Pursuing Economic “Fairness” Without Understanding Economics

By Austin Hill

Sunday, January 19, 2013

“I just want what is fair for everybody…”

If I’ve heard that line once, I’ve heard it hundreds of times on those occasions when I end up discussing business, economic, and public policy issues with members of the clergy. With the uptick in minimum wage worker strikes over the past few months (we saw another “round” of them at Wal-Mart stores this past week), I’ve had these conversations quite frequently.

What is striking to me is that the starting point for many of these Pastors, Priests and Rabbi’s is to say that they are standing up for “workers’ rights.” But often when I ask them the most basic questions about business and economic matters – “why do some jobs pay better than others?” “What wages and salaries are fair for business owners?” “How are jobs created?” – the answer I get is “I don’t know much about economics…I just want what is fair..”

Karl Marx would certainly appreciate this stance on labor relations – it presumes the absolute best about workers, and the absolute worst about business owners, no matter how virtuously or how poorly either party behaves. But Marxism aside, there are several good reasons why the faith leaders’ stance on labor and work is severely misguided.

It ignores a major player in the labor market - The protests and demonstrations centered on the plight of employees who work for a minimum wage all seem to conveniently ignore another important party in the labor market – employers. Gathering people to “rage” against business owners is consistent with the teachings of Karl Marx, but is it constructive, and does it fit with the faith leaders’ professed beliefs?

Presumably many of the faith leaders crying out for “worker justice” also provide pastoral counseling services as part of their professional and ministerial duties. But would any good clergyman attempt to do marital counseling with only one spouse in the room? Probably not. And while the employer-employee relationship is not a marriage, it is nonetheless a relationship – so why are religious leaders championing the needs and interests of one party while not even considering the needs and interests of the other?

If the faith leaders involved in this activity actually cared for everybody involved in the labor dispute – and cared enough to actually listen to the local small business owners in their communities – they might actually learn why it is that some jobs are regarded as “entry level” and therefore don’t pay very well. It is sad to see clergymen, purporting to uphold the “dignity of the worker,” nonetheless acting as though business owners themselves are something less than a “worker,” and thus seeking to demonize them.

It ignores another important player in the labor market - With all the attention showered upon the restaurant and retail workers who walk off the job so they can go chant, walk a picket line, and talk to news reporters, an important fact gets lost in the milieu: an overwhelming majority of workers earning minimum wage at restaurants and big box stores are – thankfully – NOT walking off the job. On the contrary, most of them are diligently performing the tasks assigned to them in the job they agreed to accept, and are perhaps focusing their energies on advancing within their existing company or eventually finding a better job.

Coddling disgruntled workers who clock-in at their job and then walk off the work site is like an elementary school teacher focusing all attention on the few kids that are misbehaving and ignoring the students who are performing well. And no business management strategist would advise employers to focus on problem behavior while ignoring productive employees. When faith leaders bestow honor to a worker who seeks to undermine their employer, they make a mockery of the majority of workers who fulfill their responsibilities and play by the rules.

It undermines more skilled workers – As well intentioned as the faith leaders’ efforts might be as they try to exhibit empathy for low-skilled, low wage earning workers, they are slapping many skilled workers in the face. It’s as if members of the clergy have no comprehension of the struggle many Americans willingly face in order to get themselves educated, to develop new skill sets, and to remain viable in the marketplace.

The minimum wage debate strikes to the heart of this struggle. As they stand with striking fast food workers who demand a fifteen dollar an hour wage, many faith leaders appear clueless about how many other kinds of jobs in our economy require education, degrees, and certifications, yet don’t pay much more than fifteen dollars an hour.

Take “I.T.” technicians, dental assistants, teacher’s aids and medical assistants as examples. People who work in these fields usually have to take courses, pass tests, and acquire certificates and licensures in order to qualify for a job in their field, and they often spend hundreds if not thousands of their own dollars to get appropriately trained. Yet many of them earn wages in the $10 to $25 an hour range – in some cases not much more than what disgruntled fast food workers are demanding.

When faith leaders argue that workers with low skill levels are deserving of the same or nearly the same wages as workers who have sought to develop their skills, they undermine people who have disciplined themselves and have pursued the difficult task of self-development. It is saddening to see faith leaders ignore this.

It fails to address the real problem – Unless you’ve been living under a rock for the past couple of years, you’ve probably heard about the tremendous economic success of specific regions around the U.S. Take for example, North Dakota. This little state is in the midst of a big economic boom that has produced low un-employment and wages for many low skill workers that are well over the mandated minimum wage.

That’s because the people of North Dakota have wisely chosen to utilize their natural resources – oil in particular – and to sell that resource around the world. The oil-based energy industry is creating genuinely new wealth in that state, which has in turn elevated wages in nearly every sector of the economy (even at Wal-mart!).

The problem of low wages will not be solved by merely seeking to re-distribute increasing portions of wealth out of the hands of the few and into the hands of the chosen – as the demand for a higher minimum wage does. Rather, the problem will only be addressed when Americans begin to understand the key ingredients that required in an economy that creates wealth and prosperity for all.

Will America’s faith leaders begin to learn what those ingredients are? Or will they simply continue to pursue some arbitrary understanding of “fairness” while not understanding the slightest thing about economics?