Presiding Bishop among the "$10 in 2010" signatories

US faith leaders say lift economy by raising minimum wage (Ekklesia):

The leaders of 15 denominations and national faith organizations are among the inaugural signers of an open letter calling for a $10 federal minimum wage by 2010.

Four hundred faith leaders from all 50 states have so far given their endorsement and more are signing every day, say campaigners.

Rev Dr Sharon E. Watkins, General Minister and President of the Christian Church (Disciples of Christ), signed the letter in support of the ‘$10 in 2010’ campaign saying: "National wage policies are moral documents that express the values of our country. A minimum wage closer to a living wage better reflects our values." [Watkins has been selected by Obama to deliver the sermon at the national prayer service at the National Cathedral the day after the inauguration.]
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Most of the ten occupations projected by the Bureau of Labor Statistics to have the largest employment growth during 2006-2016, such as retail salespersons, fast food workers, home health aides and janitors, have disproportionate numbers of minimum wage workers.

"A job should keep you out of poverty, not keep you in it," said Holly Sklar. "The minimum wage sets the wage floor, and we cannot build a strong economy on downwardly mobile wages and rising poverty, inequality and insecurity. As President Roosevelt understood, we have to raise the floor to lift the economy."

Nobel prize-winning economist Paul Krugman wrote on the moral impulse for a minimum wage in the September 1998 issue of Washington Monthly:

Why increase the cost of labor to employers so sharply, which--Card/Krueger notwithstanding--must pose a significant risk of pricing some workers out of the market, in order to give those workers so little extra income? Why not give them the money directly, say, via an increase in the tax credit?

One answer is political: What a shift from income supports to living wage legislation does is to move the costs of income redistribution off-budget. And this may be a smart move if you believe that America should do more for its working poor, but that if it comes down to spending money on-budget it won't. Indeed, this is a popular view among economists who favor national minimum-wage increases: They will admit to their colleagues that such increases are not the best way to help the poor, but argue that it is the only politically feasible option.

But I suspect there is another, deeper issue here--namely, that even without political constraints, advocates of a living wage would not be satisfied with any plan that relies on after-market redistribution. They don't want people to "have" a decent income, they want them to "earn" it, not be dependent on demeaning handouts. Indeed, Pollin and Luce proudly display their estimates of the increase in the share of disposable income that is earned, not granted.

In short, what the living wage is really about is not living standards, or even economics, but morality. Its advocates are basically opposed to the idea that wages are a market price--determined by supply and demand, the same as the price of apples or coal. And it is for that reason, rather than the practical details, that the broader political movement of which the demand for a living wage is the leading edge is ultimately doomed to failure: For the amorality of the market economy is part of its essence, and cannot be legislated away.

Raising the minimum wage in the face of an economic downturn is especially perverse -- even in the moral sense of the word -- despite whether Roosevelt did it. In addition to tax credits, religious leaders could instead redouble their advocacy of education as the means to better-paying jobs.

Addendum, Jan. 15 - ENS coverage

Comments (2)

JB, I'm not clear what you mean by saying that a living wage is morally perverse. Perhaps I misunderstand you, but you seem to be saying that a living wage is a bad idea.

Although I agree with you that universal access to education is also a desirable goal, it seems to me that a higher minimum wage is also necessary. There are plenty of important jobs in the world which no education will make more lucrative, yet need doing nonetheless. Should the uneducated folks who labor in such work not get paid enough for their forty hours in a week to support their families?

It seems to me that every cord of the social safety net in this country could be strengthened--higher minimum wage, universal access to healthcare, stronger unemployment and welfare benefits, the whole lot--without doing anyone much harm. Is it only the very rich who cannot be allowed to fail? Why are handouts so much more acceptable when they are going to Wall Street tycoons?

Jason Cox

Jason,

Thank you for your gentle response. To achieve your goal a much better way would be to a government subsidy for low wage jobs, but that's exactly what a tax credit is and that's what Krugman suggests is the better alternative. One may think that it is immoral to pay people low wages, but if a higher wage is mandated employers will react by hiring fewer.

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