The issue of a higher minimum wage – sometimes referred to as a living wage or a just wage – is back in the news, with a number of local and state governments enacting minimum wage ordinances. In the current election season, it continues to be a contentious issue.
Economists have studied the idea, but they often disagree on its impact. Some can cite statistics that purportedly show that there is no marked decline in employment. Others have data to prove that the imposition of higher minimum wages does reduce employment. The issue may seemingly not be resolved until we have sufficient social science data.
But there’s a deeper question: In mandating higher minimum wages, government is requiring that employers pay their lower-skilled workers more than they might otherwise pay them — and more than the rate at which those workers would be happy to be employed. Is this consistent with our traditional notions of justice?
This question is not a new one. It comes up in ancient Jewish texts related to property rights, labor law, and charity law.
Property rights are usually considered to be sacrosanct. As Joseph Isaac Lifshitz explains in Judaism, Law & the Free Market: An Analysis, there are numerous prohibitions in the Bible relating to the property of others — against, for instance, stealing land and acquiring property through fraud. The Tenth Commandment prohibits even the coveting of a neighbor’s property. As evidence of the importance of private property, Lifshitz notes, “punishments … are meted out in the Bible to those who undermine the social order through their flagrant disregard for it.”
This presumably entails not just the private property of individuals but also that of companies. One would assume that, absent some extraordinary public purpose, government should not have the authority to coerce companies to expend their own resources, their own private property, in certain mandated ways — like paying their employees more than they otherwise would. This kind of government mandate would seem to be a violation of companies’ property rights.
Some might say that the needs of employees should take precedence over the rights of employers. But is this just? Should not justice be blind? As it says in Leviticus 19:15, “You shall not commit a perversion of justice; you shall not favor the poor, and you shall not honor the great.” It would appear that, from the perspective of private property, government coercion that mandates a higher minimum wage would not be just.
What about labor law? Should there be some requirement for companies to pay their employees a living wage? This is a little more complicated, requiring inferences from other law.
Dealing fairly in business, including pricing things fairly, is one of the cornerstones of the law, again going back to the Bible. As it says in Leviticus 25:14, “When you make a sale to your fellow or when you buy from the hand of your fellow, do not victimize one another.” This is called the law of ona’ah — “overreaching.”
In his 2008 Tradition article “The Living Wage and Jewish Law,” Rabbi Aaron Levine, the late Yeshiva University economics professor, explains that “the law of ona’ah prohibits an individual from concluding a transaction at a price that is more favorable to himself than the competitive norm.” This assumes that there are similar goods being bought and sold in the marketplace at comparable prices.
Extrapolating the law of ona’ah to wages, we would conclude that the wages that a company pays should not be substantially below the going rate for comparable jobs. As Levine notes, “A worker who cannot command a living wage in the marketplace cannot claim a living wage based on ona’ah.” This clearly has nothing to do with an employee’s needs, again suggesting that mandating higher minimum wages would not be just.
There have been challenges to this perspective, however. For example, Jewish law stipulates that judges are to be paid a living wage. But can the case of a judge, who’s hired by a community to devote himself exclusively to his judicial job, be extended to the private sector?
Levine speculates that “if [the private sector employer] offers the head of a household a full-time job and stipulates with him that he may not take on outside employment, [the employer] must pay [the employee] a ‘living wage.’” This, however, is not common, so this challenge is not a strong one.
Another challenge comes from the Biblical law of lo talin — the prohibition against withholding a worker’s wages. As it says in Deuteronomy 24:14-15, “You must not withhold the wages of a poor or destitute hired worker. … You must give him his wages on the day they are due, and not let the sun set upon him, for he is poor, and he endangers his life [to work for you].”
These Biblical verses can be interpreted to mean that, if a worker does receive payment on time, then he will be able to provide for his family — implying that employers are required to pay their workers enough to provide for their family. However, as Levine shows, “The inference is unwarranted.” The verses are not meant to suggest that a violation of lo talon will literally endanger the employee’s life. They’re intended to underscore the employer’s moral obligation to pay one’s workers on time. So, from the perspective of labor law, it would not seem just to mandate a higher minimum wage.
This brings us to the law of charity. Is there a basis for a higher minimum wage as an act of charity? What exactly is required of employers? What role, if any, should government play?
Helping someone get out of poverty is one of the highest levels of charity. As it says in Deuteronomy 15:7-8, “If there will be among you a needy person … you shall not harden your heart, and you shall not close your hand to your needy brother. Rather, you shall surely open your hand to him, and you shall give him sufficient for his needs, which he is lacking.”
Providing a needy person with a job — with a competitive wage — is one of the best examples of charity. At the same time, is it the responsibility of the employer to ensure that employees have enough to provide for themselves and their families?
In the case of a needy employee who has primary responsibility for his family, we would expect the community as a whole, perhaps with government, to provide the necessary assistance. Deuteronomy 15:7-8 has been interpreted to mean just that – that the community as a whole, not one individual nor one employer, has the moral responsibility to help those in need.
Referring to the responsibility as dei mahsoro — “give him sufficient” — Levine notes that Jewish law “has interpreted the dei mahsoro mandate as a collective responsibility, rather than a duty for individuals to shoulder alone when they personally encounter charity cases. Because the ‘living wage’ mandate saddles employers alone with the burden of relieving poverty for the working poor, it does not follow from dei mahsoro.” So, according to charity law, a higher minimum wage mandate would not seem just.
Clearly, from an economic perspective, it’s not a given that on balance a higher minimum wage is a good idea. It may actually reduce employment. In any case, before plowing ahead with more government mandates, we should carefully consider issues of justice.
Based on property rights, labor law, and charity law, as defined by many of our sacred texts and sages, the idea of the government mandating a higher minimum wage would not seem to be just. We may have a moral obligation to help those in need, but we also have a moral obligation to deal with each other justly.