Making the poor more prosperous


Nate Nelson takes issue with several points I raised in a post about the French labor riots. He uses my words as a springboard for other commentaries. Fair enough; Lord knows I've done that before, too. But the ideas that Nathan indirectly ascribes to me are not my own.

For one thing, I don't think that employers should be able to fire workers "for any reason without even providing a reason." In the U.S., employers cannot terminate someone for having black skin, for being a woman, or having other immutable characteristics. This seems perfectly fair to me.

But I do think that companies should have the flexibility to dismiss employees when they see fit. The alternative, as in France, is that a government bureaucrat will second-guess the dismissal and possibly even prevent it. The bureaucrat probably has no particular expertise in the company's industry, and no direct responsibility for the company's prosperity. Yet he may reject a cost-cutting layoff because the company did not demonstrate to his satisfaction that it was justified.

Smart companies do not fire people for trivial reasons. Layoffs are often a sign of a troubled corporation, and they devastate morale among the remaining employees. They will only undertake such a measure if they are convinced it is essential to their long-term survival. That is why smart companies survive, and stupid ones eventually die or stave off destruction by creating iPods.

The question of whether capitalist or statist economies are more effective at creating prosperity. France enjoys roughly the same standard of living as Alabama, which is a fine American state but not exactly an economic powerhouse. The countries that have adopted a free-market model are the ones on the rise -- the U.K, Australia, Ireland, India, etc. They are also the ones that offer the best hope for their poorer citizens to be gainfully employed. Merely observing those facts isn't "a glorification of laissez-faire capitalism."

Nate says that "Eric Johnson and other Catholic conservatives can feel free to correct me if I'm wrong" about us never having had a minimum wage job, or send our kids to crappy schools, etc. I'm not sure who else Nate is addressing, but as for myself, I started making minimum wage back in 1987 when it was $3.35 an hour. But like most other minimum wage earners, I soon made more, and also like most, I wasn't suppporting a family.

Productivity is the key to making the poor more prosperous. That usually means education, combined with diligence, prudence, and avoiding the social pathologies that are pandemic in poor communities (alcoholism, drug abuse, illegitimacy, crime, gangs). If someone's labor is worth more, companies can afford to pay him more.


I think the problem I'm having is the presumption that the employer will be fair. Having watched unfair labor practices all my life, I don't have that kind of trust in employers. Sorry.

As to the minimum wage -- what do we do about the 29% of workers age 23 and up who are poor and who are paid the minimum wage? What do we do about the 26% who are married family heads, or the 11% who are single family heads, or the 17% who are single people, or even the 3% who are "other relatives"? What do we do about the 20% who are the sole breadwinners for their families and the 5% of these who work full-time year round? What do we do about the 5% who are poor single mothers over 18 years old?

If just one person is harmed by the minimum wage, does that make it all right?

I think a problem with regarding "If someone's labor is worth more, companies can afford to pay him more" as a sufficient solution is that it doesn't take into account what JPII says in Laborem Exercens about what gives human labor its "worth."

Hi, Nathan. I haven't been following this thread, but I noticed I don't understand the figures you're citing, due to the phrasing. Can you clarify?

what do we do about the 29% of workers age 23 and up who are poor and who are paid the minimum wage?

Are you saying that:

29% of workers age 23 and up
are poor and are paid the minimum wage?


29% of poor workers age 23 and up
are paid the minimum wage?

(Or maybe something else?)

I think the market should be free with respect to hiring, firing, and wages, you name it. If society feels the market isn't giving individuals a fair shake, let society make up the difference thru charity, tax breaks, earned income tax credit, etc.

RC -- To clarify, 29% of workers who are paid the minimum wage are also poor. I hope that rephrases what I was saying; and it's based on the link Eric provided from the Heritage Foundation, in case you were wondering.


While we're on the subject of labor markets, this article by Allen Carlson points out the burdens on single-income families: in particular, no income growth from 1970 - 2002.

It's been my experience that many minimum wage workers couldn't make it in higher paid positions. The monosyllabic kid in Walmart who's picking his nose and staring slack jawed at me when I ask where the toasters are doesn't deserve any more than minimum wage. The gum smacking girl at the McDonalds who frowned and rolled her eyes when I pointed out that my order was wrong doesn't deserve more than minimum wage either.

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This page contains a single entry by Eric Johnson published on March 20, 2006 12:22 AM.

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