1. The just wage and minimum wage policy

A perspective from Catholic social teaching

By Eric A. Scorsone

Catholic social teaching has engaged with the idea of a just wage for over a century. As the modern economy developed and people moved from self-sufficient farming to wage work in factories in the 20th century, the Catholic Church’s teaching began to address these new economic conditions.

A just wage was defined by the Institute of Social Concerns at the University of Notre Dame as “a just wage covers the basics necessary for a minimally decent life for a worker and the worker’s household, including hours of work that are predictable, not excessive, and provide regular rest to facilitate a decent life away from work.”¹ The just wage must ensure that a worker can meet their and their family’s material needs and include rest time. The rest time factor allows for a worker to experience a life outside of work including worship, leisure, and family time. This would include the proper care of and attention to children.

In a similar fashion, the Catechism of the Catholic Church (2434) states, “In determining fair pay, both the needs and the contributions of each person must be taken into account. Remuneration for work should guarantee man the opportunity to provide a dignified livelihood for himself and his family on the material, social, cultural and spiritual level, taking into account the role and the productivity of each, the state of the business, and the common good. Agreement between the parties is not sufficient to justify morally the amount to be received in wages.” This last point is important and adds a new dimension from the first definition we provided. It means that a worker may have agreed to a labor contract that did not include a just wage. The worker may have done this to avoid the worst-case scenario of unemployment and material deprivation. Employers should bargain in good faith and provide a just wage for their workers.

Father John Ryn, a Catholic priest and economist, wrote an important book in the 1930s called Distributive Justice, which laid out principles that are still valid for considering why a just wage is important. The first principle is that all people are created by God and each and every person has a right to the fruits of the earth. Along with that right comes the second principle that is an obligation for each person, who is able, to use their gifts and to work. Father Ryan argues that this implies the third principle that those who own property have an obligation to give reasonable access so that others can labor and earn a wage.

The U.S. Catholic Bishops’ teaching has focused on a just wage, but has also addressed the related question of minimum wage policy. The minimum wage policy is one strategy for achieving a just wage in society. The Catholic Church has provided several arguments for why a minimum wage is a just policy.

What is the relationship between a just wage and the governments’ minimum wage policy? Minimum wage policies exist at both the state and federal level. The minimum wage is a policy designed to set a floor below which the amount of remuneration paid to an individual worker cannot fall.² Why would a minimum wage be needed? The argument is that workers, in an effort to compete with each other, will bid wages down to a level that is in essence “too low” for any kind of satisfactory standard of living. The minimum wage policy sets a floor that ensures everyone earns that living or just wage no matter who they are or what job they perform.

In the economics profession, there have been arguments made that the minimum wage policy has negative consequences. Those negative consequences would include fewer jobs being available at the low end of the income scale. The reason for this purported result is that a minimum wage raises the cost of a job to the employer and leads them to demand fewer employees and thus fewer jobs. However, more recent empirical research has refuted much of this claim. There are likely some job losses, but these are more than offset by the wage gains of workers.

In summary, Catholic social teaching provides a strong justification that in the modern economy where wage employment is relevant, each and every person should be able to provide for their and their family’s material needs through a just wage, have an obligation to work, and that the minimum wage is an important tool in ensuring just wages in society.

Eric A. Scorsone is the Executive Director of the Weldon Cooper Center for Public Service, University of Virginia and Parishioner at Saint Jude, DeWitt.

2. Is a minimum wage a just wage?

A perspective from Catholic social teaching

By Gary Wolfram

Increases in the minimum wage are often seen as a mechanism that will ensure that workers are compensated fairly and allow a worker the means to cultivate a family’s material, social, cultural, and spiritual life. Catholic social teaching is consistent with employers providing their workers with what might be sufficient remuneration for them to live decently. In Chapter 9 of the Compendium of the Social Doctrine of the Church, one reads: “The fight against poverty finds a strong motivation in the option or preferential love of the Church for the poor.”

The Church also teaches that workers are due their just wage. The Catechism states that failure to pay a worker their just wage is gravely sinful. As Father Robert Johansen noted in “The Minimum Wage and Catholic Social Teaching,” the Catechism also says that “a just wage is the legitimate fruit of work.” It therefore may seem that minimum wage legislation is a useful tool for workers to obtain sufficient income so that, as St. Thomas Aquinas wrote in Summa Theologica, “No one is obliged to live unbecomingly.”

However, a minimum wage may not be an effective way of improving the living standards of the poor and can result in unintended consequences that actually harm those who are most poor. The “seen” and the “unseen.” One might think of the Sherlock Holmes story A Scandal in Bohemia, where Sherlock tells Watson that Watson sees but does not observe.

This is the situation with the minimum wage. While enactment of and increases in the minimum wage do increase the wages of many, perhaps most, of those who were earning less than the minimum wage, it is useful to observe that some people will lose their jobs due to the increase in the wage and that these people will be among the poorest.

To see this, suppose you are the owner of a small business. If your employees produce $7 an hour worth of product, you can’t pay them $8 an hour or you will go out of business. The Congressional Budget Office’s 2024 report, “How Increasing the Federal Minimum Wage Could Affect Employment and Family Income,” found that while increasing the minimum wage would lift some families out of poverty, it would cause other low-wage workers to become jobless and family income would fall. The Catechism notes that unemployment almost always wounds its victim's dignity and threatens the equilibrium of his life. This would argue against legislation that increases unemployment.

There is a recognition of workers being paid the value of what they produce in Pope St. John XXIII’s Mater et Magistra, where he points out that factors that enter into the assessment of a just wage include “the effective contribution which each individual makes to the economic effort” and “the financial state of the company for which he works.” This indicates that the market system, where people are paid the value of their added product, is consistent with Catholic social teaching.

Rather than focusing on increasing the minimum wage, Catholics should work to, as St. John Paul II taught, increase the range and productivity of our educational system. This would increase the productivity of low-income workers and thus increase the wages that they will be paid.

In addition, Richard Burkhauser has argued that a more efficient way than the minimum wage of enabling people to obtain a just wage is the use of the Earned Income Tax Credit. First, the minimum wage is a poorly targeted measure to result in a just wage. The Congressional Budget Office has found that most workers who gain from an increase in the minimum wage do not live in families that are below the poverty line. The Earned Income Tax Credit, on the other hand, is targeted at low income families. For
tax year 2024, a married couple with two children can receive a maximum credit of nearly $7,000. This would be the equivalent of a $3.50 an hour increase in the wage of a full-time worker. Second, the Earned Income Tax Credit does not reduce employment because it is not paid directly by the employer as is the case with the minimum wage.

In the end, while an increase in the minimum wage will result in more workers being paid a fair wage, and poverty will be reduced for some families, use of the minimum wage must be weighed against the loss of income to the less-skilled and the value of the alternative of the Earned Income Tax Credit.