: thatGovernment *never seems to know its legitimate limits*. Consequently, the potential *harm* from *too much* government intervention (all together now: “stimulus bill, GM takeover, Cap-and-Trade, Hah!). Government that *thinks* it knows better than the free market usually ends up trampling its people under the weight of bureaucratic poppycock.

    The government can lay the groundwork for a just functioning society; it cannot (and *should* not!) be in the business of trying to redistribute wealth! It will fail. Miserably! And all the while, we will create a set of conditions that stifle innovation (say, Soviet Union) and allow people to settle for far far less than that of which they would otherwise achieve for themselves and their companies.

  • Here’s the thing.

    I am not setting up strawmen. I understand full well that there ARE conservatives who DON’T oppose government regulations and interventions. You know how I know? I consider myself one. At the least I would call myself a social conservative.

    Pointing out that there ARE ALSO people who DO make these arguments, however, is not making a strawman. I am differentiating between different kinds of conservative. Tim and I and others have heard enough talk radio and engaged in enough discussions to know that there are plenty of conservatives and even Catholics out there who do hold extreme anti-government, anti-regulatory views.

    I cited Novak and Woods because they specifically seek to absolve early capitalism of practically any and all wrongdoing – not only that, they seek to give it the sole credit for whatever prosperity we enjoy today. You WOULD have to repudiate Rerum Novarum to hold onto THAT argument.

  • Right Joe- I base my own reaction to “liberals” and “conservatives” on the way the politicians/media figures/and some real average folks I know, and in fact ran into quite often when I ran for public office- they just don’t talk about issues like the popes- they don’t talk about common good, they talk about freedom from taxes (rarely pointing out that taxes are not all bad or even a good thing- the impression they give directly or indirectly is that tax = theft by government, or they talk about freedom to choose- choose what- well for liberals it’s ususally about abortion or gay marriage- not all but many-

    Again it isn’t everyone who claims the title liberal or conservative, but it seems that the politicians running for office and the media talking heads and the many very outspoken citizens at meetings- they are the ones who speak out very forcefully and polemically, and they don’t sound to me like the social doctrine and popes to my ear- I try to use the language of morality and balance- it’s hard- I’m not the Magisterium- but I definitely try to base my argumentation and beliefs on my studies of the official teachings and documents, along with my life experiences and intuitions- and I find it difficult to see how one would embrace any ideology too narrowly- be it liberal, conservative, whatever- I do believe it necessary to be part of a political party- but we should be very critical members of such, because no party really is based upon our Catholic social doctrine, and as such is clearly deficient- either in theory or practice. When asked if one is liberal or conservative, I think it is better just to say I’m Catholic- straight-up- that’s my goal anyway

Unreasonable Compensation

Thursday, April 23, AD 2009

With people focused on the economic downturn, many have found it a good time to give a little extra thought to whether other people are making more than they ought to. The president has spoken out several times against “excessive compensation” of executives, and a number of people have floated the idea of adjusting the top marginal income tax rate to effectively cap total compensation at ten million dollars a year. MZ tackled the question somewhat humorously here.

Beyond question, $10 million is a lot of money. Most of us will never see anything like that much money, and so it seems entirely reasonable to demand: Why should anyone be paid so much? What’s so special about CEOs and actors and baseball players that they deserve tens of millions of dollars? Aren’t they running off with the money that we should be getting instead?

I certainly wouldn’t claim that executives are not often paid more than they are worth. A board of directors is still a group of people with emotional commitments (including wanting to assure themselves that they made the right pick in choosing the current CEO) and they will certainly not always do what is in their own best interest. Though we may be comforted that in a free economy the incentives are in place to automatically punish them for not doing so.

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22 Responses to Unreasonable Compensation

  • supply and demand, it’s just that simple.

  • Concerns over executive compensations always seem overblown to me; a way for politicians to express faux moral outrage over what is almost entirely a matter of symbolism. In its worst form it exploits a crude populist instinct based on the haunting fear (and resentment) that someone, somewhere might be overpaid. Notice, even if confiscatory taxes were imposed on income over $10 million, the tax would generate very little revenue because the contracts would just be restructured. I suppose there may be some symbolic value in preventing people from being paid large salaries, but it seems to be a very minimal and cheap sort of value.

  • Indeed it is a distraction away from the far more vast and destructive sums being either created or spent by the government.

    While there is something to the argument that top executive are over paid, its really an irrelevant question. They should be paid whatever the market is willing to pay them. If the agreement on compensation is consensual then morally there isn’t much to argue against. If its a stupid move of the part of the employer, that will be revealed in due course as the company’s fortunes decline.

  • One of the odd things about executive compensation is that the people who actually have to pay the compensation tend to be the ones who are least concerned about it.

    As for whether it can be justifiable to pay someone $48,000 for an hour’s work, I think that the Wilt Chamberlain example shows pretty clearly that it can.

  • I’ll point out that to some of the workers on the lower end, $105 extra a year is a big deal (probably an extra week’s groceries).

  • There is a problem with executive compensation. Not that it’s too high, but that it’s unresponsive to the needs of the stakeholders – principally the shareholders of the company. This occurs because of imbalances in corporate governance. I think there are reasonable adjustments that the SEC could make to level the playing field so that shareholders can better control the selection of directors and ensure their interests are better served. This would result in a better correlation between compensation and benefits to the company.

  • I am opposed to high executive pay not because I think it needs to be re-distributed in a futile attempt at equality (real equality will be established through Distributist principles), but because that much money in the hands of a single individual easily translates into disproportionate political and social power.

    The disproportionate wealth stems from ownership, not work. More evenly balanced ownership, i.e. on the cooperative model, will address the problem. We will see that, after all, it is possible to compete and succeed without paying someone 34 million dollars to make all the big decisions. What a waste of resources.

  • I also want to add, whenever I’ve looked up CEO compensation, I see a break down that shows, like I said, that almost all the compensation comes from ownership: stock options, etc.

    The actual salary, for instance, of the CEO of Wal-Mart a few years ago was only 1.1 million, but he took home over 20 million in compensation.

    So, I don’t care about 1 million. I don’t think that gives a person a disproportionate political presence, though, if he is a Christian, he doesn’t need that much money and should give a lot of it away. But that’s his decision.

    I do care about the 20 million. Because it places too much power in the hands of one person.

  • My understanding is that it became a lot less advantageous for companies to give executives stock after the Sarbanes/Oxley round of accounting rules revisions.

    It looks like in this case, the CEO for 1.4M in salary, 5.3M in bonus, 7.9M in stock options and 18.6M in “non equity incentive plan compensation”. So about 1/4 stock, if I’m reading that right.

    It’s really interesting to me (in the sense that it highlights our differences) that you find the stock issues more troubling than the salary. I tend to be very much in favor of paying executives mostly in stock rather than in cash (especially if it’s restricted stock they can’t sell for a certain number of years) in that I think it incents them to look longer term.

    Now for instance, at the company I work for I own about 500 shares total, and my bonus is based on how profitable we are (so it was a lot smaller this year 🙁 ). By comparison, the CEO owns a much, much larger percentage of the company. But I generally consider that positive because I hope it means he’s incented to make good long term decisions for the company. The same actions that will make his billion dollar stake in the company be worth 1.5 billion would make my $5,000 stake worth $7,500, and assure me a safe job and good bonuses in the meantime.

    Which basically makes me realize that while I support a democratic (or more properly: representative democracy) ideal when it comes to political structures, I’m basically a monarchist or oligarch when it comes to the corporate world — though I want to see the castes be porous in a meritocratic kind of way.

  • “I do care about the 20 million.”

    Yeah, right.

    Is that only when his stock options are worth that much?

    Would you actually express the same disgust and resentment when his shares are significantly worth less?

    I can’t believe that folks here have the gall to think they can dictate such seemingly draconian terms on companies across America without actually paying any heed whatsoever on the kind of negative repercussions that might likely occur as a result.

    A talented individual such as a Steve Jobs might as well earn a mere dollar/year for his salary, but God forbid that he should happen to be compensated in stock options which value for the most part ultimately depends on his management of the company.

    Should his skillful management of the company be appropriately reflected in the value of those stock options, crucify the bastard!

    Should the value of said stocks fall below a buck, all the better!

  • “while I support a democratic (or more properly: representative democracy) ideal when it comes to political structures, I’m basically a monarchist or oligarch when it comes to the corporate world”

    And so here’s where we’ll have our disagreements 🙂

    I don’t see how a political democracy can be supported by an economic oligarchy indefinitely. We may call it a political democracy but if real power is distributed differently, it’s just a name.

    What is it people really want in life? I think we agree that no one needs millions of dollars to live a dignified and comfortable life; I should hope we would also agree that any man who says ‘only 30 million can make me happy’ doesn’t have a natural right to it.

    I see no reason why a man can’t be happy with a salary that provides a dignified, comfortable life. I don’t see why progress or economic decision making has to be conditioned on such large compensation. I have a very hard time respecting a person who insists on that much money. What would happen if they didn’t get it? Would they die? What would happen if they just lived at a middle class level, maybe a little higher? It would prevent them from wanting to do a good job?

    I guess I don’t understand how that works. I have many flaws and faults, many sins of which I am guilty, but the need for that much money is something I can say I’ve never had. In fact, give me a computer with an internet connection and I’ll live in a tool shed or a van if I have to 🙂

  • “Would you actually express the same disgust and resentment when his shares are significantly worth less?”

    Disgust and resentment? You’re projecting your own feelings on to me, E.

    I’m for the stock being more evenly distributed to all of the people whose labor create the wealth that the CEO has been hired to manage. Production is a partnership.

  • e,

    Don’t be unhinged. No one said what you’re suggesting.

    Joe did say that he finds it easier to approve of cash compensation than stock compensation — which I find myself at variance to — but no one is talking about crucifying anyone.

    (BTW, I don’t think Steve Jobs even gets stock options. He still owned a major chunk of Apple from when he founded it and figured increasing the value of that was enough. As someone who bought Apple stock in 1996, I agree.)

  • There is a lot to chew on here. I think we are in agreement that the compensation is mostly tied to the performance of the firm rather than the actual work product. My greater concern is not necessarily the gross dollar amounts as much as they act as a first dividend and our lax bankruptcy laws induce companies to undercapitalize thereby resulting in the socialization of risk and the privitization of profit. Similarily companies that carry too much cash on the books place themselves at risk for leveraged buy outs. LBOs wouldn’t be near as advantageous without the bankruptcy protection. Why own company stock if your bonus is equivalent of the dividend of x% of the float? Why worry about the long term health of the company, if you can be paid first and now for risk you aren’t really assuming?

  • The biggest problem I have with large executive bonuses at failing companies is the fact that the top people who are driving companies into the ground are being rewarded while the people at the bottom who are doing the front-line work, no matter how well they do it, get screwed.

    Take the Chicago Tribune, which is handing out $18 million in bonuses to its top executives while firing about 50 reporters, editors, and photographers. The people who actually make the paper worth reading (or used to, before Sam Zell got ahold of it) get nothing while the people who come up with one harebrained marketing idea after another get rewarded, on the grounds that they are sooo talented that the Trib Company simply must provide them with incentive to stay.

    An insistence on high levels of profit for the benefit of stockholders and executives is a big part of what is destroying the newspaper industry, to which I devoted 20 years of my life. It led to Gatehouse Media — a mega-corporation owned by some mysterious hedge fund in New York — buying up nearly every significant newspaper in downstate Illinois, running up massive amounts of debt, then having to slash and burn the staff at nearly every newspaper it owned.

    Now there’s nothing wrong with making a profit, of course; there’s nothing wrong with making big profits if they are the result of genuine innovation and high demand for your product. If Steve Jobs makes gazillions of bucks because Apple computers are great products and everyone wants one (including me, I love them), I don’t have a problem with that. It’s the idea that you can increase profits SOLELY by making risky investments and cutting costs (which usually translate into massive layoffs) that I have a problem with.

  • Elaine,

    While it’s a spectrum rather than a duality, it strikes me you basically have high growth business models and sustaining business models. A sustaining business model has the capacity to keep employing everyone well, and if it has investors to provide them with a small return each year. But the business itself is not going to be worth much more in five or ten years than it is now. A great many small family businesses fall in this category. On the other hend, you have high growth business models where you expect the worth of the business in five or ten years to be anywhere from 2-100x what it is now. These are the sorts of businesses which can return a lot to people via stock, etc.

    It strikes me that a number of the problems we have with “corporate raiding” have to do with people who take what is fundamentally a sustaining business model and try to turn it into a high growth business model for a while in order to turn a quick profit. It’s bad for the business, and indeed basically everyone involved except those who cash out early and run.

  • It’s bad for the business, and indeed basically everyone involved except those who cash out early and run.

    The difficulty, though, is that ‘corporate raiding’ is one of the most effective checks we have on agency costs like empire-building (AOL-Timewarner anyone?) and excessive perquisite consumption. Moreover, such ‘raids’ generally benefit shareholders, while the people doing the raiding are assuming much of the risk. LBO’s provide management with a very strong incentive to eliminate inefficiency and produce stable cash returns. I’ll admit that bankruptcy perhaps eliminates too much of the downside risk (as M.Z. suggested), and that some features of these deals are problematic, but here as elsewhere the benefits need to be considered in addition to the drawbacks. And I think LBO’s play an important role in reducing agency costs.

  • “I’ll point out that to some of the workers on the lower end, $105 extra a year is a big deal (probably an extra week’s groceries).”

    Michael–
    Indeed. But if I read the post correctly, hiring the cheaper guy could end up in revenue loss for workers.

    When you’re one of the guys on the factory floor who gets laid off because the company’s not being run well, it’s a big deal, all right.

  • Joe,

    I guess I’d need to think a little more deeply on the topic, but a few thoughts:

    – I’d see democracy as more necessary for a state than for a company because with a state (especially a large, modern state) the potential dangers involved in failure or overthrow much outweigh the greater efficiency one might find in a monarchy or oligarchy. Businesses on the other hand, present fewer problems when they fail. And leaving a badly run company is generally far, far easier than leaving a badly run country.

    – This is kind of an assumption of the above: It seems to me that individual decision making is almost invariably more efficient than collective decision making. Our form of government (representative democracy) recognizes this, in that rather than having everyone vote on everything, we elect people who then make decisions either individually or collectively. While a company of any size is large enough that one person can’t know enough to make all decisions, I do strongly support business models in which each person is the decions maker in regards to his set of responsibilities, with managers making decisions where necessary rather than doing everything by consensus. It’s not as simple as straight top-down management, but like with a well-run army the executives should give the next level of management a clear set of orders and objectives, those managers formulate order and objectives to accomplish those, and so on down the line. Each person down to the individual worker is a creative part of the whole, but each takes direction from above. Given my experiences in various companies I don’t find the idea of true bottom up management very attractive. I guess I should read up on how this works out in reality in organizations like Mondragon.

    – That said, I do strongly believe in profit sharing and employee ownership stakes. I don’t necessarily see why we should require everyone owning the company equally (if the CEO and CFO were the joint founders of the company twenty years before, it makes total sense to me that they’d own far more of it than the 1000th worker hired who’s only been on staff a year) but I do think that everyone should have a real stake in the company they work for. At the same time, my experience is that often the upper levels of management not only make decisions that have wide ranging effects, but they frankly put in more time than most workers would want do. As I’ve started to have to deal with VPs and Directors more, I find myself getting called into meetings that start as early as 7am or run as late as 7pm, and all the executives I know are answering emails and making phone calls in the evenings and through the weekend. 70+ hour weeks seem standard for them — and I’ve got to say that one of the things I’m enjoying about not being in business for myself anymore is not feeling like I need to put in 80 hour weeks.

  • John Henry,

    Agreed. LBOs are certainly not always a bad thing. Sometimes they turn a failing company into a successful one again. (And as you point out, the leveragers are the ones taking on the risk — since they are “leveraged” as in borrowing the money to fund buying the company on the assumption they can make it work.)

    But at times there do seem to be examples of people taking overweight old companies and trying to turn them into growth monsters when they’re simply in industries where there’s not that much room for growth. (Obviously, the people who try to do this must disagree about whether there’s room for growth.)

    I’d tend to put the fad of buying up regional newspapers around the country over the last ten years in that category. It doesn’t seem to me that there’s much growth potential in regional newspapers these days — at best you can keep them at a sustaining level. Though there are very interesting exceptions. The WSJ has turned itself into a broader national newspaper over the last five years and as a result is growing quite nicely.

  • The problem with this issue (like with many others) is it is multi-faceted and people choose to only address the area that fits the point they want to make or demagogue. Class warfare plays well with the masses so politicians make hay about CEO XYZ getting $$$$$$$ in compensation. It is an easy target to shoot at just like complaining about overpaid ballplayers. Truth is salaries at the top have skyrocketed over the last couple decades. However, that truth doesn’t automatically equal all being overpaid or mean that government intervention is necessary or proper to fix the perceived problem. We often hear that a company needed to pay X amount in order to attract top talent. Problem with that argument is it isn’t always top talent (or top results) being rewarded.

    This situation is similar to the problem caused by “free” health care. Whenever the end user is not responsible for the cost of something you can be sure the cost will escalate unchecked. In this case because of the dilution of the strength of the individual stock holder no one is able to speak up about the corporate waste or mismanagement of assets. If a company is owned by one or a few people they tend to be more careful about out of control spending including spending on management. However, a massive corporation has billions of share holders who have little or no say in the level of compensation, perquisites, or golden parachutes offered to management. I am strongly opposed to government interference, but I see it coming because most boards of directors are too cozy with management and are failing to provide proper oversight.

  • Well said. While some may think $10M or $40M is a lot of money for a CEO there are workers in Africa or China that think making $10 per hour is a lot of money. The goal should not to be to drag down those doing well but to lift up those that are not. You’re free to quit your company if you think the CEO makes too much money. You’re also free to better yourself with FREE books at the library so you can move up the ladder. Besides, the free market will reward and/or punish companies that do stupid things with their money much better than two corrupt politicians being wined and dined by some lobbyist that “help” them decide who gets paid what and who gets taxed and how much.

6 Responses to On Just Wages, Work, and CST (Part II)

  • The argument against the minimum wage is not so much that it violates the the sacred right of private property or freedom of contract as that (to the extent it has any effect at all) it serves to increase unemployment, and thus hurts the very people it is intended to benefit. You seem to recognize this (with your comment about the folly of just raising the minimum wage to the point where we can all live in luxury) but you don’t follow the reasoning through to its natural conclusion.

  • As BA said, I think the main question surrounding the minimum wage is whether it’s better to have more jobs that pay less or less jobs that pay more (with higher prices for everyone). I do not have a strong opinion either way on the answer, but I don’t think it is obvious that a minimum wage is always the best approach.

  • Yes, I did seem to forget to mention that vitally important aspect of minimum wage. For those who would like to read a little more on it, there’s an excellent post over at Catholic Exchange. I’ll see if I can’t do a little digging to have some facts on minimum wage increases and the harm it does to the economy when not handled well.

  • The utter nonsense of Catholic Social Teaching, with its implied socialist/totalitarian goals, is why I left the Church. It is this nonsense that impoverishes the backward nations of the world and enslaves a billion Chinese. No member of the hierachy has any concept whatever of economics or what elevates people above the feudal muck the Church is mired in.

  • Bob, that’s absolutely fascinating, especially considering that CST states:

    1) A well-regulated free market (one that has some oversight to prevent abuses like monopolistic price-jacking) is the most consistent with human nature, directly corresponding with man’s need and obligation to work for a living, man’s right to private property, and man’s interaction with his fellow man;

    2) Socialism is a grave evil

    3) Charity and the care for the poor and needy is best accomplished locally first, and from the state as only a last resort.

    If you left the Church because you felt it taught socialist and totalitarian goals, I suppose that’s okay, because those views are objectively wrong.

    They just aren’t what the Church teaches.

  • Bob – It seems to me that systemic corruption, a lack of respect for the rights of individuals, and a failure to consider the obligation we have to care for the weakest members of society is more characteristic of impoverished nations than an adherence to Catholic Social Teaching. There is very little evidence that Catholic Social Teaching is responsible for the enslavement of ‘a billion Chinese’ people.

3 Responses to On Just Wages, Work, and CST (Part I)

  • Pingback: On Just Wages, Work, and CST (Part II) « The American Catholic: Politics and Culture from a Catholic perspective
  • There are a lot of points in this post that are worthy of comment and/or critique. My first impulse would be to write half a dozen or so long comments each addressing a different point, but if I did that each individual point would likely get lost in the volume. So let me, for now at least, confine myself to one particular point. You say:

    Associated with work is the principle of remuneration. Ideally, a man receives in return for his toil compensation proportional to the effort he has expended. It is justice that if a man expends more hours in labor, he receives further compensation.

    I sense the ghost of the labor theory of value lurking behind these remarks, and I want to send that specter back to the foul perdition from wince it came. It’s not true that compensation ought to be proportionate to the amount of labor that a man expends in performing a given task, or to the amount of time he labors. If A can do a particular job twice as fast as B, then it is perfectly fair for an employer to pay A more than B for the same amount of time worked. What matters is not how hard a person works or for how long; rather, it is the value he produces that will determine his compensation. (It is true that, for practical reasons, a lot of compensation is determined based on time worked, whether in hours, or days, or weeks, or whatever; but there is no reason in principle why it has to be this way, and indeed it often isn’t, as anyone who has ever worked on commission can tell you).

  • blackadderiv,

    Well, I hope the specter is duly banished. I wanted to keep concepts as simple as I could, as this was a long, long post (noted by how I decided to divide it into two posts). The part you have quoted here was merely the comparison of a man with himself, not with any other men. I wasn’t even necessarily thinking so much as a man working for wages in some company, even, but down even to the most basic. If you think of ancient, prehistoric man, out hunting and gathering, the idea would be this: if you spend more hours a day picking berries, chances are (there’s no guarantee, of course), that you’ll end up with more berries.

    You are exactly correct to point out that a man deserves compensation for quality as well as quantity of work. I never meant anything to imply that I denied that. On the other hand, you can’t deny quantity of work, either, at least within context. Quality, quantity, and rarity of work (i.e. special skills that only a few have) are all factors that have to be consider together when working with the whole picture. You’re exactly right about that.

22 Responses to Just Wage Open Forum

  • 60 hour work weeks, particularly spread between two different jobs, is feasible but tiring for a healthy young person without dependents. However dependents make this type of schedule difficult to maintain, particularly given the frequency of divorce and/or illegitimacy in the U.S. Childcare can be very expensive, and generally requires an adult working less than 60 hours a week.

    That said, it’s interesting that the $7.42 figure is in the ballpark of what the minimum wage ($7.25) will be next year. My understanding is that only about 1-2% of the U.S. workforce makes minimum wage, although that percentage may increase when the minimum wage is adjusted upward. Numbers aside, I am looking forward to your discussion of the just wage in CST.

  • Hmm…Not the resounding turnout I’d been hoping for, but then, I can’t expect people to hang out here every hour of every day, either.

    What I failed to make clear in my initial posting is that what I was calculating was a living wage for Laramie, WY, for two people.

    What I intend to discuss with a post that will hopefully be up tomorrow is that there is difference between just wage and a living wage, between just wage and minimum wage, and a living wage and minimum wage.

    I hope we hear more from other people about what they view as a living wage where they live, especially from Michael and Mark. This is, or at least seems to be, an important topic for them, and I’d really like to have them contribute a little before I post my next article.

  • Couple thoughts:

    What a good living wage is varies a huge amount by part of the country. I recall $8/hr feeling very comfortable in Steubenville, Ohio — but then I was paying $400/mo for a three bedroom duplex which I shared with three other working adults.

    Living in Los Angeles, it could be a lot rougher. Car insurance was $200/mo and medical insurance was $500/mo through my work for my wife and (then one) kid. Rent was $1000/mo for a one bedroom apartment.

    I think you were right to calculate an income and a half for two people. Sometimes that’s the husband working a job and a half, sometimes it’s both working, but it’s certainly not unreasonable.

    More generally:

    It seems to me that the real measure of a “just wage” has to do with the value of one’s work. It’s wrong for an employer to pay you less than a reasonable percentage of the value that your work creates for him — especially if paying you only a tiny percentage of the value your work creates results in putting you in poverty. (If you create a lot of value, it may be just to pay you pretty small percentage — though people often want more. In a given month I can point to a few million dollars in revenue that are directly attributable to my actions at work, and my wages are a pretty tiny percentage of that, but I’m nonetheless paid a comfortable enough wage I don’t think I could complain that getting a small percentage is “unjust”.)

    This creates, I think, dual responsibilities for the employer and employee: The employer has a responsibility to design jobs which are of enough value to pay a decent wage — and the employee has a duty to, if he’s a head of household or wants to be, be economically valuable enough to earn a decent wage through the value of his actions.

    My favorite example in this regard is the position of “greeter” at Wal Mart: I think Wal Mart is remiss in having a job description which contributes virtually no value to the company. But I also think that a worker who is a provider has a duty to be able to do something more valuable than being a greeter at Wal Mart. If the father of a family is working as a greeter and having trouble making the bills — the problem is not so much that he’s not being paid enough by Wal Mart as that he shouldn’t be working that job as a head of household.

  • DC, here’s something interesting for you. If you Google “catholic social teaching just wage”, your 2007 post on just wages is the second link that pops up. Just FYI.

  • Darwin Catholic has hit the big time ;-).

  • Boy, that’s odd. I would have thought some “social justice” focused Catholic site would rule that one.

    The benefits of being around a long time, I guess…

  • This creates, I think, dual responsibilities for the employer and employee: The employer has a responsibility to design jobs which are of enough value to pay a decent wage — and the employee has a duty to, if he’s a head of household or wants to be, be economically valuable enough to earn a decent wage through the value of his actions.

    You’ve hit the nail on the head. Using economics positively and not normatively, we can set aside “justice” for a moment and say that a market wage is simply the value marginal product of labor (p*dq/dL).

    Now what does that mean if we’re not just “neutral” economists but Catholics who care about social justice? It means exactly what Darwin said: there is a dual moral duty at work. The employer has to be more realistic about the value and productivity of the work being provided, and the employee has to have the sense to know what constitutes valuable and productive work. Unfortunately, the reason we see guys in chicken suits on the street corner advertising stuff is because neither party is getting it right.

  • a just wage? that would be whatever my employer and I agree upon for me to work for him, with no coercion involved. And it doesn’t matter how I spend my money, or if I agreed upon to little, or how many bills I have.

  • Anthony,

    Actually the Church has ruled that a just wage is not just solely determined by whatever you and your employer agree upon, with or without coercion. Due to certain factors on the part of the employer and the employee, it is possible for the employee to agree, willingly and without coercion, perhaps due to ignorance, on a wage that is far below what the position is actually worth. Now, it is one thing if you’re accepting a much lower wage as a matter of volunteer work or charity, but it is something else if, say, you accept a position worth $20/hr for $8.50/hr, thinking that is a great wage (because you’ve only made $5.15 up until then), and the employer really could pay you $20/hr, then that’s a different story.

    Granted, there are hundreds of different variables to consider, and I believe that, for the most part, the employer/employee contracts are more or less just.

  • Due to certain factors on the part of the employer and the employee, it is possible for the employee to agree, willingly and without coercion, perhaps due to ignorance, on a wage that is far below what the position is actually worth.

    It’s not clear to me how one determines “what a position is worth” without reference to a free labor market.

  • I don’t believe I ever suggested that you could. The assumption that an employer and an employee can make a just contract as regarding the employer’s wages depends upon both having full knowledge of the market forces, and full access to the market. The assertion that, at times, it cannot simply be left to a private contract between employer and employee is due to the recognition that most people will only have an imperfect knowledge of the free market, and only partial access to the market itself.

  • BA,

    I think that in an open market, wages will tend to hit the maximum value possible given the value of the work done.

    So I guess I’d argue that an unjust wage would most often be the case of some sort of market breakdown — either a segment of employees not knowing the real market value of their work and being cheated into working for much less; or employers using some sort of market restriction or force to make employees work for a wage well below what the market would set if allowed to function freely.

    Does that sound reasonable?

  • The scenario envisioned, I take it, is that a man takes a job from employer A at $10 an hour not knowing that another employer, B, is offering $20 for a similar position. I doubt that this sort of thing happens very often, and if it ever did, the simple solution would be for the guy to quit his job and take the position with A.

    Determining which jobs are comparable to each other is, of course, a tricky business (I say this as someone who could be making double or triple my current salary by taking a “similar” job to the one I have now; yet I’m not going to do so because there are other non-monetary considerations in play).

    As for market restrictions making wages lower than they should be, I would certainly agree that the restrictions are unjust, at least in most cases. But given the restrictions, I’m not sure you can say that the agreed upon wage is unjust (at least if implicit in the idea is the notion that it’s immoral for an employer to pay it).

  • There can be conditions, such as a monopsony employer in an isolated region, where the equilibrium wage is below the market wage. A minimum wage in situations like that can help workers.

  • BA,

    I think I’d envisioned something more like: Joe normally pays his technicians at Joe’s Auto Shop $20/hr. He charges his clients $70/hr and has no shortage of work in sight. However, when he hires a new technician Tim, he tells him “Of course, this position only pays $15/hr” because he notices that it’s been a couple months since Tim lost his last job and Joe figures he probably doesn’t have many options. Tim works well and a couple months later finds out he’s making 25% less than the other workers, but Joe tells him, “We only do pay reviews once a year. You’re welcome to leave if you don’t like it,” knowing that there aren’t any mechanics near by hiring.

    Now, I guess you could argue this is the market wage, if Tim is not in fact able to go find another job. However, it does strike me that if there’s no economic reason why Joe has to pay him less, other than that he thinks he can get away with it and make his business more profitable, he’s arguably cheating Tim, and in that sense behaving immorally by paying an unjust wage.

    I don’t think it’s the kind of thing which external entities like governments can do a good job of preventing, so I wouldn’t support any kind of regulation to prevent that kind of occurance, but it does seem to me that Joe is treating Tim unjustly and thus arguably sinning.

    On the market restriction question, I might envision something like:

    The large manufacturing concern in a small town has gone under, and the town council puts out big tax and funding incentives to bring in a new company. Company ABC somes in and sets up a widget factory, part of their deal being they get the town council not to give building licenses to any other manufacturers to come into the town for at least three years. (Illegal, I would hope in the US, but let’s imagine.) ABC then announces it will pay $5/hr in its factory, which is a quarter of what the old bankrupt employer in town paid. The labor of one worker creates $100 in value for ABC per hour. But since people would have to move out of town to get manufacturing jobs elsewhere, enough people grit their teeth and go to work in ABC’s factory that they’re able to run a booming business with huge profits.

    I’d argue that’s pretty clearly of treating workers injustly and thus immorally — but all that has to be done to prevent that at a government level is not provide local monopolies to employers. There’s not a need to legislate wages, but rather to allow employers to compete.

    Do those examples seem to show clear cases of unjust wage paying?

  • I think this discussion, where we connect the moral wage to the current free market value of the labor, is off basis. Why do we have to take the current market value as a given? Maybe the current market value of the labor is unjustly low.

    Look at it from the point of the consumer. Is it moral to purchase goods or services paying a price that we know provides for inadequate wages to those who have labored to produce or deliver the product? As a consumer, should we not be willing to pay for things knowing that their producers are not compensated enough so that they can have an adequate living? I think that justly compensating those who produce our goods should be a major factor in determining what we are willing to pay for an item.

    You are treating the matter as if the market value of labor should determine just compensation. I think that what we need to do is to make sure that the morally just wage determines the market value of the labor.

  • Michael Enright, I have to politely but fervently disagree with your statement. You more or less put the cart before the horse, by immediately judging that wages ipso facto are unjust. You also make a broad, and I think invalid, assumption that just because wages are inadequate to live on, they are unjust.

    I will make a quick statement here, and more in my upcoming post, that not all jobs are intended to be positions one makes a living from, and thus the wages offered for those positions can both be just and inadequate to make a living. For example, I would not expect someone to make a living being a bag boy at Safeway. I would expect that to be a position intended for teenagers looking to earn some money while accruing job experience and a history.

    Honestly, if I felt a company engaged in dishonest business practices by paying its employees unjustly, then I would be morally obliged to shop elsewhere. However, I’m not going determine the price I’m willing to pay for a product based only on the wages paid to the company’s employees. The price I”m willing to pay is based upon how much I need an item and how much I can afford to pay for it. Judging whether or not a company pays just wages is separate issue and depends on regional economic concerns, the jobs themselves, and host of other issues.

  • I have to say that you are taking my statement out of context. I never said anything about teenage workers, although they may have a family to take care of themselves. There are plenty of grown adults forced to do work, and sometimes very hard work, that pays very little. One great example of this is migrant labor.

    Secondly, I never suggested that you determine the price based solely on the wages that are paid. You put that in yourself. I am not advocating for the labor theory of value.

    I also never judged any wage as unjust. That would have to be a specific call based on each particular job.

    All I made was a modest claim. My modest claim is that when purchasing something, and we know that the employees are paid inadequately, that we choose another provider and be willing to pay more so that the laborers are paid adequately. That is one of the factors we should look at when considering what we are willing to pay for an item. We shouldn’t be looking to pay the cheapest prices in order to be cheap if we know that means for inadequate wages. (I did not define what an inadequate wage is). The market itself should advocate for fair wages.

  • I beg forgiveness, then. I did read more into what you wrote than you actually put there. To my mind, there is no separating a just wage from market forces, and what you were saying seemed to suggest (I only say “seemed to suggest”, not that you did so) that we determine numbers beforehand (how, I don’t know), and then compare how the world lives up to that standard.

    Your reply states that I was making an issue out of practically nothing (though there are minor details I could quibble over with you). Mea culpa.

  • Ryan, I pretty much stopped taking you seriously after “… the Church has ruled that… ”

    lol

  • Anthony,

    This is directly from Centesimus Annus, an encyclical by Pope John Paul II, looking back at Pope Leo XIII’s encyclical Rerum Novarum from the perspective of a hundred years:

    8. The Pope immediately adds another right which the worker has as a person. This is the right to a “just wage”, which cannot be left to the “free consent of the parties, so that the employer, having paid what was agreed upon, has done his part and seemingly is not called upon to do anything beyond”. It was said at the time that the State does not have the power to intervene in the terms of these contracts, except to ensure the fulfilment of what had been explicitly agreed upon. This concept of relations between employers and employees, purely pragmatic and inspired by a thorough-going individualism, is severely censured in the Encyclical as contrary to the twofold nature of work as a personal and necessary reality. For if work as something personal belongs to the sphere of the individual’s free use of his own abilities and energy, as something necessary it is governed by the grave obligation of every individual to ensure “the preservation of life”. “It necessarily follows”, the Pope concludes, “that every individual has a natural right to procure what is required to live; and the poor can procure that in no other way than by what they can earn through their work”.

    If you don’t like it, I’m sorry. Or maybe you’re thinking I meant “dogmatically defined” when I said “ruled”, which I did not mean. I meant that popes, after long deliberation and consideration of the teachings of the church, came to the conclusion that I then just passed along in my comment.

  • Hello. It is test.