Quality of life matters
Letter to the Editor | Tuesday, September 19, 2006
No piece of student writing has ever made me sadder than the column “Quality of Work Matters” which appeared in the Sept. 11 edition of The Observer. The author attacks the idea of wages being determined by the government rather than by employers and employees in a “free market.” His clear intention is to discredit the Campus Labor Action Project, a collaborative movement among Notre Dame students, staff and faculty to advocate for a fair wage for University employees. The Project is based on the idea that without collective action to ensure just compensation, laborers have little power vis-Ã -vis their employer.
The author supports his argument with the fantasy that “there is an intimate connection between the value one produces and the wage one is paid.” While this may hold true in perfect-world neoclassical economic models, where wages are determined by the marginal product of labor, there are myriad real-world examples to discredit this naive assertion. For example, garment workers stitching identical types of clothing in Mexico and the United States are paid very different wages, even though their products are sold for the same prices in the same markets. Critics may argue that this just reflects different levels of productivity between Mexican and American workers, but it is clear that wages paid to workers depend on a lot more than the value of what they produce. Historical conditions of a country, structural conditions of an industry and the kind of alternative forms of employment for workers all contribute to determining wage levels.
Adam Smith’s labor theory of value argues that a link exists between the labor inputs of a commodity and the value of that commodity on the market. Even if the labor theory of value is accepted as valid, it does not automatically support the assertion that wages are intimately connected to the value of one’s work. Within the capitalist system, those who own the means of production earn a profit through the appropriation of a portion of their workers’ labor. It is in every capitalist’s best interests to pay as low as wage as possible so as to capture the highest profits. There is not an intimate connection between the value of a laborer’s production and the wage paid for that labor. Rather than pay workers for the full value of their labor, employers have every incentive to squeeze profits out of their workers.
Low wages may reflect an unfortunate abundance of low-skilled labor on the market. However, an excess labor supply does not justify paying wages so low that those wages cannot sustain the workers earning them, no matter what intro economics textbooks may say. If a flood of labor came onto the market in South Bend, would the inherent worth of any individual’s work suddenly decrease? Should we value an individual less because there are others who could do the same work?
Consider college graduates who look for jobs in May. The influx of new grads into the market in the spring certainly pushes wages down. However, this doesn’t mean that anyone has become less productive or inherently worth less.
If market-determined wages are so low that workers can’t afford to raise a family, this sends a clear signal to those workers. It tells them that their worth is so low that they don’t deserve to even live in the community. Krueger and Card found that when workers earning low wages had their wages raised, their productivity rose and employment actually increased (Foundation for Economic Education, 1999). With this in mind, it is unfortunate that the author of “Quality of Work Matters” scoffs at any non-market mechanism for increasing wages. In addition, he asserts that raising wages to the minimum level of $12.10 per hour would represent an increase in wages of over 100 percent. His assumption that workers are starting from $5.15 is simply wrong. Many workers earn $8-10 per hour, and the increase to $12.10 would likely not have the elasticity effects he claims.
The author bashes minimum wage laws as an “insult to human dignity,” arguing that most low-level jobs do not produce much of value and should therefore not be paid much. Instead of turning to the “arbitrary” social policy of a minimum wage, he proclaims, workers should seek “honestly negotiated compensation” for their work. He celebrates the capitalist system of voluntary contracts while conveniently ignoring the problems of inequality and injustice within capitalism. In reality, the unequal power relationships between workers and employers mean that workers rarely have the means to negotiate honest compensation without organizations like labor unions or the Campus Labor Action Project to contribute to collective action.
The University of Notre Dame is one of the best employers around. The University is certainly doing a lot of things right in looking after its workers. This does not mean it is perfect, though. If the University has the resources to set up a special taskforce to investigate something like off-campus crime, it must have the resources to examine the living wage issue seriously. Until then, I hope it will not be swayed by the myth that any “artificial” increase in wages will automatically be a net bad for her workers and for the University.