Tue, 04 Oct 2005

The Morality of a Living Wage

I was having a conversation with a fellow over the morality of a living wage. His point was simply that a Christian could not morally pay less than a living wage. The thing about morals is that anything can be said to be moral or immoral, depending on the principle you are applying. His principle is that Jesus instructed us to take care of the least among us. From this principle he derives the moral judgement that if an employer pays less than a living wage, they are immoral.

This is economic nonsense. Just as a bridge is supported on two ends, so is every economic action. When somebody is paid, it must be for something they have done. If people are to be paid a living wage, they must accomplish a living wage's worth of work. Everyone is fundamentally lazy (a negative description) in that they seek to accomplish their goal efficiently with an economy of effort (a positive description of the same action.) Thus, in order to gain that living wage, people will work no harder than necessary. Similarly, an employer will pay no more than necessary to gain that amount of work. The amount of pay that anybody receives for their job is a function of the pay required to hire the last employee needed. If you can hire ten people at $1/hour, but you need eleven, and the eleventh can only be hired for $2/hour, then you will end up paying all of them $2/hour. What will happen is that the $1/hour people will inevitably find out about the $2/hour person, and either ask for a raise or quit. Since the last person hired had to have an offer of $2/hour, so will the next person hired. In time, everyone will be paid the same amount as the last person hired.

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