A Biblical Approach to the Minimum Wage: The Parable of the Workers in the Vineyard and Liberty of Contract

strike_and_a_protest_march_for_a_15_minimum_wage_in_dinkytownWe have watched the scene repeatedly shown on our favorite cable news shows. Across the country, fast food employees are engaging in strikes, protests, and other forms of civil disobedience, demanding that the federal minimum wage be raised to $15 per hour. Cities like Seattle and Los Angeles, and states like California and New York, have capitulated to the protestors’ demands, enacting legislation that requires drastic increases to the minimum wage.

Basic economics teaches us that far from reducing poverty or helping the plight of the working poor, in reality, raising the minimum wage actually makes it more difficult for poor people to find sustainable employment. Raising the minimum wage increases the supply of labor and reduces its demand, creating a surplus of individuals looking for work and a shortage of businesses looking to hire. Low skilled workers are disproportionately harmed by a high minimum wage because they lack the marketable skills and work experience that justify higher wages. Their jobs may be transferred to salaried employees, replaced by automation, done by the business owners themselves, or left undone. Additionally, poor individuals must pay the higher prices for goods and services necessitated by increased labor costs.

Economists are now able to utilize complex econometric computer models to quantify the economic effects of changes in public policies. One such study, published by the Heritage Foundation, found that raising the minimum wage to $15 an hour would reduce fast food profits by 77%, reduce fast food sales by 36%, and would force fast food restaurants to raise prices by 38% and cut employee hours by 36%. Another study, published by the American Enterprise Institute, used data from the Bureau of Labor Statistics to demonstrate that unemployment in Seattle increased 1.2% during the nine months that followed the city-wide minimum wage increase from $9.32 to $10 an hour in 2015. Imagine the effect on Seattle’s unemployment rate when the minimum wage is raised to $15 per hour for larger businesses in 2017 as mandated by the law recently passed by the city council.

As Christians, we bear the responsibility of faithfully applying biblical principles to all areas of life, including economics. Through a combination of carefully studying the Scriptures and prudently observing economic phenomena, we can derive economic principles rooted in biblical truth and the reality of economic science.

The Parable of the Workers in the Vineyard, found in Matthew 20:1-16, records a parable told by Jesus to his disciples. Proper exegesis requires that we first determine what Jesus’s purpose was in telling the parable. It is from this parable that we glean the spiritual principle of “the last shall be first, and the first last” (Matthew 20:16). No matter how long we individually labor for the Kingdom of God, God’s grace is such that we will all enjoy blessings of Heaven and eternal life with Him.

Behind every parable is both a spiritual and earthly principle. Parables use earthly stories that contain self-evident truisms to communicate spiritual truths. The Parable of the Lost Coin (Luke 15:8-10), for example, uses the self-evident truism that we search after lost things that are valuable, and rejoice when we find what we have lost, to elucidate why Jesus seeks His lost sheep and angels rejoice in Heaven when sinners repent. Just like the woman seeks after her lost coin, Jesus pursues lost sinners, and all of Heaven rejoices when they are found.

What is the self-evident and earthly truism utilized by Jesus in the Parable of the Workers in the Vineyard? In the parable, a group of laborers confront the vineyard owner at the end of their workday, claiming that it is unfair that they would make the same wages as those who worked for less time. The owner replies, “Friend, I am doing you no wrong. Did you not agree to work for me for a denarius [a Roman silver coin]? Take what is yours and go your way. I wish to give to this last man the same as you. Is it not lawful for me to do what I wish with my own things? (Matthew 20:13-15, NKJV).

By using this example, it is clear that Jesus assumed that employers were free to offer whatever wages they wished. Similarly, employees are free to agree to certain wages; if they don’t feel that the wages being offered are reasonable, they can reject the employer’s offer. This is called liberty of contract, which allows for employers and employees to voluntarily assent to the terms of the exchange of labor and wages. As humans created in the image of God, we are endowed with the ability to decide with whom we contract and the terms of that contract, much as God reserves for Himself the agency to decide with whom He covenants.

Minimum wage laws violate this biblical principle by interfering in the employee/employer relationship. Employees and employers are stripped of their constitutionally protected liberty of contract when the federal government suspends the laws of economics by instituting a wage floor. The employer and employee cannot contract to exchange labor for wages under the minimum wage, even if both parties find the exchange mutually beneficial according to their own self-interest.

Employers are accountable to God in that they pay their employees fair wages in a timely fashion. “Behold, the hire of the labourers who have reaped down your fields, which is of you kept back by fraud, crieth: and the cries of them which have reaped are entered into the ears of the Lord of Sabbath” (James 5:4).  We can safely assume that government does have a legitimate obligation to penalize fraud in the workplace when wages are withheld from employees.

Like their employers, employees are equally accountable to God in that they abstain from laziness, dishonesty, and theft of time. John the Baptist also told the Roman soldiers to “be content with your wages” (Luke 3:14). When both parties faithfully uphold their moral responsibilities, God is glorified.

Minimum wage laws strip us of our liberty of contract, which was given to us by our Creator and allows us to glorify Him. These laws also hurt the poor, which are the very people that minimum wage advocates claim they want to help. Next time someone recommends increasing the minimum wage as a way to help the working poor, share with them the economic consequences of doing so, as well as the biblical principle of liberty of contract.

 

This post was originally published in Issue #35 of the Baptists for Liberty newsletter: http://baptistsforliberty.weebly.com/uploads/1/1/9/8/11989443/issue35-aprilmay2016.pdf.

Distracted Colleges Fail to Equip Workforce

800px-seattle_u_admin_03Seattle University students are occupying the lobby of the school’s college of humanities, demanding the resignation of its dean.

The offense? According to the students’ petition, the college’s faculty and curriculum “traumatize,” “tokenize,” and “pathologize” students, resulting in a “profoundly damaging” student experience that has “lasting effects on [their] mental and emotional well-being.”

The students contend that the problems they are facing will only be corrected once the Seattle University humanities curriculum is replaced with a “non-Eurocentric interdisciplinary curriculum,” taught by staff from “marginalized backgrounds,” and “especially professors of color and queer professors.”  They want the college to “radically reinterpret what it means [for the college] to educate teachers and leaders for a just and humane world.”

In their minds, this can only be achieved by “centering dialogue about racism, gentrification, sexism, colonialism, imperialism, global white supremacy, and other ethical questions about systems of power.”  In other words, they want education to be rooted in the victim theories popular in the leftist culture of the modern academy.

FPIW’s most recent video, filmed at Seattle University, illustrates perfectly what happens when proper education takes a backseat to leftist social justice causes.

Higher education’s undue emphasis on elevating social justice, diversity, and tolerance diverts attention and resources away from the traditional purpose of education, namely, to prepare students with the skills and knowledge necessary to become productive citizens in a dynamic economy and society.

The recent events and video filmed at Seattle University are manifestations of the prevailing trend in higher education that seeks to indoctrinate students with a perspective that leaves them wholly unprepared for the workforce, and thus harming families in the long run.

Students of today and employees of tomorrow suffer when education is disproportionately devoted to topics arising from postmodern academic thought.  The University of Washington, for example, offers an undergraduate major in “Gender, Women, and Sexuality Studies,” which features course offerings such as “Queer Desires,” “Feminist International Political Economy,” and “Lesbian Lives and Culture.”  It goes without saying that most students who devote their academic studies to classes like these will likely be unprepared for the modern workplace.

There is little doubt among employers that colleges and universities are failing to properly prepare students for the workforce. A Braun Research survey of 500 senior executives indicates that nearly 60% of them believe that higher education is inadequately preparing students for today’s workforce.

Where is the skills gap most apparent? The senior executives who participated in the Braun Research survey mentioned soft skills (44%), including communication, critical thinking, creativity, and collaboration, as well as a lack of technical skills (22%). A robust study of humanities in core curricula would address the former while additional STEM programs and technology integration in the classroom would alleviate the latter.

Simply put, students whose education focuses primarily on gender and race studies, cultural and moral relativism, and anti-colonialist, anti-American, and anti-Western sentiments are far less prepared to make a living for themselves, let alone provide for a family.

Even students who don’t major in gender or race studies experience a lower quality education when taught by liberal academic institutions.  The National Association of Scholars publishes a list of the books most commonly assigned by universities as required reading for incoming freshman.  Their study found that the majority of assigned books are recently published and politically progressive, with topics focusing on victimization and oppression.

It appears that instead of encouraging their incoming students to familiarize themselves with enduring literature or books that will prepare them for academic and professional success, schools have been using texts to advocate progressive causes.

In recent years, universities began hiring diversity officers and other administrators to ensure compliance with prevailing conceptions of political correctness. Nonacademic administrative employment at U.S. colleges increased by 60% from 1993 to 2009, according to data from the Department of Education. This administrative bloat drives up tuition costs, increases student loan debt, and crowds out valuable resources that could otherwise be used for instruction and research.

With total national student loan debt nearing $1.25 trillion and graduating students facing an average debt of $37,172, colleges and universities have an obligation to provide students with a quality education that prepares them to enter the workforce. Without these skills and knowledge, both individuals and families suffer.

This ballooning burden of student loan debt increases financial insecurity.  Quality education leads to sustainable employment, providing the economic foundation without which many millennials will not enter into marriage.

Improving the quality of education will increase economic opportunity and strengthen families. To accomplish this task, colleges and universities must refocus their efforts on providing students with the skills and knowledge necessary to be successful in the modern workplace, without the added distractions of diversity and social justice advocacy.

This post was originally written for the Family Policy Institute of Washington:  http://www.fpiw.org/blog/2016/05/16/opinion-distracted-colleges-fail-to-equip-workforce-hurt-families/.