Catholic Debate and Minimum Wage

Dear Catholic Exchange:

James Maldanado-Berry’s recent article on the minimum wage, “Economic Justice and the Minimum Wage,” is clearly opposed to the bishops’ position regarding the minimum wage. It might be the conservative economic position, but it is hardly the Catholic bishops’ position.

Furthermore, the article’s central premise — namely, that raising the minimum wage is a ploy to raise union wages and only results in employers laying off employees due to higher labor costs — is incorrect. As the USCCB site states:

History clearly shows that raising the minimum wage has not negatively impacted the economy. In the four years after the last minimum wage increase passed, the economy experienced its strongest growth in over three decades. Nearly 11 million new jobs were added, at a pace of 232,000 per month. There were ten million new service industry jobs, including more than one and a half million retail jobs, of which nearly 600,000 were restaurant jobs.

The minimum wage of the 1960s in real US dollars (adjusted for inflation) would approach $10/hour. Is there not some point where we adjust it for inflation? But by the editors’ rationale, we can never raise it because it will result in people losing their jobs.

Besides the fact that Mr. Maldanado-Berry’s argument is incorrect, one would hope that Catholic Exchange would do a better job of supporting Catholic bishops on the issues. If those who run the website do not agree with the bishops or the Holy Father on a given position (e.g. the war in Lebanon), they would do better to at least remain silent on an issue rather than publishing articles that blatantly contradict the stance our shepherds have taken.

Your website serves a great purpose. I am only hoping that it will be used to further Catholic unity and solidarity, rather than widening the divisions in our Church by opposing the bishops. Thank you for considering my views.


Greg Youell

Omaha, Nebraska

Dear Mr. Youell,

Thank you for your heartfelt and thoughtful letter. You have made two separate contentions and we take them seriously. The first is that by publishing James Maldanado-Berry's article we have opposed the bishops and the second is that the thrust of the article we published is incorrect in its economic reasoning. We will deal with the second one first.

Economists differ on the assessment of how increasing the minimum wage affects the economy, but that it puts general upward pressure on wages is not in doubt. That general upward pressure in wages is inflationary is also not in doubt. That inflation decreases spending power is also not in doubt and is admitted within your own letter. This inflationary effect is multiplied when — as is the case — many very already-high union wages will correspondingly increase since they are automatically tied to the minimum wage by contract.

You wrote: “The minimum wage of the 1960s in real US dollars (adjusted for inflation) would approach $10/hour.” It is more accurate to say that the minimum wage had its highest purchasing value briefly in 1968, when it was $1.60/hour, equivalent to $9.12 in 2005 dollars. But that purchasing power was very short-lived as subsequent inflation rates (between 5% and 15% through the next decade) eroded it. This is not to say that the raise in the minimum wage was the cause of the inflation of that period, but to say it played no role at all would be to indulge in the fantasy the author referred to: That somewhere there is a pot of money that businesses are hoarding and we should pry it from their greedy hands and give it to low wage workers.

The addition of jobs to the economy does not in itself answer the contention of Maldanado-Berry that unemployment among the most vulnerable segment of society increased. The question is not whether raising the minimum wage helps or hurts the economy in general, the question is whether it helps or hurts the people it is proposed to help — those workers at the very bottom of the economy. Simply saying that jobs were added to the economy is an incomplete answer, unless we also know the actual effect on unemployment, something your quoted part of the bishop’s statement did not address. In other words, your letter did not rebut Maldanado-Berry’s contention that raising the minimum wage will increase unemployment among the lowest skilled workers.

Having noted then that there are valid arguments to counter the bishops’ assessment of the economic effect on the poorest workers of raising the minimum wage, we still have to ask if we have the right as lay Catholics to raise those arguments or does our faith require us to assent to the bishops views on the economy? Or must our writers, as you say, keep silent if they have another opinion.

The answer is that obedience to the bishops does not require our assent to economic theory or predictions. (Nor, for that matter, does it require our assent regarding other prudential matters such as military action and application of the death penalty.) What we do have to assent to is teaching on faith and morals. The moral teaching on this matter is that we must seek economic justice for all. What that means precisely within a given economy and how we get to it, may be matters of disagreement even among faithful Catholics, and disagreement about such prudential matters does not in any way injure our Christian unity. For that reason, we are equally willing to publish articles that promote raising the minimum wage as Sr. Becky Balthazor and Kelley Rogers-Graham’s article The Culture of Poverty does.

Thank you for your support of Catholic Exchange.

Mrs. Mary Kochan

Senior Editor, Catholic Exchange

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