A couple weeks ago fast food workers across the US started staging walk-outs in protest of their low wages. These workers want a “living wage”, they argue, and have targeted $15 per hour across the industry.
This story is a pretty interesting one from the point of view or economic justice and the Baha’i teachings. That’s because the demand for a higher wage forces us to ask a critical question: If the market sets wages too low for a particular group of people from the point of view of our own moral judgments, then is it right simply to mandate a higher wage?
This is a common question, especially among Baha’is and other people who seek economic security and dignity for all people. Usually, it’s asked in the context of developing countries, where wages are much, much lower than even the minimum wages here in the US and the rest of the developed world. Let’s imagine that the market pays Malaysian factory workers $2/hour and their American counterparts $20/hour. Is it morally wrong for companies to hire Malaysians at this lower wage? Does it constitute “exploitation”? Does it violate basic moral principles of fairness and justice? Should it be law that Malaysians make the same wage as Americans?
Many fair-minded, well-intentioned people believe the answer is yes to the questions above. The logic is clear: To make just $2/hour is horribly poor by the standards of developed countries, and if it would only be fair to treat everyone equally, then why not pay everyone a higher, “living” wage?
The Baha’i Holy Writings make no specific judgment on this particular issue, even though they teach that all human beings are equal in the sight of God, stand for justice in all arenas of society, and call for an eradication of extreme poverty (as well as extreme wealth). ‘Abdul-Baha did in fact hope “that laws be established, giving… workmen the necessary means of existence and security for the future”. But he also warned that “difficulties will also arise when unjustified equality is imposed”.
So, even as we desire morally for extreme poverty to be alleviated, there is a scientific question of how to achieve this goal. And in my opinion, I’d say that the imposition of a $15 wage floor for fast food workers isn’t the best approach. That’s because forcing the price above its market level is bound to create some adverse impact somewhere else. For instance, fast food companies may find it more cost effective to automate what they do, which means replacing some workers with machines. It may mean that some talented individuals are pulled towards working in fast food, rather than some other productive work. Or it may simply mean a higher cost of meals for those who actually depend on fast food because of a tight budget or a busy schedule.
The point is, simply targeting an economic outcome that we don’t like and attempting to change it by fiat is more often than not a fool’s exercise. What we care about here is not fast food workers, per se; it’s helping all people at the bottom of the income spectrum to achieve better-quality living standards. We need to do this right.
There are more economically-sound, less distortionary ways to deal with this issue than forcing wages upwards. Note that while we’re arguing over fast food, there is a larger debate going on in our Houses of Congress here in the US on things as basic as food stamps, subsidized early childhood education, and grants for college for those who can’t afford it. One way or another, as a society we are going to (as we should) collectively pay some money to help others achieve a better living standard. The way I see it, I’d rather strengthen — or, at least, avoid the destruction of — that institutional structure of support that the working poor currently rely on, rather than simply subsidize the labor of fast food workers.
Once again, that is my point of view as a) a person who’d like to raise the welfare of the poor and b) an economics nerd who’s interested in finding the best way of doing exactly that. Other people who fit into both of these categories may disagree with my conclusions, of course, but that’s the point of debate among people who share a common goal and are open to whatever works. As the Chinese premier and reformer Deng Xiaoping famously said, “I don’t care if a cat is white or black, as long as it catches mice.” In the case of poverty in America, we all want to catch mice, but it’s important to find the right cat for the job.