JUST WAGE
INITIATIVE

What does CST say about the relationship between a just wage and a decent life?

Catholic social tradition (CST) is quite explicit that a just wage provides a decent life for the worker, starting with but also going beyond a good paycheck to include regular and reasonable hours, a safe and healthy work environment, and an overall employment scenario providing resources for self-development both at work and outside of work. Further, CST clearly states that these core components fostering a decent life apply not only to the worker directly but also the worker’s entire household. Importantly, too, CST insists that employers alone are not responsible for fulfilling these conditions; the community through government policy must also play a role in ensuring an economy that promotes a decent life for workers.

In the US context, workers and their advocates began arguing for a “living wage” in the late nineteenth century. Ever since, a “living wage” has meant an income permitting the worker and the worker’s family to escape poverty and enjoy the basic minimal standards for a good life (shelter, food, clothing, transportation, and the like). Catholic thinkers have been central to that conversation, most notably Rev. John A. Ryan, who published A Living Wage in 1906 and worked with a broad spectrum of reformers from the Progressive Era to the New Deal to sponsor and realize minimum wage and maximum hour legislation.

While proponents have usually taken an expansive view of what a living wage encompasses, too often in the popular imagination it gets reduced to a dollar figure, losing its larger meaning. The MIT Living Wage Calculator, for example, is a wonderful tool for revealing what hourly wage is necessary for a full-time worker to support herself and her family in every county in the USA, but it cannot quantify important factors like workplace safety, environment, or opportunities for growth.

At CST’s core is a commitment to the essential dignity of every human person, so enabling people not just to survive, but to thrive — that is, to live a decent life — is an essential precondition for recognizing them for more than just their productive capacity to work. When a workplace fails to offer wages, hours, and resources that foster a decent life, it risks dehumanizing people as commodities. More broadly, it indicates injustice within the broader socioeconomic system. As Pope Francis put it in a 2019 speech, an economy detached from ethics fails to promote “a more just social order but leads instead to a ‘throwaway’ culture of consumption and waste.”

In our view, then, a just wage better describes all the factors that together combine to facilitate a decent life. By encompassing but expanding on a living wage, a just wage more fully promotes the flourishing of the worker and those in the worker’s household. As Pope Francis summarized in a 2016 address, “The just distribution of the fruits of the earth and human labour is… a moral obligation. If we want to rethink our society, we need to create dignified and well-paying jobs… To do so requires coming up with new, more inclusive and equitable economic models, aimed not at serving the few, but at benefiting ordinary people and society as a whole.”

Below you’ll find a sampling of official Catholic statements articulating CST’s commitment to a wage that fosters a decent life for the worker and the worker’s family. These are arranged chronologically to show both the continuity and evolution of Catholic thinking and language over time, especially regarding gender. Earlier CST statements in particular use as default the male pronoun, expressing a conventional (if modern) understanding of ideal households populated by male breadwinners, female homemakers, and their children. While more recent pronouncements reveal a greater commitment to gender equality at work, an enduring preference for the breadwinner model of one wage-earning parent and one (unwaged) home caring parent suggests unresolved questions confronting not only CST but all advocates for a just economy, especially amidst a social reality where two adult incomes are increasingly common.

KEY CST PASSAGES

“The following duties bind the wealthy owner and the employer: not to look upon their work people as their bondsmen, but to respect in every man his dignity as a person ennobled by Christian character. They are reminded that, according to natural reason and Christian philosophy, working for gain is creditable, not shameful, to a man, since it enables him to earn an honorable livelihood; but to misuse men as though they were things in the pursuit of gain, or to value them solely for their physical powers – that is truly shameful and inhuman.” 
— Pope Leo XIII, Rerum Novarum (On the Condition of Workers), 1891 (20) 

“In the first place, the worker must be paid a wage sufficient to support him and his Family.” 
— Pope Pius XI, Quadragesimo Anno (After Forty Years), 1931 (71)

“The opportunity, moreover, should be granted to workers to unfold their own abilities and personality through the performance of their work. Applying their time and strength to their employment with a due sense of responsibility, they should also all enjoy sufficient rest and leisure to cultivate their familial, cultural, social and religious life.”
— Pope Paul VI, Gaudium et Spes (Joy and Hope), 1965 (67)

“It should also be noted that the justice of a socioeconomic system and, in each case, its just functioning, deserve in the final analysis to be evaluated by the way in which man’s work is properly remunerated in the system.” 
— Pope John Paul II, Laborem Exercens (On Human Work), 1981 (19)

“Furthermore, society and the State must ensure wage levels adequate for the maintenance of the worker and his family, including a certain amount for savings.” 
— Pope John Paul II, Centesimus Annus (The Hundredth Year), 1991 (15)

“What is meant by the word ‘decent’ in regard to work? It means work that expresses the essential dignity of every man and woman in the context of their particular society: work that is freely chosen, effectively associating workers, both men and women, with the development of their community; work that enables the worker to be respected and free from any form of discrimination; work that makes it possible for families to meet their needs and provide schooling for their children, without the children themselves being forced into labour; work that permits the workers to organize themselves freely, and to make their voices heard; work that leaves enough room for rediscovering one’s roots at a personal, familial and spiritual level; work that guarantees those who have retired a decent standard of living.”
— Pope Benedict XII, Caritas in Veritate (Charity in Truth), 2009 (63)

“An economic system detached from ethical concerns does not bring about a more just social order, but leads instead to a “throw away” culture of consumption and waste. On the other hand, when we recognize the moral dimension of economic life, which is one of the many aspects of social doctrine of the Church that must be integrally respected, we are able to act with fraternal charity, desiring, seeking and protecting the good of others and their integral development.”
— Pope Francis, Address of His Holiness Pope Francis to the Members of the Council for Inclusive Capitalism, 2019

This page was last updated on June 8, 2022. It was written by Dan Graff, Emily Merola, Edward Prein, and Anastasia Reisinger, with research contributions from Clemens Sedmak.

What does research show about the relationship between a just wage and a decent life?

In the USA, the federal minimum wage — stuck at $7.25/hour since 2009 — has in recent decades not provided enough income for even a full-time single person to survive, let alone thrive. While some state and local governments have raised the minimum wage in their jurisdictions — thereby getting a low-wage worker closer to having the means to escape poverty and enjoy a decent life — it remains a fact that most low-income Americans and their families remain far from a just wage.

Characteristics of minimum wage workers (age, race, industry, etc.) are summarized annually by the Bureau of Labor Statistics, and you can access the 2021 report here. MIT’s Living Wage Calculator measures the wage necessary to escape poverty for households of various sizes in every county in the USA; it shows the gaps separating the minimum wage from what wage is actually needed for a decent life. Meanwhile, the United Way’s ALICE Reports document the extent of those living in poverty or perilously close to it throughout the country (ALICE is short for Asset Limited, Income Constrained, Employed). The ALICE reports show that the size of the workforce in each state struggling financially is significantly larger than traditional federal poverty guidelines reveal.

There is an ongoing debate amongst labor economists about the likely impacts of raising the minimum wage on various workers, though much recent research suggests that the gains for workers receiving raises outweigh any job losses. Just as important, perhaps, is an approach that considers the low incomes of households rather than individual workers, a recognition that workers are embedded within relationships and communities. As economist David Neumark has argued, “Setting a higher minimum wage seems like a natural way to help lift families out of poverty. However, minimum wages target individual workers with low wages, rather than families with low incomes. As a result, a large share of the higher income from minimum wages flows to higher-income families. Other policies that directly address low family income, such as the earned income tax credit [EITC, see more below], are more effective at reducing poverty.”

Some scholars assert that we must look beyond the direct wages a worker or household earns in order to capture more accurately their broader economic well-being, which may be enhanced by federal transfer programs. There is a lively debate on whether these programs have significantly reduced poverty in contemporary America, as well as how extensive poverty actually is. Within this area, there are differing methods and justifications for measuring the welfare of individuals, as well as for measuring the prevalence of poverty in the US. Much research shows strong results for programs like the EITC, which provide more resources to low-income households. The EITC in particular has been found to promote work and alleviate poverty, especially among children. Moreover, the benefits for children often persist into adulthood; many have better school outcomes, and improved earnings later on in life.

With regard to employers, some scholars such as Zeynep Ton argue that investing in labor is more beneficial than viewing it as a cost to minimize. Bill Bowman, Dean of the Busch School of Business and Economics at the Catholic University of America, similarly claims that “providing just compensation to workers is a sound business strategy,” and that programs associated with higher compensation often pay for themselves, sometimes even within a year.

Going beyond the wage itself to other features of work that contribute to or detract from a decent life (hours, stability, and stress, to name a few), a great place to start is the American Psychological Association’s Work and Well-being Survey, which records workplace experiences, measures employee work-related stress, and asks what mental health resources employees seek from their employers. This ongoing project confirms that employer resources — particularly, those regarding mental health — should be included as part of a just wage, as they directly benefit employees and improve their work experience. At the same time, though, simply the presence of these resources/benefits is not enough. For example, the 2018 survey revealed that only 41% of Americans reported working for an organization encouraging its staff to take time off, while 36% left paid vacation time unused in the past year. Clearly, for a workplace to foster a decent life for workers, the employer must urge employees to take advantage of resources like rest and mental health benefits. The 2021 survey, reflecting the challenges of working during the pandemic, probes the “compounding pressures” imparting greater stress among American workers, over 40% of whom report they intend to seek employment elsewhere in the coming year.

Another useful resource is the Better Life Index of the Organisation for Economic Co-Operation and Development (OECD). Though the categories compiled and analyzed range far beyond employment to include housing, education, environment, and more, three of the eleven factors directly relate to the Just Wage Framework: income, jobs, and work-life balance. Moreover, the Better Life Index fosters comparisons among forty different countries, and it facilitates online users to rank the factors most important to them.

This page was last updated on Jun 8, 2022. It was written by Dan Graff, Emily Merola, Edward Prein, and Anastasia Reisinger, with research contributions from Lauren Baumann.

Wage enables decent life for worker and household

The role of government in shaping the employment relationship has always been hotly contested in the USA, and workers under the law have few protections when compared to other wealthy countries. Furthermore, labor laws vary a great deal by state and sector, so readers should view this brief essay as an introduction to a complex topic that requires further research via the links provided. (For a great introduction to the politicization of labor rights and regulations in modern US history, see Nelson Lichtenstein’s State of the Union: A Century of American Labor).

For example, the US is an outlier in offering workers no right to paid time off (vacations, holidays, or sick leave). A recent study by the Center for Economic and Policy Research termed the US the “No-Vacation Nation,” as one in four workers have no paid time off of any kind. Time away from work — for rest, rejuvenation, family time, and self-improvement — is an important indicator of a decent life, something millions of American workers currently lack.

Though there are a number of federal laws aimed at protecting workers from excessive exploitation and promoting aspects of a decent life, many of these landmark bills — from the Fair Labor Standards Act (1938) to the Occupational Safety and Health Act (1970) — are quite limited in coverage and impact.

A key example is the minimum wage, the central plank of the Fair Labor Standards Act (FLSA), which is not indexed for inflation and can only be altered by an act of Congress. Currently, the minimum wage is $7.25 an hour, where it has been since 2009. While the US minimum wage has never amounted to a “living wage,” its purchasing power has waned significantly over the years, peaking in 1968. In 2019, according to the Economic Policy Institute, the minimum wage was worth 31% less than it had been fifty years prior; meanwhile, as documented monthly by the Bureau of Labor Statistics, prices continue to increase. Further, the law does not apply to all workers, though its numbers have expanded over the years. A full list of exemptions to FLSA wage requirements can be found here.

In recent years some state and local governments have raised the minimum wage in their jurisdictions, meaning that the legal minimum wage varies greatly across the country. To compare the US minimum wage over time and to other countries in real (inflation adjusted) dollars, see this chart from the Organization for Economic Co-operation and Development.

In terms of protection from overwork, US law does not set a limit for the maximum number of hours an individual over sixteen can work (or be forced to work by an employer) in a typical work week. However, in order to reward those who work long hours in a given week (and provide a disincentive to an employer from overworking their staff), the FLSA does mandate overtime pay at rates of time-and-a-half for any hours worked above forty. While hourly workers everywhere boost their annual incomes from these overtime provisions, however, many salaried and supervisory workers are excluded from this benefit.

Until 2020, for example, salaried workers who made more than just $23,660 annually were exempt from overtime pay. According to the National Employment Law Project, while more than 65 percent of salaried workers received overtime pay in the 1970s, less than 7 percent were covered by 2019. While the Obama administration had proposed raising the annual salary threshold to $55,068 by 2022 — covering about one-third of salaried workers — the Trump administration instead mandated a threshold of $35,568, which is now in effect.

As with minimum wages, overtime coverage varies by age, sector, and region. A full list of federal exemptions to FLSA overtime requirements can be found here. Meanwhile, some states enforce hours or pay that are above the federal minimum. Complicating matters further, wage and hour requirements for government contracts fall outside of the FLSA, and are instead regulated by legislation including the Service Contract Act, Davis-Bacon Act, and Contract Work Hours and Safety Standards Act. Each law imposes its own rules and regulations.

In terms of workplace health and safety, the Department of Labor’s Occupational Safety and Health Administration (OSHA), established in 1970, is the main agency responsible for enforcing regulations via workplace inspections. A comparison between US federal standards and international standards can be found here; meanwhile, many states have created their own workplace safety regulations that go beyond OSHA’s minimums. Articulating standards is important, but rules are only as strong as their enforcement. Unfortunately, over the past forty years, the number of the agency’s inspectors has actually declined, while the workers under OSHA’s jurisdiction have nearly doubled. As the COVID-19 pandemic continues as of this writing, OSHA’s critics complain that it has issued only guidelines, not enforceable rules, leaving businesses too much discretion and putting workers at risk. In response, states such as Virginia have undertaken more stringent measures in the name of worker and community health.

This page was last updated on November 22 2021. It was written by Dan Graff, Emily Merola, Edward Prein, and Anastasia Reisinger.

Wage enables decent life for worker and household

There are several ways to approach the question of what workplace scenarios promote a decent life for workers.

In the first place, unionized workplaces — by giving workers a collective voice to press their interests upon their employers — foster policies and protections that promote a decent life for workers and their households. In the absence of strong legal protections for workers in the US (see “What is the law?”), collective bargaining agreements secure higher wages, benefits such as paid vacations and health care insurance, and protections from arbitrary or unfair dismissal or discrimination. Further, according to a recent study by two political scientists, union membership increases workers’ life satisfaction across incomes and demographic lines.

As a 2020 Economic Policy Institute report concludes, unionized workers earn 11.2% more in wages than nonunionized peers, while workers of color see an even bigger boost versus their nonunionized peers: unionized Black workers earn 13.7% more, while Hispanic workers are paid 20.1% more. (For an in-depth look at the union impact in one state, see the UC-Berkeley Labor Center’s three-part series from 2018.)

Of course, since the unionization rate in the USA is so low (only 10.8% in 2020, according to the Bureau of Labor Statistics) the power of unions to shape wages and benefits in the broader economy is now much smaller than it was during the post-World War II decades. With the rapid decline of unions since the 1970s, American workers have experienced relatively flat wages in spite of continuing productivity gains, leading to an alarming increase in income and wealth inequality only exacerbated by the COVID-19 pandemic.

In an attempt to counter this national erosion of labor standards, many local and state governments have begun to address pressing problems such as low pay, lack of paid time off, and inconsistent hours. Twenty-four states, for example, have raised their minimum wage in 2021, with California, Washington, and Massachusetts leading the pack; at the city level, Seattle’s $15.45/hour will also fully take effect in 2021.

In terms of paid time off, in 2006 San Francisco was the first city to enact a mandatory, if limited, paid sick leave policy for all employers; other local jurisdictions have followed. Meanwhile, cities like New York and Philadelphia have passed predictive scheduling ordinances requiring employers to give hourly workers more regularized schedules, helping workers achieve better work-life balance. Each of these local efforts has faced massive employer opposition, and it remains unclear whether a patchwork of competing employment regimes will provide the opening wedge for the creation of a national framework of stronger worker protections, as state innovations in the Progressive Era did for the national New Deal laws that came in the 1930s.

Last but not least, there are employers who go beyond the requirements of law and consider it a priority to promote policies that foster a decent life for their employees. Zeynep Ton, Professor of the Practice at the MIT Sloan School of Management, has been at the forefront of pushing companies to adopt a “good jobs” strategy, arguing that a workforce should be seen as an asset to invest in rather than a cost to minimize.

Focusing in particular on retail, a sector notorious for low wages, poor benefits, and high turnover, Ton has identified exemplary businesses who offer workers “much better jobs than their competitors, all the while keeping their prices low and performing well in all the ways that matter to any business. They have high productivity, great customer service, healthy growth, and excellent returns to their investors. They compete head-on with companies that spend far less on their employees, and they win.” Costco, for example, stands out amongst retail giants, as workers there earn significantly more than counterparts at competitors, while internal job ladders create opportunities for promotion that keep labor turnover very low.

On the one hand, the businesses Ton highlights — from Costco to Trader Joe’s to Quik Trip — seem to point toward a path of employer-sponsored policies fostering better conditions for workers. On the other hand, many of these same companies strongly resist unionization, a surer pathway toward workers gaining a decent life. Meanwhile, the global supply chains providing these American retailers with low-cost goods remain hidden from customers’ view, raising urgent questions about the workers, mostly abroad, who are also deserving of protections and empowerment enabling them to live a decent life.

This page was last updated on November 22, 2021. It was written by Dan Graff, Emily Merola, Edward Prein, and Anastasia Reisinger.