Should fast food workers make $15 per hour?

I think we can all at least agree that this looks delicious

I think we can all at least agree that this looks delicious

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”.

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The moral case for good public services

I’ve been working in New York City for the past several months (taking the train in from Connecticut), and I must say I’ve been thoroughly unimpressed. It’s not that I dislike New York in general. I used to love coming for fun when I was younger, and there are still aspects of the city that I find truly unique. The food, for one, is superb. Never mind New York’s restaurant culture; what you can often get out of the side of a truck can be equally impressive.

But the day-to-day of commuting in and out of New York has been disenchanting. The air in the city sometimes smells awful. The people hustling to and from work are often rude. My walk from the train to my office is incredibly noisy, even at 7:15 in the morning (I usually listen to a podcast or the radio, and often can’t hear what’s going on with the volume cranked up all the way). And in the summer it can be oppressively hot and humid, especially in the train station, meaning that these days I’m damp with sweat by the time I walk in the office. I can already hear myself sounding like Mister Complainy Pants here, which I’m not proud of. I realize that lots of people have uncomfortable commutes, and I often remind myself of the need to be grateful simply to be employed. But I’d be lying if I told you that New York wasn’t starting to get on my nerves.

The thing that’s become a symbol of my commute into the City, which is the whole point of this post, is the escalator at the 47th and Madison exit from Grand Central that I take every day. It’s broken, and by that I mean that it is out of commission while it undergoes renovation… a renovation that is scheduled to take up to three months.

Maintenance on the 47th and Madison escalator (left) and the private escalator that's replaced it (right)

Maintenance on the 47th and Madison escalator (left) and the private escalator that’s replaced it (right)… Unexpected symbols of public services’ slow demise

Lately I’ve been thinking a lot about this escalator (pretty lame, I know). Specifically, I wonder how many people must pass through that exit from Grand Central every day into Midtown Manhattan, and whose commutes are impacted in some small way by its unavailable status. How is it possible for this thing to be out of order for this long?

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Some thoughts on Martin Luther King and economic justice

Recently I was driving home late at night from a long road trip, flipping around the radio dial. Randomly, I stumbled upon a radio station playing a speech from Dr Martin Luther King. It turned out to be his famous speech, “I’ve Been to the Mountaintop“, delivered in April of 1968.

This speech is famous in part because it was Dr King’s last public address. He was shot dead the following day in a Memphis, TN motel. Almost prophetically, King wrapped up his speech on the eve of his death with these words:

Well, I don’t know what will happen now. We’ve got some difficult days ahead. But it doesn’t matter with me now. Because I’ve been to the mountaintop. And I don’t mind. Like anybody, I would like to live a long life. Longevity has its place. But I’m not concerned about that now. I just want to do God’s will. And He’s allowed me to go up to the mountain. And I’ve looked over. And I’ve seen the promised land. I may not get there with you. But I want you to know tonight, that we, as a people, will get to the promised land. And I’m happy, tonight. I’m not worried about anything. I’m not fearing any man. Mine eyes have seen the glory of the coming of the Lord.

I had never heard the famous “Mountaintop” speech and I found it powerful and haunting for the obvious reasons. But a couple of other themes struck me, themes which I think resonated with me in particular as a Baha’i.

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Who exactly are the “job creators”?

If you follow American politics, you’re probably familiar with the term “job creators”. This term, which is essentially a euphemism for the wealthy, is used to argue that taxes on the top income earners should remain low (or even be lowered further). As the argument goes, rich people are society’s innovators, investors, and business owners. If we take away their capital or reduce their incentive to earn, then this class of individual will stop producing jobs for the rest of us.

As is often the case, it is convenient for the news media to frame the argument in adversarial terms for the purpose of entertainment. For example, a couple of weekends ago CNN pitted two individuals against each other to debate whether the wealthy or the middle class were the ones responsible for job creation.

On the one hand:

[The world] is awash in capital. What we lack today are consumers. The only reason any company invests, the only reason any company hires someone is because they believe they’re going to have a customer for that. Look. Anyone who’s ever run a business knows that a capitalist hires more people only as a course of last resort when there are no options available other than meeting increasing demand from customers.

And on the other:

[I]f you don’t have the investment in place first of all you don’t get the consumption after the fact… what matters is how much income you’ve created. And we are creating way more income at the median than Europe and Japan are creating. And that is because innovation is driving our economy.

But there is no class conflict here, and no legitimate intellectual debate as to who creates jobs. That’s because everyone does; the economy is an ecosystem made up of various people who come together and play different roles. One individual invents a product. Another individual puts forth the capital for its production. Another lends his labor towards building it. Someone else distributes and sells it. And at the end of the supply chain, someone must be there to buy it.

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Bill Gross is surprisingly profound

Someone recently forwarded me Bill Gross’s monthly investment outlook for October, which was surprisingly funny this time around. For whatever reason, he spends the first five paragraphs talking about how grossed out (no pun intended) he is with his own body, and how the bloated and misshapen body of an aging man is an apt metaphor for the present state of the world’s developed economies. It is not every day that I laugh out loud at work while reading an investing newletter.

I don’t always agree with Gross — there’ stuff in this particular newsletter itself which caused me to cringe, including his matter-of-fact assertion that “China and ‘cloud space’ have favored cheaper consumption, but have been decidedly job unfriendly in developed economies if observers were to be honest about it.” In another place, he basically blatantly endorses protectionism as a way to create jobs.

But he makes a point in this month’s letter which is remarkably rare among investment managers, specifically on the very tenuous equilibrium of strong US corporate profits but poor economic outcomes for the American worker. Gross’s ominous conclusion is that ultimately, this will come back to bite capital as well as labor. He writes:

Ultimately, however, both labor and capital suffer as a deleveraging household sector in the throes of a jobless recovery refuses – if only through fear and consumptive exhaustion – to play their historic role in the capitalistic system. This “labor trap” phenomenon – in which consumers stop spending out of fear of unemployment or perhaps negative real wages, shrinking home prices or an overall loss of faith in the American Dream – is what markets or “capital” should now begin to recognize. Long-term profits cannot ultimately grow unless they are partnered with near equal benefits for labor. Washington, London, Berlin and yes, even Beijing must accept this commonsensical reality alongside several other structural initiatives that seek to rebalance the global economy.

And, later, my favorite line to finish it off:

Karl Marx might have put it this way… “Investors/policymakers of the world wake up – you’re killing the proletariat goose that lays your golden eggs.”

Some people ask what the problem with growing income inequality is if the bottom of the income distribution is improving over time, even though not as quickly as the top. After all, shouldn’t we be looking at the rate of progress in absolute terms, not in comparison with others? As for the answer to this question, let’s put aside for a moment the fact that real wages in the US have been stagnant for the past generation for a large segment of the American labor force. Even if the bottom and middle had been moving upwards while the gap between them and the rich were expanding, what’s the problem? The problem is not just one of fairness and ethical norms, which not everyone agrees on. It’s that eventually, society gets so warped that its basic functionality is impaired, and no one including the rich is able to prosper in that environment. It’s like a body on steroids, where the liver and kidneys fail to keep up with the massive growth of the muscles, eventually killing the body itself.

This is a central Baha’i theme — the welfare of each individual is tied to the collective welfare of the entire human race — and is beautifully summarized in Baha’u’llah’s letter to Queen Victoria, one of his many letters written to the prominent heads of state of that era.

Regard the world as the human body which, though at its creation whole and perfect, hath been afflicted, through various causes, with grave disorders and maladies. Not for one day did it gain ease, nay its sickness waxed more severe, as it fell under the treatment of ignorant physicians, who gave full rein to their personal desires and have erred grievously. And if, at one time, through the care of an able physician, a member of that body was healed, the rest remained afflicted as before. (Summons from the Lord of Hosts, p. 90-91)

Let’s treat the whole body, and wake up to the reality that rising inequality is ultimately disastrous for everybody.

“We should remember that obeying the laws of God also means working together to build a better world where people will not be poor anymore”

My wife and I recently started a junior youth group, which for those who don’t know is just a group of young kids (in our case ages 13-15) studying and discussing spiritual and moral principles based on the Baha’i teachings, with an aim towards putting those principles to work in the form of service. There are a handful of text books from the Ruhi Foundation that junior youth group leaders commonly use, and the one we’re using right now is called Drawing on the Power of the Word, which mostly contains hypothetical stories of ordinary people interacting in different scenarios, followed by snippets from the Baha’i Writings and questions for discussi0n.

The last story we read struck me as pretty remarkable. In it, several individuals are talking about spiritual progress vs material progress and how these related to one another. Let me share with you the dialogue between the characters first before anything:

Antonio: I don’t believe that to be happy you have to be rich. I know many poor people who are happy.

Carlota: My brother is on vacation from the university, and he says that the rich invented the idea of “the happy poor” to keep us content working for them.

Ana Maria: That may be true, but I know that happiness comes from the inside and does not depend on how many things a person owns.

Diego: But still, it sure isn’t much fun to be poor. We should do our best to improve our lives.

Antonio: But we should be happy while we are trying to do this. I want to work hard for myself and for my community, but I also want to feel happy doing it. I used to enjoy spending time with Carlota’s brother, but ever since he started talking about the rich and the poor I don’t like to listen to him. He’s so full of anger.

Roberto: I know that real happiness comes from being close to God and from obedience to His laws.

Diego: That’s true, but we can’t forget that to love God we should love our fellow human beings and help them.

Carlota: And we should remember that obeying the laws of God also means working together to build a better world where people will not be poor anymore.

It is amazing to me how succinctly this simple dialogue explains something so profound: That the purpose of life is nearness to God, but in order to gain that nearness here on earth one must help others to avoid material misery.  In one breath Baha’u’llah tells us that the “world is but a show, vain and empty, bearing the semblance of reality”, and in another tells us that the “beginning of magnanimity is when man expendeth his wealth on himself, on his family and on the poor among his brethren in his Faith”.

The other amazing thing is how quickly our kids got it. There was no phony intellectualism, just an honest conversation that had more depth than most university classroom discussions I have been a part of. It’s funny how rarely we ask questions like “Does being poor or rich make a difference in one’s happiness?”, “Is it sinful to be rich?”, or “Is it commendable to be poor?”, even as adults. Young people are ready, perhaps even more so than fully formed adults, to think openly about these ideas. Let’s get cracking.

The Tree of Wealth

I’ve always been fascinated by this passage from Baha’u’llah’s Hidden Words. For those who are unfamiliar, this is a volume of mystic verses written by Baha’u’llah in the 1850s after he was exiled to Iraq, written as if God is speaking directly to the reader. This particular passage is verse #49 of the Persian Hidden Words:

O CHILDREN OF DUST! Tell the rich of the midnight sighing of the poor, lest heedlessness lead them into the path of destruction, and deprive them of the Tree of Wealth. To give and to be generous are attributes of Mine; well is it with him that adorneth himself with My virtues.

What else can better capture the Bahai perspective on wealth and poverty? I feel there are thousands of meanings to be extracted from this short passage, but the most powerful to me is the notion that true “wealth” is in fact found in caring for our fellow human beings. It is a warning to all of us not to waste this rare moment on earth and lose our opportunity to gain that blessing.

I’m curious to hear how others find this passage and what it means to them. Leave a comment and share your thoughts.