Thursday, March 28, 2013

Morality and the Minimum Wage

Minimum wage law is a hot issue in New Jersey, with Governor Chris Christie recently vetoing a minimum wage hike, saying it's to large. Business owner Carissa Borraggine weighed in with a NJ Star-Ledger guest column titled I Pay Real Wages. Shouldn't Everyone? It's an interesting column, in which she describes how paying her employees "decent wages" is actually conducive to a profitable business. Some revelation! "[T]he truth is," she writes, 

...providing decent pay does wonders for my bottom line.  
Workers at Harvest Table are happier to come to work, so they actually show up. I deal with very few unexpected and unexplained last-minute absences, and less turnover than many other food establishments, both of which save me time, stress and, yes, money.

She also notes that "most small business owners ... already pay more than the state minimum [wage]."

Borraggine is making a good economic argument against minimum wage laws, except that she goes on to advocate for passage of a New Jersey constitutional amendment to raise the minimum wage and lock in permanent cost-of-living increases. (As if minimum wage laws aren't bad enough, NJ politicians want to lock in minimum wages by constitutional amendment. As I previously explained, this is a very bad idea.)

Borraggine falls victim to a classic trap; the alleged dichotomy between the moral and the practical, fostered by the morality of altruism. Before explaining how the wages she pays is motivated by her own self-interest, she writes:

I pay all my workers much more than the state’s mandated minimum wage of $7.25 an hour. They are real, hardworking people, after all — don’t they deserve real wages? 
Many of my employees are working to get ahead and to raise families. There is no realistic way they could do this if I paid them minimum wages of $7.25 an hour. Especially here in New Jersey, where a dollar just doesn’t go as far as it would in most other states because of the high cost of living.

Just prior to her statement that "providing decent pay does wonders for my bottom line," she writes, "But my reasons for paying them fairly go beyond morality."

Somehow, the fact that paying her employees is good business is not enough of a reason to make it a moral decision. It must be justified on altruistic grounds, which leads her to assure her readers that it's not just her own benefit that she's concerned with. After all, that wouldn't be moral. To demonstrate her moral credentials, she assures us that "Luckily, there was one choice I never had to even think about: what to pay my workers." 

If you want to see the corruption altruism wreaks in a person's mind, just look at the hoops Borraggine tries to jump through to assure us that she really, really isn't selfish.

If you ignore Borraggine's moral acrobatics, the logical economic conclusion one can draw from her article is: The demands of the market foster good wages for the most responsible and productive workers, without benefit of minimum wage laws. And the logical moral conclusion to draw is that yes, it is in a businessperson's self-interest to reward productiveness, as she makes clear. 

So, why her support for a very bad law? Draw your own conclusions about her motives. 

I left the following comments:

Morality ends where force begins, so the last argument Ms. Borraggine has the right to stand on is the moral one. When she says she wants to force on all other businesses her idea of "fair" wages, she is upending a basic principle of a free, civil society--respect for the right of every individual to act on his/her own judgment, and to associate/contract freely and voluntarily. 

Ms. Borraggine actually makes a good case for how to run a thriving business. She pays her employees no more and no less than what they are worth to her, which just happens to be above the legal minimum wage. Her employees are happy with the wage, so they are dedicated and turnover is low. Her customers are happy and her business thrives, thanks to her competent management and dedication to providing good food and service. Notice that it's all based on voluntary agreements to mutual advantage, with each acting freely in accordance with his own rational self-interest. This is not "beyond morality." This is morality.  This is the market at work.

But what if some community thugs, at the behest of some other businesswoman, demanded that she, under threat of physical force, pay more than her employees are worth to her? No one has a right to do that to her, and neither does she have a right to do that to others by using the government as her hired gun. The proper purpose of law and the constitution is to protect every individual from community thugs, not to give them cover; to protect rights, including liberty of contract, not to violate rights. 

Borraggine's vague rationalization's like "even the playing field" or an "obligation as a country" or high-and-mighty declarations of "caring about our state's lowest-wage workers" are sugar-coating  for injustice; the belief that some may force their judgment on others--or, as Ms. Borraggine arrogantly puts it: "I pay real wages, shouldn't everyone?"

Related Reading:

Minimum Wage Doesn't Belong in the Constitution--or Law

End, Don't Raise, Minimum Wage Laws


Mike Kevitt said...

It's true that morality ends where force begins. I add, for what it might be worth, that this statement, by definition, refers to initiatory force and not to retaliatory, and this is important. Morality picks back up with the 1st. physical counter blow in defense.

You also say law & gvt. is to protect rights, not give cover to crooks violating them. Here, I'm being opportunistic, but reasonably, I think. I've often spoken of crooks acting under cover of gvt. and I've referred to elected & appointed officials as being among those crooks. I've also implied that this also makes crooks out of cops, when they enforce what I call legislation that isn't law, but criminal plans. I truly do not have respect for such 'laws' when they consist of such plans. Your statement seems to support my position, but I won't say it definitely does. I see only an implication that it does, but there can be other implications in your statement of the opposite.

Mike LaFerrara said...

Yes, "force begins" means where force is initiated. As to your final sentence, no other implication was intended. Laws that initiate force against innocent individuals is a form of legalized criminality. So, yes, I agree with your position.