Why Minimum Wage Increases are a Poor Way to Help the Working Poor

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Recently Archbishop Wenski, on behalf of the U.S. Conference of Catholic Bishops, wrote: “while they are not economists or labor market experts…they see the pain and struggles caused by an economy that simply does not produce enough jobs with a just wage.”  They do propose one solution—a raise in the federal minimum wage—because currently it fails “to provide sufficient resources for individuals to form and support families.  A full-year, full-time worker making the minimum wage does not make enough money to raise a child free from poverty.”

Neither the Bishops’ concern over the economic plight of the working poor nor the economic policy prescription they support is a surprise. …

As a Catholic economist, the minimum wage has always presented a conundrum for me.

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As a Catholic economist, the minimum wage has always presented a conundrum for me. The argument that the minimum wage does not deliver the poverty relief it promises, and that programs such as the Earned Income Tax Credit (EITC) are more efficient, is rather persuasive. However, I worry that the current system does too little to preserve the dignity of work for low-skilled workers. The dignity of the person must be upheld in all aspects of life, including work. As stated in the Catechism of the Catholic Church (CCC),“In work, the person exercises and fulfills in part the potential inscribed in his nature (CCC, 2428).” Worker dignity is preserved in part when one’s efforts are “able to draw from work the means of providing for his life and that of his family, and of serving the human community (CCC, 2433).” In an increasingly global economy, the ability for low-skilled workers in the U.S. to provide for themselves and their families has diminished. …