The Minimum Wage: When Benevolence Hurts

Construction worker

The minimum wage has been the subject of much contention recently and is likely to draw more attention in coming months, as the Democratic platform endorses the “Fight for 15” campaign and Trump has come out in support of a $10 minimum. Their motivation is simple. As Trump put it, “You need to help people. I know it’s not very Republican to say.” (Thanks, Donald, the GOP replied.) But does the minimum wage actually help people? It’s worth digging into the subject both because it is not going away anytime soon and because it offers an example of how first glances can be deceiving when it comes to economics.

The case for the minimum wage is obvious. As the cost of living rises, it seems compassionate to mandate a “living wage” for all employees. Require businesses to shell out part of their profits to add a few dollars to each minimum-wage employee’s hourly wages, and they will be better able to provide for themselves and their families. In fact, the argument goes, raising the minimum wage can even help to pay for itself because it reduces families’ need for federal assistance through food stamps or similar programs.

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Selfish consumption and the recession

I visited a new church today and thought the pastor’s message was worth a comment. He suggested that “the Fed, the politicians, and the bankers” were not ultimately responsible for the recession, the true cause of which was our own selfish race to acquire ever more material comforts and pleasures. I found myself strongly agreeing with his comments on the insufficiency of anything less than God to bring true happiness, while disagreeing equally strongly with his argument that selfish consumption was the primary cause of our current economic woes.

Certainly, selfishness was a contributing factor, but blaming it for the recession is like blaming gravity for plane crashes. Gravity is always a factor, and it can cause a crash, but only when something goes wrong in the plane itself. Similarly, human selfishness helped create our current mess, but only because government distortions of the free market created perverse incentives that eventually built up too much pressure for the economy to bear. Bad economic policies caused the recession; human self-interest contributed only insofar as it has contributed to every economic phenomenon, whether good or bad.

Why does this matter? After all, any message opposing selfish consumption and trust in worldly values should be encouraged, should it not? Well… no. Not if the heart of the message is false. God is never honored, nor his kingdom advanced, by falsehood – even well-meaning or unknowing falsehood. In this particular cause, blaming the recession on human greed poses a number of dangers. To begin with, ignoring the real causes of the recession increases the likelihood that it will deepen or recur.

As Christians, we ought to love our neighbor, which means seeking his best. I only state the obvious in observing that losing one’s job, seeing one’s life’s savings evaporate, or losing one’s house due to an unsustainable mortgage is hardly best. If we are commanded to feed the hungry and clothe the naked, surely we ought to do our best to prevent their becoming hungry and naked in the first place! The Christian duty of loving our neighbor translates into a responsibility to seek the economic policies which are most conducive to social wellbeing. When we ignore the true causes of economic failures, we neglect this responsibility and set the stage for further suffering.

Some might argue, though, that the recession offers long-term benefits which outweigh its costs. By undermining our financial wellbeing, it creates a de facto curb on greed and envy; an ironic twist in which our society’s selfish consumption undermines itself. By taking away the material flimflam on which we have glutted, the recession forces us to value what truly matters.

Or not. Does selfishness come from the outside? If we could only wipe away big screen TV’s, luxury cars, overpriced McMansions, and all the other vestiges of conspicuous consumption, would selfishness trail away with them? Of course not. Take your generic selfish modern man, strip him of everything he owns, drop him in a primitive hunter-gatherer society, and he’ll soon be envious because the bone through Gorgog’s nose is fancier than his. Selfishness, greed, and envy exist independent of their objects; they are entirely subjective. So long as I am I, I can be selfish. What I am envious of is more or less immaterial. (After all, it isn’t as if greed is ever satisfied, even by the most outrageous consumption. The richest billionaire is no closer than the poorest subsistence farmer to filling the black hole of selfishness.)

What was needed before the recession, what is needed now, during the recession, and what will be needed after the recession, is a change of heart. Consumption is merely a symptom. Even if guilt or necessity leads a Christian to cut back his consumption, nothing is gained unless the selfish and disordered affections that lead to conspicuous consumption are eradicated.

Selfish consumption didn’t cause the recession, and the recession won’t cure selfishness. Pretending otherwise merely increases the likelihood that neither problem will be properly understood or effectively combated.