Low Wages and Easy Speeches

Mr Storck attacks the standard capitalist view of wages as 'secondary'.

From The Distributist Review

By Thomas Storck

There are some truly extraordinary statements being made about Catholic social teaching currently by people who might be expected to know better. Consider Tim Busch, a man rich enough so that together with Charles Koch and some others he bought himself an entire business school at Catholic University in Washington. Now this Mr. Busch had some peculiar ideas about work and workers. In an interview he claimed:

What people need to realize is that it is the job that is essential, and the pay secondary. Once people are working, they can acquire additional skills or be promoted from within to earn higher pay. But the minimum wage can eliminate them from having any opportunity to work in the first place.

Mr. Busch makes much of Leo XIII’s Rerum Novarum, a document “that should be more widely read,” he opines. But curiously, Pope Leo did not seem to think that wages hardly matter. Rather he wrote,

Therefore, a man’s labor has two notes or characters. First of all, it is personal…. Secondly, a man’s labor is necessary; for without the results of labor a man cannot live; and self-conservation is a law of nature, which it is wrong to disobey. Now, if we were to consider labor merely so far as it is personal, doubtless it would be within the workman’s right to accept any rate of wages whatever; for…he is free to accept a small remuneration or even none at all. But this is a mere abstract supposition; the labor of the working man is not only his personal attribute, but it is necessary; and this makes all the difference. The preservation of life is the bounden duty of each and all, and to fail therein is a crime. It follows that each one has a right to procure what is required in order to live; and the poor can procure it in no other way than by work and wages.

[Hence] 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 force and injustice.1

Wages don’t matter – unless you happen to be a low-wage worker who also needs to live and perhaps wants to live right now, not wait till that great day in the by and by when he will be promoted. In considering Mr. Busch’s rhetoric one is reminded of G. K. Chesterton’s line about “the easy speeches that comfort cruel men.” How convenient for employers to be told that what we used to call sweat-shop wages are really ok, really an act of kindness since everyone can “acquire additional skills or be promoted from within to earn higher pay.”

But there was once another man besides Tim Busch. He was Fr. Heinrich Pesch, S.J., 1854-1926, the greatest Catholic economist of modern times, and a major influence on the papal encyclical Quadragesimo Anno. Fr. Pesch thought about economics from a Catholic standpoint and was not particularly concerned to tickle the ears of the rich. With regard to wages he wrote in vol. 5 of his Lehrbuch der Nationalökonomie:

The employer who, by his own ineptitude, uses labor in such a way that it does not come up to doing what it is capable of doing, would nevertheless be required to pay the kind of wage which labor is intended to provide. However, if labor is utilized properly in accordance with its natural purpose, and the employer pays a wage which does not provide for labor’s livelihood, then he violates commutative justice. Finally, an industry which, even under normal circumstances is not in a position to pay wages corresponding to what wages are supposed to accomplish, is lacking in economic justification. This means that the requisite consumer demand is lacking, and such an industry no longer has a place in the pattern of satisfying normal human wants.

In other words, if the only way Mr. Busch can keep his hotels open is by paying workers such low wages that they cannot support a family, then “requisite consumer demand is lacking, and such an industry no longer has a place in the pattern of satisfying normal human wants.”

Mr. Busch depends on various groups of people to keep his hotels running, on the staff which he employees, on those who supply the hotels with food, linen, etc., who provide electricity, and so on.

Would Mr. Busch object to paying those who provide food or electricity what they need to keep their businesses running and even make a profit? Does Mr. Busch begrudge a fair return on their economic imput to anyone other than his own workers? If Mr. Busch told those who supply his hotels with soap or shampoo that he would no longer pay what they charged, but that they should be grateful because they had an opportunity to market their product and make it better known, people would laugh at him. Why are workers different? Why are they alone supposed to make an economic contribution without receiving a fair return? Mr. Busch knows that his suppliers cannot decrease the prices they charge below a certain minimum because otherwise they could not stay in business. But workers apparently are just supposed to be happy because they have the “opportunity to work in the first place.” They apparently have no families, no children, no needs.

Such an approach to wages is both an ethical and an economic distortion. If a good or service is worth buying, it is worth paying a price that fully compensates all who are involved in its production. If someone revived chattel slavery and boasted that he could undersell his competitors, who would doubt but that his entire enterprise was an economic as well as a moral evil, no matter how cheaply he could produce? The same logic must be applied to any enterprise which cannot afford to pay its workers a just wage.

The suggestion that workers can live on next to nothing while hoping for that big promotion is unworthy of a Catholic, so utterly opposed to what the popes have taught again and again, so utterly, in fact, contrary to the experience of anyone who has ever worked for a wage. For as Pope Leo so pointedly wrote,

Each one has a right to procure what is required in order to live; and the poor can procure it in no other way than by work and wages. 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 force and injustice.

Originally published in Ethika Politika.