Wednesday, December 11, 2024

Part I

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The Morality of Minimum Wage: The Big Ideology Behind Minimum Wage and Why a Minimum Wage Isn’t as Just as Politicians Want You to Believe

One of the most controversial issues in American public life, at least from time to time and place to place, is the minimum wage. And there are some separate questions. Should there be a minimum wage? And if so, what should that wage be? Now the first question has been answered in the United States since 1938, when in the aftermath and to some degree in the midst of the effects of the Great Depression, the US government put in place a minimum wage, which by the way was about 25 cents an hour. It covered a good bit of the workforce and it came down to a minimum hourly wage that could be paid that would justify a position in which an employer could undertake to employ an employee and pay by a wage hour, and that would turn out to be at least 25 cents an hour.

Now we can understand why the argument for a minimum wage was put into place. For one thing, you had the horrors of the Great Depression. You had people standing in bread lines, you had people suffering very high unemployment, and you also had the accusation that there was income inequality and underemployment. That is to say you had employers taking the labor of those who were their workers without adequate compensation or adequate wage. And so in the name of righting, that wrong of correcting that injustice Congress put into place in the 1930s–and of course this was also a part of the general political momentum of the age that would turn into Roosevelt’s New Deal–they put in this vast expansion of federal authority in order to create a federal minimum wage, and it has been in place now, as I say since 1938. The question as to whether or not there will be a minimum wage, at least in historic terms, has been answered ever since that 1938 date.

But the second question keeps coming up again and again and again. If we do have a minimum wage—and we’ll talk about the morality in the worldview of that question in just a moment–If you do have a minimum wage, what should that wage be at any given time? Ever since the year 2009, the minimum hourly wage in the United States has been set at $7 and 25 cents. So that’s about $7 more an hour than was true in 1938 when it was put into place. But we also know that inflation being the rule over time, what was 25 cents several years ago, it is estimated now to be somewhere around $15 an hour. The minimum wage set at the federal level, the minimum wage to be paid is about seven and a quarter.

So that’s about half of what it would be if inflation were fully adjusted into the minimum wage from 1938 to 2024. Now, I want to suggest that this is one of the most interesting issues we could face in terms of worldview significance. It’s also current headline news. USA Today’s business section yesterday had the headline, “Minimum wage floor to climb in 23 states.” Subhead in the article, “Workers will receive Bigger financial cushion in 2025.” Paul Davidson reporting tells us, “Minimum wage hikes traditionally been aimed at helping low paid workers afford the basics such as food, medicine and housing. But a growing number of states and localities are raising their pay floors to $15 an hour or above, providing workers a somewhat larger financial cushion so they can not only pay for essentials with less of a struggle, but also make some discretionary purchases.”

Here’s the bottom line. 21 states and 48 cities and counties are set to raise USA Today says their minimum wages on January the first. So USA Today has undertaken this study with the National Employment Law Project identified as a worker advocacy group and one of the most interesting data points here takes us to Burien, Washington. That is a town in the state of Washington and Washington’s state minimum hourly wage is $16 and 28 cents. But in that particular municipal area, it is going to go all the way up to 21.16. That is to say $21 and 16 cents for hourly employees of companies that have 500 or more workers in King County, Washington. So that would appear to be very good news for hourly wage earners in King County, Washington. That’s Washington state. But if it’s good in Washington state, that moral principle would mean it should also be good elsewhere in the country where the economic factors are not all that much different.

Well, let’s just talk in general about the very idea of a minimum wage. Let’s talk in moral terms and let’s just posit something. You’ve got people primarily on the political left who say the minimum wage is too low. There certainly should be a minimum wage and it certainly should be higher. You ask them how much higher, they’ll say a lot higher. Meanwhile, there are conservatives who say, “We also want the good for the economy, but a higher minimum wage is simply going to result in more inflation and fewer jobs and you’re going to undercut the economy and you are going to actually put those very workers at a disadvantage. You’re going to be paying them more, but they’re going to be in an economy that will swallow up all that additional income with inflation and other incentives.” So let’s just assume that you have two moral arguments and let’s just assume good inclinations, good motivations on both sides.

The people who are saying we need a minimum wage and we need it higher, they’re seeking the good of people for whom they’re making the argument. The people who argue there should not be a minimum wage, and if there is one, it should not be higher than it is now. They’re also making a moral argument and they’re making it on behalf of the very same people. At least if it’s rightly understood, they also want an economic context in which more people can thrive, fewer people will fail to thrive. So this gets into some really interesting worldview territory. So we have two moral positions here. One says the moral thing to do here, the right morality would be to have a minimum wage and to raise it substantially, raise it a lot, and then there are others saying no. The right moral understanding is either not to have a minimum wage or not to raise it above a minimal level.

Okay, let’s start with the second argument. Let’s start with that second argument that says there shouldn’t be a minimum wage. Why would that argument be made? Well, it’s being made primarily by those who are arguing economic terms for an unhindered economy. That is to say they will say more people will do better over time if you have people who are able to enter into contracts with each other freely without third party external, not to mention governmental intervention. So that is to say, let’s forget it’s a company making cardboard boxes or cars and let’s just assume for a minute, not about a factory that’s making cars, let’s think about say a pile of dirt you have in the backyard you want to move to another place in your backyard and so you have a need. You contract with someone to move the dirt from this pile to that pile.

In that economic transaction, you are saying, “I care about the money less than I do about my time or my ability to move that dirt. I’m going to consider it to my advantage to pay someone else to do that.” That counts on an economic calculation in which the other party, the person who will be hired to move the dirt says, “I care more about the money that guy will pay me than my time sitting in front of the television. Why not get up and move some dirt and make some money?” How much should the man who wants the dirt move to pay the man who’s going to move the dirt? Well, the agreement has to come down in a classical economy to the man paying and the man receiving, having both come to terms with the fact that this is the right price and both feel he is getting a bargain.

So that argument comes down to the fact that moral actors, that means individuals acting in moral terms will come to, in general terms a more right and just decision if they are left free to organize those transactions based upon what they mutually want in agreements to which they mutually agree. That is the way, at least conservatives argue a market should work. And one shorthand for describing that kind of market would be a free market. Individuals are free to enter into the transactions they freely choose. So what would be the opposing argument? The argument for state that is to say government intervention and a minimum wage that will be established and the government will raise over time. The argument is we live in a situation in which we’re not just talking about someone hiring someone to move dirt in the backyard. We’re talking about thousands of people, eventually hundreds of thousands of people, eventually millions people engaged in an economy that is so complex that workers lose the ability to leverage their interest against employers.

And you also have a situation in which people say it is in society’s interest that people have a minimal income if they’re working, a minimal income, and the government should state why that is in order that there could be no one under that income level. Okay, you can understand these are two different moral arguments. Now they’re very different moral arguments, but both are at core moral arguments. They’re making an argument based in morality. Both of them are saying this position is right because it will lead to greater human good because this is the way an economy should rightly be ordered.
Okay, I want to cite someone. He’s a professor at Southern Methodist University. His name is Dwight R. Lee. He is the William J. O’Neill professor of Global Markets and Freedom in the Cox School of Business there at SMU. In an article he entitled, “The Two Moralities of the Minimum Wage,” he sets out this worldview clash. He says, “These are the two moralities that come into conflict here.” The first he calls a magnanimous morality and the second he calls a mundane morality. Now this gets really interesting.

So what would a magnanimous morality be? That would be based in magnanimity, which is to say the moral principle that you’re going to do good for someone and that means you intervene for their good. Now as Professor Lee makes very clear, that works in a very small situation. It works in a situation in which you have a web say of relationships. It works between say a father and a son, in which the father may intervene on behalf of the son. That’s the magnanimity, but he does so because he knows the son and he knows exactly what he’s doing. He’s trying to motivate his son in the right way. He is trying to encourage his son in the right way, maybe to help his son in the right way. But he’s able to make a calculation of this magnanimity, of this generosity because this is his son and he knows his son and he is acting on the basis of information that is privileged to that context.

The second morality Professor Lee talks about this mundane morality. It means morality for everyone. He says that it is, “Suitable for large groups in which members have little knowledge of or personal concern for each other.” Now, that’s a crucial distinction and I would argue it is deeply rooted in the Christian principle of subsidiarity in which we understand that in a context in which we are accountable to one another, certainly in the organic unity say of the family, we can make magnanimous decisions and we should make magnanimous decisions the right decisions based upon our intimate knowledge of each other and what one needs.

When you come to matters on a larger scale, you get outside that smaller unit, you enter into an arena in which we simply don’t know the individuals involved. You have to treat people as if they are units in a larger composition. And that means you have to have generally applicable principles, which means you don’t make exceptions. You can’t. You don’t know enough to make exceptions unless you make exceptions of some kind of class or category, which gets to another big issue I have with the minimum wage. There is no doubt that people who are arguing for a higher minimum wage think that they are arguing for the greater good for a large number of people. By the way, it is estimated right now that in the United States, even looking at millions upon millions of workers, only about 17 million workers are actually paid the minimum wage, which is to say the vast majority of American workers are already paid more than the minimum wage.

And so you say, “Well, it wouldn’t affect them.” Oh, but it would because once you start to scale up the minimum wage effectively, you start to lead to pay inflation throughout the entire system. In other words, if you had somebody who was making $17 an hour and there was someone else making $12 an hour, you raise the 12 to 15. Well, the guy making $17 an hour is going to say, “Well, that does not take into account my greater contribution, my greater expertise.” The next thing you know it’s ratcheting all the way up through the system and that is simply a major driver of inflation any way you look at it. And inflation robs everyone of the value of the money. But there’s another reason why I find the morality of the minimum wage and certainly arguments about raising the minimum wage as you see for instance in this county, in Washington state, you have people who are simply well not able to enter the job market at all.

And it’s because the expense of having an employee is simply now too high. And this is something that’s been playing out in the headlines in a state like California where they remarkably raised the minimum wage for fast food workers leading to a crisis in the fast food industry. And that crisis has led to a couple of predictable outcomes. Number one, your Whopper costs a lot more. And the second thing is there are fewer workers and of course that has an effect in the economy as well. Who gets cut out in that? Well, I think one of the great dangers of the minimum wage is that you have younger people cut out of the job market entirely. I’m certainly of the generation in which so many people began at minimum wage, I did. It was a dollar forty at the time. And I started at a minimum wage job.

I’m not sure I was worthy of that. I had to learn how to do the job, I had to learn how to make a contribution. And you start at the very bottom and then you learn how to be a good employee. You learn the disciplines of work. I think that’s a very strong Biblical issue. The disciplines of work are a part of becoming an adult. Taking on that responsibility. I think Professor Lee’s distinction between the two moralities is a very profitable way, pun intended, of understanding how the minimum wage operates in moral terms. I just want to remind Christians that we’re not talking about a moral argument and a non-moral argument. We’re talking about two different moral arguments. That’s why again and again on The Briefing, I come back to the fact that what we are looking at in a situation is a collision of opposed moralities.

And that’s exactly what we’re looking at here. And by the way, the United States Congress has left the minimum wage since 2009 at $7 and 25 cents because it has become politically impossible to raise that minimum wage. But the headlines in USA Today yesterday are just a reminder of the fact that this argument’s going to come back again and again and again. And you could see why politicians would say, “This will make me look good. If I can raise the minimum wage and I get credit for raising the minimum wage, I can say I am for the worker.” You don’t then often have to take responsibility for the jobs that are lost or the fact that that entire raise in the minimum wage is more than eaten up by the inflation that might result. But I want to go just a little bit further here before shifting to another issue and just say for those who believe that government really should be the big actor here, the government really should be in the business of establishing all these moral priorities, these economic priorities, even down to the minimum wage and all the rest.

The argument for that kind of government intervention, well, it doesn’t stop with a minimum wage and the escalation over time of what that minimum wage would be. It has to get to more than that. And we don’t have time today to consider this any further, but the philosopher John Rawls, a late philosopher of the Left at Harvard University, he argued that something like a minimum wage was simply insufficient. It wasn’t sufficiently just, that justice would not be achieved until the society, and that meant by government coercion guaranteed what he called a social minimum for every individual. That social minimum would be far larger than the minimum wage. It would be what in his vision would represent an equitable distribution of the entire wealth of the society. You understand where that logic goes, and there’s a very good reason why no society has successfully pulled off that Rawlsian vision.

I’ll just state that one issue here is that over time people lose the incentive to work at all, but that raises another issue for another time. In the meantime, let’s just understand that when you talk about headlines about the minimum wage, you are talking about an inherently moral issue and a clash of moralities.

Part II

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SCOTUS and the Writ of Certiorari: The History of How SCOTUS Achieved the Right to Decide Which Cases It Will or Will Not Take

But next we’re going to shift to the Supreme Court of the United States, which make news this week in a way that’s going to escape most public attention. Most people don’t care about the future docket of the Supreme Court of the United States, but just this week the Supreme Court has issued another list of the cases that it will take. And this was announced on Monday of this week. And the headline in the New York Times is simply this, “Justices Decline Cases Concerning a Series of Social Controversies.” Washington Post headline, “Supreme Court turns Away Cases on Hot Button Topics.”

So the interesting thing here is that both of these newspapers have seen as newsworthy the fact that the Supreme Court has chosen not to take a number of cases that could have been very hot cases on hot button issues, and in particular many concerns that have been raised by conservatives in the culture in which conservatives hoped the case would be heard before the Supreme Court. And the Supreme Court has said no at least for now. And in some of these issues, it has said no repeatedly. It might be a good time for us to consider what in the world this means because when we are talking about the Supreme Court and we are talking about the separation of powers, our constitutional order, we recognize how many issues are eventually adjudicated by the Supreme Court. But we end up talking about this a lot, whether it is the Roe v Wade decision or say the Dobbs decision reversing Roe v. Wade, just to take two that are in the virtually every week.

Just understand the Supreme Court plays this outsized role, but the Supreme Court is the Supreme Court of the United States and it doesn’t rule on that many cases a year. So how does it decide which cases it will take and which it will not? Well, I’m going to talk about the main number of these cases, the main process whereby the Supreme Court decides to take a case. And this has to do with the first understanding, that’s the most basic and that is that the Supreme Court of the United States is a court of appeals. It is the highest court of appeals in the United States. There is no higher court and thus very few issues, and these are issues that relate to federal power in unusual circumstances, very few issues arise at the Supreme Court first.

They’re going to arise because one party or another is dissatisfied with the decision of a lower court, in particular most commonly one of the circuits, one of the appeals courts in the United States. In worldview terms, there’s some huge things here. For example, who can bring a case? Let’s say that I as a current resident of the state of Kentucky, I’m outraged by a law that’s passed in Minnesota that I think is unconstitutional. I would not have standing before the Supreme Court of the United States to bring that case. It doesn’t affect me. I’m in Kentucky. I’m not in Minnesota. Someone from Minnesota who is impacted by that law might have the standing to bring the case in the lower courts and eventually to make an appeal to the Supreme Court of the United States.

And one of the most controversial issues this time, that was reported on just Monday in which the court decided not to take the case, an insufficient number of justices wanted to take the case. It was about a Wisconsin case having to do with children and the transgender issue and parental rights and the court in not taking the case that it doesn’t have to say why, but it basically did imply that the reason it didn’t take that case is because those bringing the case didn’t have standing because they didn’t have a child covered by that policy impacted in that way.

Now here’s the thing, a majority or a sufficient number before in this case of the justices could have decided to take the case because they could have decided the standing issue differently. But this is another way that the Supreme Court said, “We’re not taking this case because we don’t want it on our docket for now. Go back, maybe try again.” When the Supreme Court in conference decides to take a case and it requires four of the nine justices to decide to take the case, the court issues a writ of certiorari. That’s a Latin term just meaning it is a statement that the court has decided to take the case. It is going to hear the case. It is going to consider and eventually decide the case and it puts it on the court’s docket. That writ of certiorari, that’s a very important step, but it’s not the final step.

It just opens the door for the arguments to be prepared, for briefs to be written, and for preparations to be made for the oral argument before the court of this issue. But that’s just to say if an insufficient number of justices decide to take the case in the conference, then a writ of certiorari is not given, and that’s where the case simply dies. It stops there. The decision of the lower court is upheld, it’s over. Go home. But here’s where things get even more interesting. How did that happen? How did the court get that right? Well, Congress has the right to establish some of these basic principles. They did so in 1891. The big step taken by Congress was in a judicial act of 1925. So we’re talking about 100 years. We’re coming up on the anniversary. Just about 100 years ago, the Supreme Court was given the right to decide which cases it would take. Before that, cases that had a conflict between the lower courts or in which there was an immediate federal interest or which there was an opposition of parties upon appeal, these went to the Supreme Court.

The Supreme Court basically had to hear all of them. Well, that’s one thing. It was a tiny little young nation of just a few states in a limited population. By the time you get to 1925, we are a transatlantic continental nation with a growing population. Too many cases for the Supreme Court to take. And so Congress gave to the Supreme Court the right to choose which cases it would take, and it’s done so for the last say 100 years. But this is where things also get just a little more interesting. And it’s because not only does the Supreme Court have the right to decide which cases it will take, and thus which cases it will not take. It also has asserted the right to decide which legal questions it will consider and which it will not. And so based upon the lower levels of the courts, as the cases went to the Supreme Court, they went with attached questions.

This is the legal question. This is the question that has to be answered. Ever since 1925, the Supreme Court’s been moving in the direction of choosing which of those questions it’s going to take. So not only does it choose the cases, it chooses the questions, and in even more recent times, the Supreme Court has decided to assert questions for consideration that were not in play when the case was presented to them.

Part III

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The Legal Questions SCOTUS is Asking: How Your Vote for President Ricochets All the Way to the Issues SCOTUS Decides to Take Up Each Term

But in worldview terms, as we come to a conclusion, I just want to say this just underlines how important it is that judges and justices who hold to a conservative understanding of the Constitution, a conservative understanding of the law, an originalist or a textualist or a strict constructionist understanding of the Constitution and federal law, that’s why it’s so important who is on the court. And that means it’s so important who has the right to nominate Justices to the Supreme Court.

That underlines the importance of the presidency. It underlines the importance of every vote. And when you look at Congress, you think back to that 1925 law, you think, “Well, Congress has nothing to do with the court.” Well, of course the Senate does because the Senate must affirm nominees to the US Supreme Court, but Congress also has the responsibility by the Constitution to establish certain legislation that tells the court how it is to operate. It’s just a reminder to us that a lot more is at stake in every election than you know because eventually you can draw a straight arrow from your vote, say, for President of the United States, right down eventually to the question of what question the Supreme Court does and doesn’t take, and of course it does or doesn’t decide to take in the first place. Your vote for President of the United States ricochets like a rocket, all the way through a quiet, privileged, confidential meeting of the justices of the Supreme Court, held in their own building in their own way.

We began by looking at the morality of something like the minimum wage, far more complicated and frankly far more interesting than most people may think, far more integrated and connected to so many other issues which are also inherently moral. It reminds us the Christian worldview, the Biblical worldview asserts the morality of everything rightly understood. We’re making moral decisions all the time, and so are those around us. And as we conclude, those moral decisions are often made by nine people wearing robes in Washington DC. And the conversation even of what cases they’ve decided to take is a reminder of how much those justices matter. As for what the Supreme Court’s going to do with the cases they did agree to take, we’ll have to wait and see. And when there is something worth discussing, we’ll discuss it right here on The Briefing.