Suppose that you are an accountant at a defense contractor working on a really hush-hush but very exciting new project to protect Earth from pesky flying saucers.
Then you go out and get married. You’re a good Catholic, and you and your wife want to have kids right away, and you do! Soon you have a bouncing baby bundle of baptized joy.
Now, accountants make a good bit of money, but with the new family, it’s time for a raise.
You go to your boss and point out that Catholic social teaching holds that in determining a just wage, both the contributions and the needs of an individual must be taken into account.
Being a good Catholic himself, he happily agrees. After all, he point out, you’re a good accountant, you have on-the-job knowledge of how this company works, and it would be harder to go out and get and then break-in a new accountant than to accomodate your request for a raise.
You’re now making (a bit) more than the other accountants in the department, who are all single (for some reason).
Then you’re abducted by aliens.
They brain-poison you so that your sense of personal prudence is severely damaged.
You’re still an ace #1 crackerjack accountant–one of several in your department–but when it comes to your personal finances, you’re now a total nitwit.
So you go to VegaVegas and rack up hundreds of thousands of dollars in gambling debts.
You purchase a lavish mansion and a Rolls-Royce.
You adopt twenty-five special needs babies who require extensive medical care.
You purchase every product from every Internet advertisement that you run across.
Soon you need a warehouse for all the political T-shirts you have.
But then one last little prudence neuron that the aliens missed is able to send you the message that your current needs outstrip your current salary and it’s time for a raise.
You go in and explain that since your last raise, your needs have grown dramatically. The size of your new family and its medical needs alone–besides all the gambling debts, Internet purchases, and the mansion–severely outstrip your salary.
Since Catholic social teaching says that your needs as well as your contributions need to be taken into account in determining a just wage for you, you are confident that your boss will give you one.
But he doesn’t.
Though he is a good Catholic himself, your boss (whose prudence-center is still intact except when it come to building fighterplanes out of toothpicks and glue) argues that your needs now so vastly outstrip your contributions that the business cannot possibly comply with your request.
You disagree and shove the Catechism of the Catholic Church under his nose.
He suggests that what the Catechism says is meant to express a goal that ethical business should set for themselves–paying everyone a wage able to sustain them and their families in at least a modest and dignified lifestyle–but that it does not mean that an employer is called upon to pay employees what is required to cover the kinds of massive needs that you have that so vastly outstrip their contributions.
He further points out that it would be irresponsible and contrary to the virtue of prudence for the company to try to pay you the wages that you now need. With those wages it could hire not only an accountant just as good as you who doesn’t have such massive needs, it could also hire more line workers and allow them to make a decent living while they crank out even more of the toothpick fighterplanes that the nation so desperately needs in its conflict with the flying saucers.
To the extent that you have massive needs that vastly outstrip your contributions, these should be dealt with by a common entity–such as the state–in keeping with the common destination of goods. They should not fall on a single, individual employer.
He suggests that you either
A) Develop a new technology that will make you as rich as Bill Gates, or
B) file for bankruptcy protection under the provisions of civil law, return the special needs children that you have adopted to the custody of the state, sign papers turning control of your finances over to you un-brain-poisoned wife, and seek the help of neurosurgeons and psychiatrists.
What does this teach us?
That you should go buy How I Did It by Bill Gates?
That there’s a misprint in the Catechism of the Catholic Church?
That your boss is a cruel man who is in disobedience to Catholic social teaching?
No, but it does teach us that the needs-and-contributions formula is not meant to suggest that employers are to disregard the costs associated with accomodating a particular employee’s financial needs. While the needs an employee has play a proper role in his remuneration, the employer is not required to foolishly use his money to cover the needs of individuals who have made life choices that result in financial needs that dramatically outstrip the contributions that the employee makes.
The contributions that the employee makes–the value of the work he performs and not his personal needs–are the primary determinant of a just wage. His personal financial needs, while they should be taken into account, play a subordinate role.
In the real world, a person’s financial needs may be vastly greater than the value of the work he does–or vastly lower than the value of the work. Employers are not required to pay massive-need workers wages that are vastly inflated compared to the value of their work. Neither should they required to pay minimum-needs workers wages that are vastly less than the value of their work.
For employers to behave otherwise–to allow need rather than value to be the primary determinant–would completely disrupt the market mechanism for determining economic value, and thus would completely disrupt the economy, to the harm of all.
Thank you, that clarifies the concept in a delightful way.
The contributions that the employee makes–the value of the work he performs and not his personal needs–are the primary determinant of a just wage. His personal financial needs, while they should be taken into account, play a subordinate role.
Not that I disagree with the paragraph, but I’d like to see how that’s spelled out in Catholic social teaching. Experience has taught me that liberal Catholics would claim that this paragraph is not in accord with Catholic social teaching.
Peace be with you,
Bob
Nice poison pill Jimmy.
1) Since when is gross gambling a need?
2) Charity, the care of the 25 special needs kids, is an obligation of society regardless of who does it. The employer specifically is not called to provide the brunt of this charity according to social and church norms.
The contributions that the employee makes–the value of the work he performs and not his personal needs–are the primary determinant of a just wage. His personal financial needs, while they should be taken into account, play a subordinate role.
And they say capitalism isn’t dehumanizing.
Jimmy is right on: workers desire a dignified wage: a wage consistent with the value of the work done. A wage that is too low is undignified and dehumanizing; but a wage that is too high is charity and also dehumanizing in the context of wages for work. Workers don’t want wages to be charity. The mechanisms of a fair and regulated free market are the best tools for determining this value/wage sweet spot.
How could I, in justice, ask an employer to pay me more than my work is worth? If he doesn’t profit from my work, the whole thing falls apart.
Jimmy, are you being serious? Is this a joke? What a gross caricature of what is actually happening to real people out there. Forgive me for seeming to overreact, but this is exactly what I am being wracked over right now. Gambling debts? Pathological adoptions? These are needs? Hells bells, why not just posit a man who shoots 26 people and then needs to hire 16 NY lawyers at $ 450,000 an hour, and then berate HIM for claiming to his boss that he has high $ needs. A Rolls Royce? How does that help me think through my situaiton? Get real here: I have two cars, both bought used, one is 10 years old, the other is 21. Both are rust buckets. Should I feel guilty about asking for wage that, among other things, will help me get a car that can be driven on a highway? Golly, if this post was not a joke, it was terrible disservice to people who are living with the DINK enconomy, and are being crushed by it.
*enjoys watching the point fly far over everyone’s head*
I can’t help but think that you must be referring to Catholic families with many children who expect their employers to support their “extravagent” lifestyles. If not, please clarify because such thinking and comparisons are extremely offensive to faithful men and women doing their best to live out marriages according to Church teaching and make a living (also often in service to the Church). No gambling debts. No political T-shirt warehouses. Just the children God sends us.
I think you are missing Jimmy’s point…
When the guy has a kid, his boss justly gives him a higher wage, and that’s a good thing. To me, the implication is that a wage increase to support a family is good.
But then Jimmy shows how other things aren’t so great–he uses extreme examples, but the point rings true. If a factory worker decides to buy a sports car, he has done something gravely irresponsible. A sports car is not anything needful, and the value of the work he does is not proportionate to the cost of the sports car. Therefore, it would be unjust for him to demand more cash from his employer, and it would be unjust for the employer to give it and thus support his irresponsibility. Parents with large families should expect enough money to supoort their kids–but not enough money to buy every one of them a computer, cell phone, and car.
As far as the charity goes, I believe that it’s wrong to go so much into charity that you ignore your own needs–it would be gravely sinful if a Catholic father sent his entire paycheck off to Africa to feed starving children there, but then left his own family without enough money to buy food or pay mortgage and insurance premiums. An accountant adopting 25 disabled children with expensive medical needs is wrong. One or two, maybe, if he can afford it, but even then he should be expected to make monetary sacrifices for the charity rather than demanding a pile from his employer.
I did not miss Jimmy’s point, and I know a bit about rhetorical styles and domestic economics (even that such a term is slightly redundant). Perhaps I (and one or two others) are the only readers in America who would react negatively to the point(s) of the post and the manner in which they were made. If so, no big deal. But I rather suspect that A LOT of people are going to read the post as i did, and be quite put off it.
In this series I have been using deliberatel absurdist means of teasing out economic principles. This is to (a) try to make the posts more interesting than typical texts on economics and (b) try to think through the dynamics of economic situations using a different language than is normal since people either zone-out of boredome or adopt partisan positions when that language is used.
In this case, I am seeking to argue one point, which is the one stated at the end: The value of an employee’s work is the chief determinant of what he should be paid. If an employee has needs that are vastly above or vastly below what his work is worth, an employer is not required to inflate the salary to meet very high needs nor deflate it to meet very low needs.
In the post above, very absurdist examples are proposed for how one would acquire financial needs that outstrip what an employer could reasonably pay. It doesn’t matter how prudently or imprudently such needs were acquired. If you need $100,000 to send kids to college or to pay off gambling debts, it’s still a financial need that you have.
The point is not how the need came into existence and whether it has a praiseworthy or blameworthy origin. The point is that the need *exists.*
The means of generating financial needs in the piece are thus simply absurdist ways of creating a character whose financial needs clearly outstrip what an employer could reasonably pay. The financial needs of this character need to outstrip that in a clear fashion or the point will not be made.
There are no particular real-world groups of people I’m covertly talking about here. I’m trying to get at a matter of principle that may apply or not to different groups.
Thus to take Danielle’s example of those with large families, I am not at all opposed to large families. I have written extensively in favor of large families, and I only wish that I was so fortunate as to have one myself.
If one does have a large family, more power to you! We need more large families!
Such families also have to make their life choices prudently. They either have to live in an extremely frugal fashion on an average salary (since average salaries are no longer designed for even *complete* families, much less large ones) or they must prepare themselves to do the kind of work that will bring in an above-average salary.
Individuals who have financial needs because of their family size, whatever it may be, should definitely let employers know what their needs are and should not be guilty about that in the slightest. On the contrary, they should be proud of what they have done by cooperating with God in bringing new eternal beings into the world and the work they are doing now by raising them in a Christian fashion.
They need to be shrewd as serpents in positioning themselves financially, though, because today’s two-income/no-kid economy has not made it easy for them. It has made it very, very hard.
Obviously, real life situations do not have such extremes. A more common situation would be the employer refuses a just raise to employees because the employer has extravagant needs and debts, eg state and Federal govt. Even though inflation marches on.
Ed Peters,
You have every right to ask for a raise and, depending on circumstances your employer has the responsibility to assess, your request may be justifiably denied.
I rather suspect that A LOT of people are going to read the post as i did, and be quite put off it.
If that is so, then I humbly apologize. The intent was not to offend but to help people think through economic principles in a different way than usual.
I am perfectly willing to concede that I am not a perfect writer and that I do make mistakes in how to get points across. If I have expressed myself in a way that has given offense, I very much regret that, and I apologize.
The reality for most people in need is that they don’t even feel safe asking for this. Listen, even many people making middling incomes feel unsafe in asking for more.
And that environment is not consistent with the Catechism.
Aw shucks Jimmy, everybody does that sometimes. If time permitted (I’m catching a flite) I’d get right to basics, like your implication that there is something objectively determinable called “value” in the first place, or that hyper-caricatures such as yours can be prudently used in discourse. But as GKChesterton oft observed, arguments need not be quarrels. I rarely quarrel (anymore) but I’m game for arguments ‘most anytime. Except when it comes to Jimmy Akin (or Mark Brumley over at Ignatius Press). Those two I think twice about taking on. This time, you deserved argument. Gotta go.
Thank you for this awesome post, Jimmy. Catholic social teaching can sound so um, socialist sometimes, but you actually make it sound reasonable and in line with the natural laws of economics.
Ed Peters implies that there is no “…objective determinable called “value”…”. He’s right. The point of Catholic teaching on proper wages is that employers have the responsibility to assess all the things that go into keeping a business viable, including the needs of employees, and making a judgment call as to the wages to be paid. This means that sometimes a request for a raise can be justifiably denied even if the needs of the employee are entirely legitimate. In addition to a judgment call on wages, an employer has the responsibility to try (again within the constraints of keeping the business viable) to make his employees more productive so that a wage increases may follow.
Where I work we did have an individual ask for a large raise because he had just bought a really nice and expensive truck one that was not needed for work he just likes big, nice expensive trucks. Needless to say that was not used as a basis for raise discussion.
What is really interesting in this whole dialog is the butting of heads of capitalism and socialism. Hmmm…I wonder where the perfect balance is?
Even thought the examples Jimmy used were CLEARLY absurd (which means they should not be analyzed as if they were rational) there are analogies to this sort of behavior in real life.
Many, maybe most, modern families simply don’t take the time and trouble to critically look at their spending and credit habits or lifestyle choices. They have never been trained to do so. They may not rack up gambling debts, but many rack up large and unnecessary credit card debts. They want a house big enough for a family twice their size. They find eating out easier than meal planning and cooking (not to mention cleaning up!). Their kids want all the latest electronic doo-dads. Mom or Dad get tired of their car and want a new one.
I am not judging anyone, here. My own family has been guilty of most of these kinds of things at one time or another. I am saying, though, that supporting a family has always required sacrifice and discipline. I would find it difficult to ask an employer to pony up a raise just so my kids could afford to buy at GAP.
Ed Peters implies that there is no “…objective determinable called “value”…”. He’s right.
He is indeed. Which is why I didn’t invoke such a concept.
I spoke not of objectively determinable value but simply value. As I pointed out in the first post in this series, value is determined “on the part of the buyer (at least in the sense of the word that I’m discussing). Buyers who place more value on a product will pay more for it.”
This applies whether the thing being sold falls into the category of goods (like fighter planes) or services (like accounting work).
The economic value of something cannot be objectively determined but only subjectively. Failure to appreciate this fact has led to tremendous human suffering by attempting to establish objective values for things and getting the economy severely out of balance.
Jimmy,
I didn’t mean to imply that your post invoked the concept of objective value. I think your analysis is correct and very helpful.
Two things came to mind as I read Jimmy’s post:
First the previous post “The Specialist” regarding the Dr. hiring a secretary for the purpose of becoming more efficient, seeing more patients and making more money. And Second, Jesus’ parable of the vineyard owner hiring workers throughout the day.
It would appear that the situation in Jesus’ parable is that there is a glut of laborers (since there are so many throughout the day un-hired). The owner paid what appeared to be the standard wage for a days work. I wonder how that wage was arrived at? Could it be that the existing (religious) society determined that this was the minimum wage required for dignity and basic human need? Could it be that this was the minimum wage paid to avoid attack from the large pool of laborers? It would appear that there were enough idle men to allow for a lower wage negotiation. Although the parable has a different meaning it is also interesting to note that the “good” employer payed a full days wages to all. It would seem that this would imply that he considered this wage to be basic for human need.
In Jimmy’s example the accountant indicates that $15 is a secretaries wage, while the Dr. makes $70. ow much higher a wage would the Dr. pay and still consider it worthwhile? If the secretary has a child perhaps the Dr. should pay her more. However when the Dr. is selecting a secretary would the Dr. hire and pay more for one that has a child? Perhaps some additional items to ponder.
Thanks Jimmy!
I totally had this same conversation with a friend last weekend!
She was wondering if a co-worker of ours is making more money now that his wife had a baby. I said that that sounded illegal to me. Our boss could always give him a raise if he thought the guy was worth more anyway. But the real way for him to make more money is to leave the university (low pay) and go work in industry (higher pay). If he chooses to stay in an institution that has a lower pay scale, then that’s his own problem. If he wants more money for his family, then he needs to go find a new job (which another of our people actually did). This is a free country! You’re allowed to look for a better/higher paying job.
One way that this happens all the time is that employers spend more money on benefits for employees with more dependents. I have heard young single employes complain bitterly about this.
It should be noted that many employers consider emplyees that are married with children, to be on average better, more stable and more honest employees. And therefore, worth more.
I think some of the anger came from the juxtaposition of the two posts. The secretary previously was too cowardly to ask for more. If it was really absurd she would have countered. His recent post also takes a pro-employee stance. Good capitalism works both ways. He needs to stop employee perspective stories and try to write and absurdity from the employee as “good capitalist citizen”.
Shoulda’ been “takes a pro-employer” stance and “stop employer”. Stupid spell check.
I will attempt to be brief. While certainly some Catholics erroneously believe in socialism, the contra position to capitalism is not socialism. The term is Distributism. Writers such as Belloc and even JPII considered Communism as a logical extension of capitalism, not as an antidote. I would strongly encourage others to read Belloc or for the more academic, read Rerum Novarum. Chesterton also writes of this.
There seems to be a misimpression that Catholic teachings deny “economic truths”. They most surely do not. The benefits of unmitigated market effeciency are seen as lesser than the need to recognize the dignity and autonomy of the human person. The seeming contradiction between JPII’s anti-capitalism statements and his anti-welfare statements can only be understood by this, because both destroy human dignity. The key per Catholic social teaching is that each person needs to have property to provide for themselves. Otherwise, the person is dependent upon the welfare of the state or the industrialist to provide for their basic human needs. This is seen as against human dignity.
I cannot stress enough that unmitigated capitalism has been expressly condemned by the Church. Before people dissent from the Church on this, I implore people to read the Church’s documents on this topic. Like Humanae Vitae, many will find that they agree with the Church having done so.
I have heard young single employes complain bitterly about this.
Not to mention gay people in homosexual unions who think their relationships are somehow equivalent to heterosexually married couples with children.
I’d just like to see an employer try to determine pay based on an employee’s need without getting the pants sued off of him (or her).
Can you imagine a company paying employees who are the primary breadwinners in their families (probably mostly men) more than those employees who are the secondary earners in their families (probably mostly women)? No doubt they’d be sued out of existence for institutionalized sexism with a 10 kabillion dollar punitive settlement awarded by some wacko jury or wacko judge.
I cannot stress enough that unmitigated capitalism
Where on Earth is capitalism unmitigated?
A few years ago, First Things ran a good article on just wages.
http://www.firstthings.com/ftissues/ft0102/opinion/worland.html
Before people dissent from the Church on this,
Who’s dissenting from anything?
I implore people to read the Church’s documents on this topic.
Why do you assume we haven’t read them?
The key per Catholic social teaching is that each person needs to have property to provide for themselves.
You mean something like an “ownership society”. Now where have I heard that before?
BillyHW,
Many “conservative” Catholics dissent from these teachings. For instance A Reader‘s comment Catholic social teaching can sound so um, socialist sometimes. If I were to elaborate further, I would add those with anti-union feelings. I could add any of the comments suggesting that a person is imprudent for having children.
Why do you assume we haven’t read them? No one has bothered to quote them for starters. The defensive postures suggesting that those that aren’t pure capitalists are socialists. The ridiculous treatment of humans as interchangeable parts.
Ownership Society The Ownership Society is the continuation of our current Ponzi scheme. It is a welfare/retirement program, just different accounting. Without understanding what a wage-slave is, I would take an excessive amount of space to make my point.
I don’t think anyone has even remotely suggested that humans should be treated as interchangeable parts.
I have read much of Chesterton’s comments on distributism with interest, and I am thoroughly in symapthy. But I have a sense that even if we could find a just method of redistribution of property (which is the tricky part) it would all come to nothing.
Let’s say we could find a way to distribute property so that everyone had an exactly equal share. Human nature being what it is, coupled with an unequal distribution of human gifts and intelligence (not to say virtue), isn’t it extremely likely that things would go all out-of-kilter again before very long? If we are to live as free people it most assuredly would.
Belloc in particular emphasises that having equal opportunity will not provide for equal outcome. Some would certainly enjoy a vastly better lifestyle under distributism. The poor will certainly always be among us. At least under distributism the poor are provided the opportunity to determine their survival. Guards against monopoly would have to be stringently enforced to prevent a reversion to where we are currently.
In regards to treating humans as interchangeable parts, if you follow any free trade argument, the person will posit why should a company be forced to pay an American what a Mexican (pick whatever 3rd world country you would like) is willing to do for a tenth of the cost? Similiarly, why should a company have to compensate a person with ten children when they can find a person without children for less? Distributism and for that matter Catholic teaching answer these by stating the interests of the community come first. The Church certainly doesn’t discourage charitable efforts in the 3rd World, but it does condemn the exploitation of the 3rd World.
But surely what they call “outsourcing” in the long run would tend to benefit everyone, elevating the standard of living in the poorer countries and leveling off that of the most prosperous; in other words, distributism.
Again, I don’t think anyone is arguing for an absolutely free market, just as you would not argue for an absolute distributist approach.
Distributism as an ideal is terrific. As a political program I think it could be disastrous, as it would seem to call for a continual state of upheaval. It could work, though the first step would be to make all of us into saints.
Evangelism, baby…
American is the most distributive nation that exists and ever existed. And what got is here is capitalism.
Distributism — at least whenever I have seen it advocated — does not maintain that there will not be variations in property. What it maintains is that the tendency should be to level it out.
Napoleanaic inheritance laws, for instance, are distributionist, even if estates aren’t the same size.
middle-east-sex
The primary ends of business must be to edify society. One can argue all they want that we live in a world Catholics must embrace (imagine if Athanasius followed that golden rule) but the Catholic is called to persuade society to conform to Christ.
Unfortunately today employers (depending on which companies, the employers are anonymous) are concerned with cost, as their primary goal is not contributing to society but simply profit. Employment to them is cost, not contribution to the final product, and as such (and since men are considered material) is meant to be lowered as any other facet of the company.
Pius XI warned against not only unjust competition which would cause other companies to close or lower wages (Quadragesimo Anno),but Pope Leo XIII (who should be a saint by now) insisted that self-ownership was preferable to employment. However, this last also advocated that when employment was necessary (construction, the railways, medical research) it should be co-operative; e.g. ’employees’ should benefit from the fact that owners need employees towards the means of production.
Certainly an owner is not morally (as economics is subject to it, contrary to what most Catholics believe today) responsible for the excesses of particular, extravagent employees. But we throw the baby with the bath water and suggest that because they are not they are exempt from providing a wage which allows a single householder member from affording a home (to own, not rent) and providing for a family.
Pax Tecum,
Gen Ferrer
First of all, discriminating for or against someone because of his marital or family status is contrary to federal law, and violates the law in many states and local communities.
My impression is that Catholics follow the law, at least where it does not conflict with the law of God. And if they do decide that the law violates the law of God, they must be prepared to suffer the consequences, for there surely will be some if a Catholic employer is guilty of employment discrimination.
Jesus told a parable about the vineyard workers, where they all got the same amount per day, regardless of the amount of the work they did. When questioned, Jesus clearly indicated that the wage was merely a matter of agreement between employer and employee. There was no discussion of “needs” in that parable.
As a single person, I say that your decision to get married, have children, and incur other expenses, is your decision, and you need to provide for them. If you cannot afford them, you should not have them. For the record, I am not advocating artificial contraception. A little self-control will do fine.
In any event, I should not be required to help pay for your voluntarily-chosen lifestyle, either through higher taxes or lower wages.
To allow a person, by manipulating his “needs,” to gain access to the employer’s pocketbook, is inconsistent with Christian principles.
The church should follow its own teaching in this matter. But no, instead of providing adequate retirement benefits for sisters and other religious, or even allowing them to participate in Social Security, it expects us to contribute to their retirement fund.
A church that is generous with everyone’s money except its own, especially as it relates to people (nuns) who have dedicated their lives to the church, does not inspire moral confidence.
Further, I know of a parochial school system that deliberately pays its teachers 85% of the prevailing rate in the public schools, thinking that the teachers should be willing to take less for the ability to teach in a parochial school. What about THEIR needs? What about the needs of the children, who are being subjected to an inferior brand of education over someone’s oddball cockeyed kooky notion of social justice? No competent self-motivated person is going to take 85% when he or she can get 100% down the street, especially if he has a family to support.
But I guess the church cannot be fair to the teachers or to the nuns, at least not in Los Angeles. They had to pay out $600 million to rectify the damage done by the pervert priests that they knew about and did nothing about.
And Los Angeles is just one example of the perversion and corruption that seems to rampant among the hierarchy of the Roman church. The problem is at least nationwide.
Not exactly what the Church teaches.
And resorting to the abuse payments (in LA or elsewhere) to make a point about just wages is a stretch, to say the least.
The church should follow its own teaching in this matter. But no, instead of providing adequate retirement benefits for sisters and other religious, or even allowing them to participate in Social Security, it expects us to contribute to their retirement fund.
You speak as if “us” and “church” are separate.