Mr. Moderate

In a previous article I asserted that history had taught us to avoid price controls and rationing as instruments of government policy except in certain very specific and very limited circumstances. For instance, when there was a substantial risk of grave injury or death due to the failure of a merchant to make available normally-available goods and services at a reasonable price. The justification for such government action is grounded in the ethical foundation of survival as the primary ethical value which we humans need to observe.

Wages are “prices” in the sense that they are part of the cost of production for goods and services sold by businesses, and as such we should presume that the government ought to avoid wage controls to the same degree that it avoids price controls. But the fact of the matter is that society has more of a survival interest in maintaining at least a floor underneath which lower wages become “exploitation” of the poor and vulnerable in society. If wages are too low, then the people who earn those wages will be unable to support themselves and thus unable to survive. That is an evil which we ought to feel morally obligated to prevent.

In the current political climate, politicians are generally under the control of big business lobbyists, and those lobbyists are paid to keep the minimum wage down (among other things). Consequently, the minimum wage today, even in those states where the people have been asked to vote directly on setting a higher minimum, is still far below what anybody would consider to be “a living wage” for workers. Opinions may vary, but my personal opinion is that the phrase “a living wage” should be defined as a wage which will allow a single worker to afford a cheap efficiency apartment, a cheap used car (or coverage for other transportation costs, like subway or bus rides), insurance (life, health, car, and renter’s), food, clothing, and other reasonable necessities of life. If the worker is the sole support of a family, benefits should include extra money for supporting school-age children, but those need not be included as actual “wages.”

I’m not going to propose some particular number. The “living wage” for rural New Mexico is certainly far lower than is the “living wage” within the borders of New York City. One of the problems of a “one size fits all” federal standard is that it fails to take into account the realities of differing cost structures for different major metropolitan areas. But I’m absolutely certain that computing such numbers for each Standard Metropolitan Statistical Area (SMSA) is will within the capability of the federal government. My solution to the minimum wage issue is to require employers to pay an actual “living wage” to its employees or else it should do without said employees. To require less of employers is to sanction the exploitation of workers. And the exploitation of workers for the profit of a business is immoral, and the economic system ought not to sanction immoral economic practices.

As for controlling wages on the high end, I’m disinclined to propose a hard-and-fast rule. However, I believe the government ought to observe what chief executives are being paid, and the government ought to presume that if any compensation package for any chief executive grows to outlandish proportions as compared with equivalent packages for other chief executives, then the government ought to consider that compensation package to be clear and convincing evidence that the company in question enjoys monopoly power within its industry. In other words, overpaying the CEO of some company should be evidence that the company is actually a monopoly, and the government ought to be prepared to institute such actions against any such company as it would against any monopoly it discovered to be operating under its regulatory control.