Recently there has
been a push by many unions and some politicians, including the use of
ballot initiatives at the local level, to raise the minimum wage. In
the City of Seatac, Washington, a suburb of Seattle, such an
initiative passed raising the minimum wage to $15/hour within the
City Limits, though the Airport has been exempted judicially. Other
proposals range from raising the minimum wage a couple of dollars to
raising the national minimum wage to $15/hour or more. Some of the
more radical proposals have even suggested imposing a "living
wage" and forcing employers to pay no less than $50/hour. Such
extreme proposals obviously have no chance of being implemented, but
the fact that certain elements in society are shifting the economic
debate to focus on wages demonstrates a fundamental change in how our
culture now views economics and people in general.
Economics used to
be viewed in terms of businesses being collaborative and cohesive,
benefiting employers and employees alike. This is somewhat idealized,
but bear in mind, people are imperfect and they sin. The more
successful companies in history, however, strive, and have sought
after this ideal, and usually come pretty close. Think Hobby Lobby,
Starbucks, and Microsoft, among many others.
For many years in
this country, the economy had been looked upon as an arena of
competing interests, full of opportunity to achieve. The arena was
composed of various markets, where goods and services were sold. Each
participant sought to “make a living” in order to provide for a
family. Creativity and inventiveness were rewarded, often by creating
new markets and industries filled with even more opportunity. We have
seen throughout our nation’s history that as we shifted from a
primarily agricultural society to an industrial and now and
information driven one, opportunity to achieve has also increased.
This often required parties to work together, and the vast majority
of successful enterprises begin by a simple act of cooperation toward
a common goal.
Starting with
agriculture, the farmer grew what he needed for his family, and
either saved or sold any surplus. Then the farmer sought to improve
his lot in life by growing more of a surplus, and diversifying crops,
growing not just food, but things that could be used for making other
useful goods, seizing opportunity and hiring more farm hands.
Gradually, as the textbooks point out, Eli Whitney and his cotton gin
were just the beginning of new and growing markets and changes to the
economy. Farmers began improving how they farmed, rotating crops,
using and improving fertilizers and pesticides. People like Whitney
began a new mechanized market by developing farm equipment. This led
to the increase in wealth, which led to the need for banks, land,
lawyers, etc. As operations grew, more people had to be hired as
contractors or employees to do more jobs. People thought up great
ideas to improve life for everyone, such as the train, the car, the
ability to make ice to keep food from spoiling without having to cure
or pickle it. All of these developments took cooperative ventures.
This is not to say
there were exploitative situations, cheating, or other injustices;
there were, and there will continue to be so long as people remain
imperfect. The driving force was to improve one’s position, though;
to work hard, and to serve your fellow man. People sought out
opportunity. Henry Ford once noted that he could make more money if
he made his cars more affordable. If he could build and sell cars for
$500 to a million people, instead of $5,000 to only 10,000 people, he
would sell more cars to more people and make more money as a result.
The same concept has been applied to virtually every major product
that is mass produced for public consumption, just look at computers
and TV's. The point was that if you did a good job and the public
loved your product, you could be rich too.
But this concept
also applies on the small scale too. Work is not bad, or evil. It is
something that is good for you in many ways. Laziness is not good,
and overworking is equally not good. However, work in and of itself
is not bad at all. For Christians, we recognize that even before the
fall of man, God had created work for us in the Garden of Eden. God
himself worked when He created everything. God showed us that it is
not good to be lazy, but He also showed us to stop and enjoy the
fruits of our labors and not overwork when he rested on the seventh
day. Similarly, Man worked in the garden for God, and was rewarded
with his every need provided for.
After the fall,
however, work became more difficult. It required more of a focus on
working together, helping others, and serving others. Throughout
human history, we can see the benefits of teamwork in our survival,
and in doing business. The key is working to serve others. In
economic terms, this means that labor, skilled and unskilled alike,
have the potential to become commodities like any other raw material.
Labor, however, is a unique raw material in that is it derived
directly from people. This means that such a “commodity” must be
valued differently, and on more than one basis. It also means that
labor should be considered more than just a raw material, but a
special asset as well.
First the employee
as asset. Labor is valuable for what the person providing it can do
for you, but also for the relationships that form, and the sense of
community that develops. For instance, it is not uncommon for
friendships at work, and even romances, to develop. The employees at
large factories would think of themselves, and indeed often refer to
each other as part of the family (Welcome to the XYZ, Corp. family!)
As many who study social interactions will tell you, businesses with
a strong sense of community tend to be more productive, and the
employees tend to be more productive. However, when that sense of
community is broken down, moral suffers, and sometimes the business
closes down.
Examples of this
include the recent demise of Hostess prior to its resurrection,
(possibly a topic for another day) the labor dispute between Boeing
and the Machinist Union, Chevy and the United Auto Workers, and now
the possible unionization of fast food workers. The breakdown in
these situations involved wages and benefits. While it is important
for businesses to care for their materials and assets, and employees
are certainly an asset since we know they are more than mere
commodities, it is equally important for employees to recognize their
role too.
Businesses provide goods or services to
the public, but they also provide jobs and the ability for a person
to earn a living. The goods and services cannot be provided, however,
if the employees do not perform their duties well. Again, teamwork
and mutual respect are the key. When an employer views their
employees solely as a commodity and not also as an asset, the
employee becomes indistinguishable from an object, inhuman. That
hurts moral and productivity. When the employee sees the business as
something exploitative and monolithic, the employee also no longer
sees the business owners as human. This breaks the necessary
connection and collaboration needed for the business to run
effectively and efficiently. The result is a constant battle between
employer and employee.
The employee as
commodity. We see how an employee is an asset, but as we know, labor
is also like a commodity. This means that labor is subject to the law
of supply and demand. It would be great if we could hire as many
people as we could put to work. Unfortunately, we cannot
realistically do this. Not everyone is sufficiently skilled, and the
skilled positions are more scarce than non-skilled positions. Also,
an overabundance of labor drives wages down. We cannot hire a million
people for 1000 jobs without driving the pay down to levels no one
who accept, and we couldn't pay what everyone wanted without
exhausting available resources and forcing the business to close.
There are also
artificial forces affecting wages too, such as employment taxes and
benefits. Providing benefits means resources must be used that might
otherwise go to profits, or to higher wages. If I pay someone $10 per
hour plus a retirement benefit and medical and dental coverage, I can
only afford to hire so many people before I have to raise prices. If
I raise prices and sales decline, I take in less in profits and may
have to either cut wages, cut employees, or keep things the way they
are and eventually close the business down. This also forces the
employer to think of the employee solely in terms of being a
commodity, and less human. Employees also lose the drive to achieve
and improve their position, to fulfill their ambition. Whether this
is climbing the corporate ladder, starting a new business, or earning
prestigious awards in their profession, employers and employees alike
have ambition and a drive to improve one's lot in life. If this
ambition and drive are removed, it contributes to a view of employees
being objects instead of people.
If the government
forces the minimum wage up equally artificially, the employer is
coerced to think of the employee as inhuman and purely as a commodity
only. The tension between the employer and employee also increases,
destroying the collaborative cohesion that could, or might have once,
existed. The employee wants more money but doesn't want to do more
for it, to which the employer believes is unjust, and the employee
believes he or she is being exploited, feeling used and
unappreciated, and also believes this is unjust. Thus the push for
increasing the minimum wage hurts employees and employers alike by
distorting the purposes behind work in the first place, and the
necessary cohesion and collaboration needed for a business to
properly function.
If the drive to
seek opportunity is removed from the economy, ambition to improve
one's lot in life, and the drive to serve others and to work
cooperatively, the economy and indeed whole communities break down
leading to disastrous consequences. People begin to see others not as
valuable lives but as burdens, as incapable for caring for
themselves, and focused only on satisfying base and immediate
desires. Such communities are as short lived as the attention spans
they foster. Will a $15/hour minimum wage cause such a disaster on
it's own? Of course not, but such an artificial imposition on human
relationships in the economy certainly contributes to it. People are more than mere commodities. They are inherently valuable, having been creating in the image and likeness of God. Ambition and the drive to improve ourselves promotes dignity and respect. Taking this drive away robs people of their dignity and sense of self worth.
