Here’s an example of how to screw up an historical premise and a thesis about economic progress.
Stephen Mihm posits that the Black Death spawned minimum wage laws. Well, actually first Britain passed a maximum wage law after the Black Death, and some 250 years later got around to imposing an official minimum wage. Just possibly, 250 years of additional factors might be more responsible than the Black Death, but who knows, maybe British are just slow off the starting block?
He then goes on to credit Leo XIII with a major turning of support for minimum wage laws. He says
The first was the Vatican. In 1891, Pope Leo XIII offered a distinctly medieval take on the labor question. In his Rerum Novarum, the pontiff called for the passage of laws to remove “the causes which lead to conflicts between employers and [the] employed.” Foremost among those causes, he averred, was the insufficiency of wages. “To defraud any one of wages that are his due is a great crime which cries to the avenging anger of Heaven,” he declared.
But there was an easier way to solve the problem than involving the Almighty. Instead, the pope counseled the revival of the medieval living wage, arguing that the compensation of a wage earner should be sufficient “to support a frugal and well-behaved wage-earner.”
The encyclical resonated in nations that had high numbers of both Catholics and aggrieved workers. Among these was Australia, which along with New Zealand would become a cradle of the modern minimum wage movement.
Only, Leo didn’t say that, and the real content of the encyclical didn’t resonate in those nations.
Here’s what Leo actually said:
45. Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice. In these and similar questions, however - such as, for example, the hours of labor in different trades, the sanitary precautions to be observed in factories and workshops, etc. - in order to supersede undue interference on the part of the State, especially as circumstances, times, and localities differ so widely, it is advisable that recourse be had to societies or boards such as We shall mention presently, or to some other mode of safeguarding the interests of the wage-earners; the State being appealed to, should circumstances require, for its sanction and protection…
48. In the last place, employers and workmen may of themselves effect much, in the matter We are treating, by means of such associations and organizations as afford opportune aid to those who are in distress, and which draw the two classes more closely together. Among these may be enumerated societies for mutual help; various benevolent foundations established by private persons to provide for the workman, and for his widow or his orphans, in case of sudden calamity, in sickness, and in the event of death; and institutions for the welfare of boys and girls, young people, and those more advanced in years.
49. The most important of all are workingmen's unions, for these virtually include all the rest. History attests what excellent results were brought about by the artificers' guilds of olden times.
So the reality is that Leo explicitly rejected the “undue interference on the part of the State” and instead was promoting alternative mechanisms – namely guilds, unions and the like, with laws supporting the rightful place of such entities.
As usual Catholic social teaching strongly supports intermediary social bodies carrying much of the weight of social action, with the state mainly refereeing a fair playing field.
And as usual, liberals (including co-called Catholic ones) deliberately mis-interpret the official teaching to say whatever they want it to say and pretend that it’s “what the Church said.” Well, that’s just wrong.
Leo himself points out the fundamental mis-placement of a state-wide minimum wage:
the hours of labor in different trades, the sanitary precautions to be observed in factories and workshops, etc. - in order to supersede undue interference on the part of the State, especially as circumstances, times, and localities differ so widely
It is impossible for the state, in setting a universal minimum wage, adequately to take note of the fact that (just for example) in one industry many or most of the workers are student-aged, unskilled, and dependent on parents, while in another industry most workers are independent adults. There is a fundamental irrationality for supposing that a state-wide minimum wage designed to be sufficient to support an independent adult with family should at the same time be the appropriate wage for dependent unskilled youths. And there is a fundamental irrationality to supposing that there CAN EVEN POSSIBLY be an actual minimum value of a person’s labor, so such a law flies in the face of economic reality. If an ordinary 18 year old’s typical unskilled labor is worth $8, what is a 14 year old’s typical labor worth? Or that of a mentally ill person who cannot pay attention to his task? Or, to put it the opposite way around, how many employers will hire a person to work at $8 per hour for activity that he only expects to return $4 per hour gross? None. By setting a minimum wage, you price lower-skilled workers out of the market, and lower-profit jobs as well. So instead of having such people industriously working for a portion of their keep (and relying on family or the community support for the rest) instead you have them not working for ANY of their keep, and relying on the community hand outs for the entirety of their support.
This is why real Catholic social teaching does not claim there is such a thing as a “living wage” that can be stated across the board applicable to all potential laborers. Generally, (but not universally) wages must support workers, but not all workers are capable of work that supports them entirely and so due wages are not universally life supporting. Catholic teaching does accept the generic notion of “just wages”, but insists that the concept must be applied in a context that recognizes both fair return for the employer and that the just wage cannot be determined apart from the worker’s capabilities, thus no single wage rate is the “just” rate in all cases. Leo XIII’s comment about wages to live on explicitly refers to support of a family, implicitly referring itself to the family man who supports a wife and children, and thus the comment cannot be understood to apply to all possible workers, and most definitely does not encompass a vision of the wife working full time for wages, nor children working while supported by family. And because Leo’s thesis was being mis-interpreted, Pope Pius XI made it more clear in Quadragessimo Anno :
66. The just amount of pay, however, must be calculated not on a single basis but on several, as Leo XIII already wisely declared in these words: "To establish a rule of pay in accord with justice, many factors must be taken into account." 67. By this statement he plainly condemned the shallowness of those who think that this most difficult matter is easily solved by the application of a single rule or measure - and one quite false.
Two of the downfalls of our current system are (a) that there are not nearly enough jobs wherein the job is designed to require most of the wealth-generating capacity of a family man and at the same time generates gross profit so that the laborer’s share of that is sufficient to support a family – while (b) the education system does not lend itself to producing workers ready, willing, and able to put forth the whole of their wealth-generating capacity intelligently and creatively for an employer in a human collaborative sense. One of the moral demands of an entrepreneur / manager is that he purposely craft his business around job-blocks wherein he gets the most wealth-generating work out of a man that is humanely suitable, (instead of wasting his employee’s talents and energy on make-work or less than entirely well-designed activity), so that the laborer’s contribution to new wealth in the overall result justifies paying him enough to support a family suitably. And overly intrusive social safety-nets can make this worse: employers who are just over the cusp of 30-hour work weeks for some employees will now reduce hours across the board to below 30 hours so that most workers do not require health insurance – thus forcing these workers to effectively get 2 part-time jobs (if they can find them) instead of one more encompassing job. This means that those who promote Obamacare and like legislation are, themselves, to blame for unjust wages, as Pope Pius XI said:
72. In determining the amount of the wage, the condition of a business and of the one carrying it on must also be taken into account; for it would be unjust to demand excessive wages which a business cannot stand without its ruin and consequent calamity to the workers. If, however, a business makes too little money, because of lack of energy or lack of initiative or because of indifference to technical and economic progress, that must not be regarded a just reason for reducing the compensation of the workers. But if the business in question is not making enough money to pay the workers an equitable wage because it is being crushed by unjust burdens or forced to sell its product at less than a just price, those who are thus the cause of the injury are guilty of grave wrong, for they deprive workers of their just wage and force them under the pinch of necessity to accept a wage less than fair.