Raising the minimum wage would help some people. It would help the people who can get minimum wage jobs and who otherwise would have earned less income. However, raising the minimum wage hurts many others, including consumers and those who lose their jobs as a result. All economists (some of whom support the fight for a fifteen-dollar minimum wage) agree that a very large increase in the minimum wage would be bad for society and even bad for the poor. For a Christian who is concerned about income inequality, is there a good reason to support raising the minimum wage?
There are three reasons that the principles of the Bible do not affirm raising the minimum wage:
1. It Could Eliminate Job Opportunities
First, as demonstrated in my paper, “The Economics of the Minimum Wage and the Christian Response,” high minimum wages help some people but hurt the most vulnerable elements of society by locking them out of having a legal occupation. Economist Ben Powell makes a case for not trying to “help” poor people by taking away their jobs, even when their jobs look unpleasant to wealthy Americans. The way to effectively help poor people is by training them to become more productive workers or to help them directly through charity.
2. It Makes It More Expensive to Start a Business
Second, it is unjust to use the legal system to control someone else’s choices about where they work or who they hire. Proverbs 22:22 says, “Do not exploit the poor because they are poor and do not crush the needy in court.” If low-income people want to start a business, they would have a hard time immediately complying with all the legal employment regulations, such as paying their employees minimum wage. This serves the interest of established businesses and disadvantages the poorest people.
3. Neighbors Know Best How to Help
The last argument against raising the minimum wage is that Christian charity at its best looks different from voting for a minimum wage law. Private charity at its best is done voluntarily and in the context of relationship. The Bible often uses the word “neighbor” to describe the people we should be helping.
If you enjoy giving to charities that operate in foreign countries, you can do that. Hundreds of organizations exist to serve the poor in developing countries around the world, but some do so with harmful unintended consequences and fail to establish sustainable change (read more on this in Christopher Coyne’s Doing Bad by Doing Good).
So How Can We Truly Help?
When you help another human being, the first priority is to address urgent physical needs. Eventually, however, the goal should be to enable them to care for themselves and gain independence. People can be helped in a way that gives them more freedom and leads them to be able to help others. Every adult should be viewed with respect for their potential. The kind of help that makes people more independent instead of more dependent can best be accomplished in the context of long-term relationships and community.
Also, education needs to become more career focused for the next generation to succeed. Local communities know about local job markets and what the students of today could realistically be doing to earn money as the adults of tomorrow. One way to help people with low incomes is to build relationships in your own neighborhood and volunteer to teach language or trade skills.
If a business person is willing to give a legal job to someone with low skills or someone with no record of professional success, no one should assume that the business person is exploiting the worker. It should be easy for low-productivity or high-risk individuals to obtain legal employment. That is a path to better employment and higher productivity. If we want to help them earn more in the meantime, we should give them help instead of making it illegal to hire them.
If there is to be some form of government assistance to the poor or employment regulation, it is still better to employ the “neighbor” principle and keep administration at the local level. Cities can and have raised the minimum wage within their borders independent of the federal government. A local administration will have the relevant information about the economy to know if local businesses can support higher wages and to know if the poor in the community will benefit from the policy. The same devastation brought upon Puerto Rico by high minimum wages imposed in the twentieth century threatens small communities within the United States when a federal minimum wage is imposed across the board.
Keep a Balanced Biblical View
Jesus demonstrated and commanded sacrificial love and, of course, he provides the ultimate example of sacrifice. However, he did not preach against security or possessions. Living generously can look like voluntary destitution, but it can also look like a vineyard owner who provides safety for his family and employment for day laborers (Ruth 2). The Bible specifically addresses the evil of not paying a laborer who has been promised a wage. That is theft and should be punishable by law.
Wanting to help people who earn less money is a kind instinct and a Christian value, but using the government is not the most effective way to help and does not absolve us of our duty to help the people around us. We will never be able to vote our way to a completely happy and equitable world. We have to open our front door and embrace the people around us. We should give people a hand up the career ladder in addition to more direct forms of giving.
Editor’s note: This article contains excerpts from Joy Buchanan’s IFWE paper, “The Economics of the Minimum Wage and the Christian Response.” Want to read more from Joy? Check out her chapter, “Who Benefits in Capitalism?” co-written with Vernon Smith in IFWE’s latest book, Counting the Cost: Christian Perspectives on Capitalism.