Employers, Laborers, and Just Wages

September 10, 2015

The concept of the just wage continues to vex economic liberals, though there can be no doubt that it is an integral element of the Catholic Church’s social magisterium—just as integral as, say, subsidiarity and solidarity. However, even some Catholics who defend the Church’s teaching on the just wage sometimes confuse the concept as the upper limit of what a worker ought to be paid rather than seeing it as the base floor. Here is what Pope Leo XIII teaches in Rerum Novarum:

“There is a dictate of nature more ancient and more imperious than any bargain between man and man, that the remuneration must be sufficient to support the wage-earner in reasonable and frugal comfort. If through necessity or fear of a worse evil the workman accepts harder conditions, because an employer or contractor will give him no better, he is the victim of fraud and injustice.”

Economic liberals, such as those associated with the Acton Institute, or more radical organizations like the libertarian Cato Institute, have little-to-no tolerance for the just wage. By their lights, the just wage—much like crudely drawn minimum wages—fails to pay homage so the market process, as if that process itself is neutral and not subject to manipulation by those with the means to do so. Moreover, the free-market camp claims that it is impossible to establish a just wage in the abstract. This is a non-argument really since neither Leo XIII nor any of his successors have ever attempted to devise a “one size fits all” teaching on the just wage. As John Medaille discusses in his books and articles, the just wage is a standard of measurement, not a fixed number that holds static across time. And because the just wage is, in essence, a minimum wage, the concept does not restrict laborers from gaining further fruits through innovation, industriousness, or intellectual acumen.

Photo by Matthew G. Bisanz 
In A Manual of Catholic Action: Its Nature and Requirements (M.H. Gill and Son 1933) pg. 92, the matter receives more detailed attention:

“Authoritative Catholic teaching does not go beyond the minimum (lowest) wage, and does not declare what would be the completely just compensation. It admits that the worker may often receive more than the minimum, but does not attempt to define precisely this larger justice with regard to any class of wage-earners. And wisely so; for, owing to the many distinct features of production and distribution, the matter is exceedingly difficult and complicated. Different interests have to be considered. From the side of the employer: energy expended, risk undertaken, and a return on his capital; from the side of the laborer: needs, toil, productivity, sacrifices and skill; from that of the consumer: fair prices. In any just system of compensation, all these elements have to be considered. If all the factors concerning capital and labor were agreed on, the problem of the consumer or buyer would still remain.”

Photo by Mike Mozart of JeepersMedia
Two things stand out about this passage. First, as already noted, the Church’s social magisterium does not attempt to authoritatively set wages across the board, nor propose specific numerical floors or limits which can be mechanically applied across industries, geographic locales, or historical periods. A doctor’s earnings should outpace the auto mechanic’s wages, just as the mechanic’s wages should outpace those of a low-skilled laborer working at a fast-food restaurant. There is nothing wrong with this. What is wrong, however, is when the fast-food worker cannot earn enough to live on, let alone provide minimal support to his family. An employee at Walmart or McDonald’s should not have to rely on transfer payments from the government in order to maintain what is barely a subsistence living, and any system which perpetuates such conditions cannot be considered just.

Second, contrary to the erroneous claims of the liberals, the Church’s social magisterium expressly contemplates a role for the market in setting wages above the just minimum. Employer, laborer, and consumer interests all have roles to play. These roles remain subject to the dictates of justice and the market itself is subservient to the common good. It would behoove economic liberals who claim to be faithful sons and daughters of the Catholic Church to take her teaching on wages into account when putting forth their proposals to better society. Economics, or what was once called political economy, will never ascend the throne to become queen of the sciences. The sooner that truth is internalized, the better off we will all be.

Gabriel Sanchez

Gabriel S. Sanchez is an attorney and independent researcher living in Grand Rapids, Michigan. His writings include a comprehensive critical-treatise on international aviation law for Cambridge University Press, commentary on Michigan society and politics for The Bridge magazine, along with contributions to Catholic publications such as The Angelus, The Remnant, Ethikia Politika, and Crisis. Sanchez also maintains a blog, Opus Publicum, and is cofounder and contributor to The Josias.

This article previously appeared at Opus Publicum.