The living wage movement, like the mini-mum wage movement, has a long historicalpedigree of religiously charged moralrhetoric. The term “living wage” first evolvedin the wake of the nationwide railroad strikeof 1877.
The people who coined the termbelieved employers could be coaxed into vol-untarily paying people on the basis of a stan-dard of need. Increasingly, social reformers,often motivated by religious conviction, sawa living wage as a necessary counterweight tothe abuses of industrialization. “[T]he firstAmerican minimum wage campaigns took on elements of a religious revival,” notedeconomists (and living wage supporters) SarLevitan and Richard Belous in their book,
More Than Subsistence
Indeed, it was aCatholic priest, Msgr. John Ryan, who in1906 wrote the first book of consequenceadvocating a living wage,
A Living Wage: Its Ethical and Economic Aspects
The current living wage campaign has itsorigins in the efforts of a church-led group,Baltimoreans United in LeadershipDevelopment, in alliance with the AmericanFederation of State, County, and MunicipalEmployees.
In Los Angeles a rabbi, anEpiscopal bishop, and a Methodist bishopcowrote in a
Los Angeles Times
guest editorial,“We have a right and responsibility to seethat . . . employees are paid enough to sup-port themselves and their families in basicdignity.”
In their book,
The Living Wage: Building a Fair Economy
, advocates RobertPollin and Stephanie Luce quoteDeuteronomy 24:14 as an epigraph: “Thoushalt not oppress a hired servant that is poorand needy.”
San Jose mayor SusanHammer, writing in support of a proposedcity living wage policy, noted several years agothat such ordinances rest on a longstandingmoral claim:For nearly a century, the American peo-ple have insisted that in those caseswhere the demands of the marketplaceand our fundamental values clash, it isour values which must prevail. Thus,we prohibit child labor, and we imposehealth and safety requirements on fac-tories. Similarly . . . a hard day’s work should provide an employee with thenecessities of life—food, shelter, healthcare.
The living wage thus far has been local-ized and limited to selected employers, butsupporters want to institute it nationally andapply it to as many employers as possible.Fully realized, today’s living wage wouldbecome tomorrow’s minimum wage.
The Minimum Wage as aLiving Wage: A Critique
Displacement of Less-Skilled Workers
Congress established the first federal min-imum wage in 1938, as part of the Fair LaborStandards Act, and has raised it 19 timessince. More than 80 studies have demon-strated a link between an increase in the min-imum wage and subsequent job loss, espe-cially among teenagers and unskilled adults,the workers with the least skills, experience,and education.
The more employers have topay such workers, the less likely they are toemploy them. Those workers may turn out tobe productive employees, but they presentrisks to the employer so, given the minimumprice set by the state, the employer reducesrisk by hiring only more-qualified workers.Hyundais are less reliable automobiles thanHondas or Toytas. If the Hyundais could notcompete on the basis of a lower price, nonewould be bought.A review of the empirical research over thepast quarter century supports that thesis. In1977 Congress created a Minimum WageStudy Commission. Economists on the com-mission surveyed a broad range of studiesand estimated that a 10 percent increase inthe minimum wage decreased teen employ-ment by about 1 to 3 percent.
One skepticalresearcher not on the commission replicatedthe earlier study’s methodology and found ateen job loss of 0.6 percent.
Given theminimum priceset by the state,the employerreduces risk byhiring onlymore-qualifiedworkers.