The Minimum Wage and the Cause of Democracy
Levin-Waldman, Oren, Review of Social Economy
Abstract Too often the minimum wage is conceived of as a small policy measure that will be of benefit to only a small segment of the labor market while imposing costs on another segment of the labor market. Unexplored, however, are the larger philosophic questions that such a small measure may actually raise. One such issue is the relationship between the minimum wage and democratic principles. In this paper I argue that the minimum wage furthers the ends of democratic society in that low-wage workers may achieve greater equality of standing with their piers to the extent that income inequality is at all lessened: their autonomy as individuals is enhanced through higher wages, which in turn enables them to claim the benefits of citizenship and participate more effectively in the democratic process; and it fosters greater economic development in that it raises the overall structure of a region and perhaps the productivity of that region.
Keywords: minimum wage, democracy, equality, autonomy, empowerment, voice, citizenship, economic development
Arguments in favor of raising the minimum wage often center on the need to assist the working poor. A higher wage, it is maintained, will enable more people to live above the poverty level, and might potentially have supply side effects in that it attracts to the labor market those who may previously have shunned it on the grounds that minimum wage jobs, in and of themselves, simply did not make work pay (Bane and Ellwood 1994). Politically, however, neither of these arguments have great appeal. Opponents of minimum wage increases have successfully defined the issue as a narrow economic concern that results in less employment. Aside from the fact that a very small segment of the labor market actually earns the statutory minimum wage, most minimum wage earners, they argue, are neither the primary earners in their households nor are they poor. Rather most minimum wage workers are teenagers and indeed much of the empirical research on the minimum wage has focused on the teen labor market. In recent years, however, new evidence has not only challenged this orthodoxy (Card and Krueger 1995, 1998; Levin-Waldman 2000a, 2000b), but also suggests that the minimum wage could also serve as a useful tool for reducing disparities in income (Fortin and Lemeux 1997: Lee 1997; Machin 1997: Galbraith 1998: Levin-Waldman 2002).
Poverty arguments for the minimum wage, however, are relatively new. Historically, the minimum wage was viewed as a matter of efficiency to the extent that a higher wage would result in greater productivity because better paid workers would be better able to sustain themselves (Webb 1912). Even earlier arguments for a living wage, from which the minimum wage was born, conceived of higher wages as a basis for giving workers greater dignity and enabling them to be autonomous citizens. Higher wages, or at least liveable wages, were seen as a necessary condition for achieving full fledged citizenship (Glickman 1997). Over the history of the minimum wage program, then, it would appear that arguments for the minimum wage have actually narrowed from the more normative to the more technical. No longer do we ask what role policy has is creating a good society or enabling its citizens to achieve the good life, let alone whether it in any way furthers our democratic ideals. Rather, in the tradition of value-free social science, supposedly in the name of greater professionalism as well as greater neutrality, we only ask the narrow question of whether the policy achieves its clearly stated goals in such a way that the benefits outweigh the costs. Lost, however, is whether policy in any way furthers our communal objectives, whether it is in sync with our underpinning philosophic foundations (Levin-Waldman 1996).
The minimum wage may well be a small policy measure, but at the same time it also raises some larger philosophic questions. …