A Living Wage? You decide.
by Fr. John Rausch
|The Best of times for shareholders reveals still hard times for low wage works. Great times for CEO pay scales show flat times for works make the minimum wage. The mighty national economic engine has already roared out of the station pulling a train of unprecedented prosperity, while the working poor stand on the platform left behind.|
The movement for a "living wage" addresses the widening income gap. Since 1994 ordinances passed in 42 cities and counties with proposals in 80 more mandate that private firms eligible for local government contracts pay their workers substantially more than the minimum wage. At $5.15 an hour set in 1997, the minimum wage means a gross annual wage of $10,712, well below the federal poverty guidelines of $16,000 for a family of four. Plainly put, businesses that benefit from public contracts should pay workers enough to keep them out of poverty.
The living-wage movement comes at a time when prosperity has highlighted social inequalities. Welfare reform in 1995 never intended to eliminate poverty, but simply to get people off welfare roles. Stories written about welfare-to-work show the working poor beaten by a system that continues to bloat CEO paychecks and by government contracts that reward corporations with "pork."
Of the welfare recipients who went from welfare in 1998 to work in 1999, only 28.8 % earned above the federal poverty level of $14,500 for a family of three. Approximately 6 million single-parent families, mainly headed by women, survive on low-wage jobs.
"Workers must be paid a wage that allows them to live a truly human life," writes John XXIII, summarizing the Church's 20th century social teachings on wages. Trying to calculate a just wage in dollars and cents, however, posses a daunting task. Numerous variables cloud the calculations.
Fr. John A, Ryan, a theologian focusing on economics, published his doctoral dissertation in 1906 as A Living Wage: Its Ethical and Economic Aspects. After careful analyses of living expenses and social expectations, Ryan suggested a $600 a year minimum for a decent living wage in an American city. At the time the average wage for urban workers remained only $571, so about 60% of America's industrial labor force fell below Ryan's proposed living wage.
For people of faith a just wage addresses the injustice of the system.
Today, the U.S. Catholic bishops reflecting about the just wage include provisions common in the American economic system: "adequate health care, security for old age or disability, unemployment compensation, healthful working conditions, weekly rest, periodic holidays for recreation and leisure, and reasonable security against arbitrary dismissal." Many of these provisions, though not all, have become American law and form part of a worker's social wage. Yet, the list indicates what a modern economy expects for "a truly human life."
Orthodox economists argue that raising the minimum wage for businesses contracting with local governments makes small businesses unprofitable and hurts job opportunities for low skilled workers. Living-wage advocates cite recent studies showing that Los Angeles' $8.64 living wage increased total costs by only 1% to 1.5% for the affected businesses.
With CEO pay rising 36% in the last Business Week survey compared to a 2.7% increase for blue collar workers and no increase for the minimum wage earners, the living-wage advocates are arguing from the moral high ground.
A living wage between $8 to $11 an hour (depending on the economic factors of the area) approaches a just wage more closely than the anemic federal minimum wage some corporations are now paying the working poor.
Fr. John Rausch, a Glenmary priest, teaches
at the Appalachian Ministries Educational Resource Center, Berea, Ky. His column appears
monthly in many Catholic journals and in ours beginning this month, courtesy of the Friends
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