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The Religious Left’s Recession Cure By: Mark D. Tooley
FrontPageMagazine.com | Tuesday, January 27, 2009

With their usual flair for bad timing and political haplessness, Religious Left prelates are pushing a novel solution to the economic slow-down: raise the minimum wage!

“As leaders of our faith communities, we call on the 111th Congress to raise the minimum wage and join us in bringing needed economic security to our families, our communities and our country,” a recent letter to all members of Congress intoned. “An adequate minimum wage is a bedrock moral value for our nation. Where the Congress sets the minimum wage reflects whether our society truly believes that workers are human beings with inherent dignity, inalienable rights and basic needs such as food, shelter and healthcare.”

Signers included officials of the National Council of Churches, Presbyterian Church (USA), the United Church of Christ, the Unitarian Universalists, and the United Methodist Board of Church and Society, among others. Their minimum wage coalition is called “Let Justice Roll,” and includes non-religious groups, like ACORN and John Podesta’s Center for American Progress.

It’s a truism that church officials, left-wing or not, are typically clueless about economics. Clergy and church bureaucrats rely on the generous charitable giving of others for their salaries and programs. From their insular perspective, the solution to nearly every problem is to push for more generosity. If the new Sunday school building cannot be built, it’s only because the congregation is too stingy! So preach and push harder!

The utopian clergy of the Religious Left are even more clueless. They assume that a centralized federal government, if properly funded and ruled, while motivated by noble intent, can through command and control eliminate poverty and nearly all other injustice. Only a lack of will power or decency can explain the persistence of human need and suffering.

Compelling businesses to pay their employees more sounds quite humanitarian, superficially. But a more nuanced understanding of human nature, and economics, would explain that many businesses, when confronted by mandatory increased wages, will instead eliminate jobs or defer hiring. The vast majority of employers do not pay high or low wages based on greed or generosity. Instead, they pay what the market requires for employees with the skills and education required.

In the modern market economy, few persons are wedded permanently to the same occupation. Through the course of their professions, most move up and down the wage ladder. Most who are at the bottom of the wage scales and directly affected by the minimum wage are young people, students, retirees, recent immigrants, or people transitioning into the job place from incarceration or addictive behaviors. For each of these groups, low level jobs offer temporary income, a door way into American work life, a time to prove their professional capabilities, or a welcome distraction from staying at home. Most do not fit the Religious Left stereotype as virtually enslaved laborers who are chronically inhibited from sharing in the American Dream. And many in fact will lose jobs, or never get jobs, thanks partly to government coerced wage increases.

Compelling wage increases in an economic down-turn, when deflation rather than inflation is the main threat, is especially inane. Infamously, the Hoover Administration in the early 1930’s jawboned many large industries into sustaining artificially high wages, even as the U.S. economy spiraled and deflation eviscerated most salaries and prices. The well intentioned but foolish initiative only contributed to mushrooming unemployment, when once cooperative industries had to abandon the artificially high wages. Lower wages, earlier on, might have deterred some of the Depression’s worst joblessness.

No doubt the Hoover Administration was guided by the same thinking as the Religious Left, whose letter to Congress warned: “For too long, the minimum wage has not provided even a minimally adequate standard of living,” with the result being a “growing number of hardworking men and women are turning to our food banks, soup kitchens and homeless shelters to feed and house themselves and their children because their wages are too low.” In fact, most minimum wage earners today are not the primary wage earners for families. “A job should keep you out of poverty, not keep you in it,” the Religious Left insisted. But isn’t a poor paying job preferable to no job and complete dependence on unemployment benefits? If low paying jobs at least provide a doorway into the possibility of better work, are they not performing a laudable economic and social benefit?

The higher wage “Let Justice Roll” coalition insists that compelling higher salaries will help during an economic downturn. “Wages are at the heart of consumer spending power,” its economic analysis implores. Better paid employees will help spend the economy out of recession. But as always, the Religious Left mostly ignores the unintended effects of governmental compulsion. Instead of forcing employers to raise wages, why not just force consumer prices lower through government price controls? Perhaps even the centralizers of the Religious Left understand that price controls only temporarily and artificially suppress costs, which inevitably trickle out in uncontrolled ways, creating black markets, and ultimately generating even higher prices. But if state compulsion in prices is counterproductive, why is state compulsion in wages not equally recognizable as harmful?

Minimum wage laws first began in 1938, during the Depression, the “Let Justice Roll” advocates argued. They do not mention that after several years of falling unemployment, a new mini-Depression occurred in 1938-39, with the coerced higher wages a contributing factor, along with other well intentioned but unwise government interventions. The prelates’ analysis also asserts that minimum wage increases in the late 1960’s and late 1990’s did not generate unemployment. But both of these eras had high growth, low unemployment and low inflation, all of which facilitated absorbing the artificially raised wages. Mandatory increased wages on the precipice of a recession and era of deflation are potentially disastrous.

Oblivious to reality, the Religious Left insists that allowing low wages and income disparity is “immoral.” For these activist church bureaucrats, good economics are not so important as good intentions, feeling self-satisfaction in denouncing the supposed greed of others, and pushing for ever wider governmental controls over the private economy. If raising the minimum wage destroys jobs, it won’t be the Religious Left’s fault. They will just the blame the selfishness of employers, and demand higher taxes to cover the increased unemployment benefits. Let justice roll, indeed.

Mark D. Tooley is president of the Institute on Religion and Democracy. He is the author of Taking Back the United Methodist Church.

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