Living Wage Laws: For and Against

April 9, 2007

1) What do you see as the main considerations in support of a higher minimum wage? In your view, what ideals and moral principles are living wage activists such as Jan Kern appealing to? Does economic justice mandate raising the minimum wage? 

A minimum wage should give workers who have a job enough money to meet typical costs for housing, food, medical care, and fuel costs. People with jobs should not be on food stamps or get housing assistance. People who have jobs should get a just and fair reward for their labor, not a small amount compared to management. The minimum wage seems to be fair and right in a wealthy society. Economic justice can be obtained in many ways and lost in many ways. For example, basic needs can be provided free to all or can be subsidized. Monopolies, bad politics, white-collar criminals, and inefficient markets can steal money from working people.

5) Garthwaite prefers anti-poverty programs such as the EITC to laws mandating higher wages. Do you agree? Is this a good way to protect jobs, or is it simply a matter of employers’ wanting the public to save them money on subsidizing their low-wage workers?

I don't agree with Garthwaite, who prefers anti-poverty programs such as the EITC (Earned Income Tax Credit). It is not a good way to protect jobs. There is no boundary for low wages. Companies will always strive to pay lower wages. That's why companies are outsourcing to other countries, even when our federal mandated minimum wage right now is $5.75. When a company is paying low wages, many families can’t afford health care. For example, most Wal-Mart workers are getting paid at minimum wage and without health insurance. They can't live on their minimum wages and have to rely on programs from the government. Local government and ultimately taxpayers have to pay for whatever Wal-Mart doesn't provide. These and other anti-poverty programs really are government subsidies to business. Also, people need these things. They are not optional. 

7) Do employers have a moral obligation to pay a living wage? If not, why not? If so, what constitutes a living wage? What factors enter into its determination? 

I don't think that employers have a moral obligation to pay a living wage. Businesses are not started to solve social problems or pay workers. They must make a profit, which means they must keep costs low. If they do not, there are no jobs at all. A living wage should give workers enough money to meet typical costs for housing, food, medical care, and fuel costs. These costs are determined by other markets. Government can regulate markets and encourage or subsidize low costs for these necessities in many ways. The best way to ensure that workers have a living wage must take account of many factors and the solution may or may not be to force employers to pay a high minimum wage, depending on the housing, food, medical care, and fuel costs, and the markets for the businesses.

8) If a worker agrees to work for a low wage, does that prove that the wage is fair? Does it entail that the worker is not exploited? 

If a worker agrees to work for a low wage, that doesn't prove that the wage is fair. For example, many immigrants don't speak English and many places are exploiting them due to language barrier. These immigrants don't know much about the low wage laws in the U.S. So a worker may be taken advantage of in this and other ways. A low wage may be the result of having many workers that can do that job. A low wage may be because a job market is controlled by colluding businesses. A low wage may be because a job does not require much capital. A low wage can be the result of fair or unfair markets. A fair wage is the result of a fair and open market. Only if the market is unfair is the wage unfair and the worker exploited.