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God's Politics

A Fairness Issue

by Jim Wallis 03-12-2009

“Without justice, what are kingdoms but bands of robbers?”
– St Augustine.

I was surprised when Senator Bob Casey (D-PA) opened up his remarks before the Senate Health, Education, Labor, and Pension (HELP) Committee with those words from the great fourth century Christian theologian.  Senator Casey is a committed Catholic and spoke during the hearing from a deep commitment to the “common good” in support of the Employee Free Choice Act (EFCA).

The bill is contentious to say the least.  Earlier this week, a Politico headline ran “Union Bill Creates Jobs — for GOP Ops.”  Big business and unions have already spent and will continue to spend tens of millions of dollars in opposition to and support of the bill.  The details of the bill will be debated, revised, and compromised over the course of this battle.  I testified before the Senate HELP Committee this week in support of the bill, but my remarks did not focus on the technical policy aspects of the legislation, but rather on the underlying moral precepts that the bill attempts to address.

The relationship between employer and employee is broken:

In 1965, U.S. CEOs at major companies made 24 times a worker’s pay – by 2004, CEOs earned 431 times the pay of an average worker.  From 1995 to 2005, average CEO pay increased five times faster than that of average workers.  While CEO pay continues to increase at rates far exceeding inflation, wages for the vast majority of American workers have failed to keep up with rising prices.  In fact, real wages for the 90% of Americans who earn under $92,000 a year have actually fallen since 2001.

This is a fairness issue. The system of employee-employer relations is fundamentally lopsided. There’s a need to level the playing field, to redress a great imbalance. When a system is in such fundamental imbalance, it is our obligation on both sides of the aisle to remedy that.  While the details of the legislation are worked and reworked, these fundamental questions of relationships between employer and employee, management and labor, must be addressed.

Twenty years ago, in their pastoral letter “Economic Justice for All,” the U.S. Catholic Bishops wrote:

The way power is distributed in a free market economy frequently gives employers greater bargaining power than employees in the negotiation of labor contracts. … The Church fully supports the right of workers to form unions or other associations to secure their rights to fair wages and working conditions. … In the words of Pope John Paul II, ‘The experience of history teaches that organizations of this type are an indispensable element of social life, especially in modern industrial societies.’ … No one may deny the right to organize without attacking human dignity itself.

My dad worked for Detroit Edison when I was growing up and was often involved with the labor negotiations at the company, not on the labor side, but on the management side.  He was often preferred by both sides to be at the table of those tough contract and workplace issues negotiations. Why? Because he recognized the value of unions even if he didn’t agree with their every demand. And he believed a cooperative relationship between labor and management was better than a constantly contentious one. He knew that a good relationship between management and labor was essential to a stable and productive workforce and economy, and that union organizing and leadership helped contribute to that.  Things have changed since then, but the principles of cooperation that I learned from my dad’s work with unions, that management and labor can be partners and not just antagonists, needs to be restored. And the great chasm that has now grown between CEO salaries and that of average workers, I know, would have appalled and offended my father.

Categories: Economics, Human Rights
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  • nuclearferret
    When it comes to making American law, is Church teaching relevant? It appears it is relevant...when the Church takes a position in favor of one's personal position.

    Is it especially meaningful to mention or judge Sen. Casey's commitment to Catholicism? Does a pro-abortion pol like Nancy Pelosi also earn such an accolade? And more importantly, does that Catholic commitment have any meaning for US law, which is to govern all Americans, not just Catholics or believers?
  • JaneinWNY
    "Does a pro-abortion pol like Nancy Pelosi also earn such an accolade?"

    Sigh. Words mean things. If pro-fetal-life people get to call themselves "pro-life", then people who believe women are capable of making personal moral decisions should be able to call themselves "pro-choice". If you can show me where Nancy Pelosi refers to herself as pro-abortion, I will withdraw my complaint.

    I know this is off-topic, but you hit one of my pet peeves.

    Jane
  • "pro-abortion" legislatively means for the legal right to abortion. Pelosi wouldn't like the label "pro-abortion" because "pro-choice" sounds better.
  • JaneinWNY
    I have only ever seen "pro-abortion" used by the anti-abortion crowd to make a point. And I have no idea what it means that it's used "legislatively", but it certainly sounds official Can you point me to some examples, from standard news sources or "legislatively", where pro-abortion is used as a respectful short-hand for "pro-legal abortion rights"? Thanks.

    Jane
  • Lord_Voldemort
    Is there a problem -- that's open for debate. Is EFCA the solution? The answer is plainly no.

    EFCA would practically eliminate secret-ballot elections when unions want to organize workplaces. But the thing is, even if you accept unions at their word, secret ballots themselves aren't the problem. Union officials themselves aren't saying that there's vote tampering or other problems -- their gripe is about violations by employers prior to the vote.

    So why are unions trying to get rid of secret-ballot elections? Why not go after the violations themselves?

    Jim is missing the real issue here, this debate isn't about ends, its about means.

    LV
  • DITE
    "In fact, real wages for the 90% of Americans who earn under $92,000 a year have actually fallen since 2001."

    Only if you subtract the increase in benefits.
  • prk
    Jim,

    That's right. Hopefully they can do to the rest of American business what they have done to GM. Yes you can be a Walmart greeter and make $50 an hour plus benefits and retire at 47.

    Roger
  • prk
    Jim,

    Maybe no elections should have a secret ballot. Will just raise our hand at work and let you and your union buddies count the votes.

    Roger
  • judithod
    So is check card intimidation fair, Mr. Wallis? And when you're discussing CEO pay, please consider that a CEO's pay should be commensurate with his/her responsibilities, which far exceed the responsibilities of a corporation's average employee. The "buck stops" with the CEO in regard to personnel management, profits, losses, etc. I'm not lobbying for exorbitant pay and golden parachutes but for that which is in line with bearing responsibilities that typically are not left on the office desk at 5 p.m.
  • DITE
    "This is a fairness issue. The system of employee-employer relations is fundamentally lopsided. There’s a need to level the playing field, to redress a great imbalance."

    What many on the left just don't get is that prices are communicators. That includes labor. There are millions of economic decisions that go into setting these prices. It's not like CEOs sit in a room and say, "You know, let's take more money from our employees and give it to ourselves."

    The economy has changed. Information technology has made white collar workers incredibly more productive. While it has made the blue collar worker or lower level employees more productive, their increase in productivity is not at the same rate.

    And In many cases technology has eliminated lower level jobs. This results in fewer lower level jobs and lower demand for these jobs. Therefore, the price of their labor is lower. The only way to change this quickly is to stop technological advances or to artificially increase the price of labor. Both options have economic consequences.
  • DITE, you are absolutely correct. The employees of CEOs who make "too much" do not have to work for those CEOs. Their labor is a contractual agreement to trade labor for wages, and if they don't like it, they can choose a different venue of trading their labor they feel is more "fair." My hunch is that where they'll find work the CEOs may make a lot less comparatively, but the salaries given to them is also less. (Yes, I know that's not always the case.)

    Supply and demand laws cannot simply be suspended because we don't like the result of those laws. We must work within those means, otherwise we create shortages and surpluses. If raising wages to a "living wage" or some "fair wage" were the solution, why not make minimum wage $100/hour? But nobody seems to be advocating that because that wouldn't make much sense.
  • Eric77
    I agree with Jim that the relationship between workers and employers in some businesses is broken. These businesses and workers need to renew those relationships. And I agree with the statement made by the Catholic Bishops, although I'd challenge them to define the term "fair wage".

    In the end, Jim doesn't make much of case for the EFCA though. And I'm not surprised he doesn't want to get into the details of it.
  • What I think Jim fails to understand is that employees do not HAVE to work for an employer who makes more than they believe the employer should. Nobody does work for anybody else unless they believe it will improve their lot. If Wal-Mart pays me $8/hour, and I don't like it, I still have to choose whether or not I want to trade my labor for money.

    Union supporters somehow believe that since somebody makes a quadrillion dollars an hour, that's "unfair." So please explain to me the definition of "fairness." Does it mean equal treatment? Or is it arbitrary depending on who is in authority? If we go for "fairness," Mr. Wallis, what exactly is fair about a progressive tax? How does that treat all people as equals?

    "Level the playing field" didn't work in Russia, Cambodia, and other nations around the world where the idea was to keep all people "equal" in the productin of goods and services. The reality is, wealth inequality is only a societal problem if you value people by what they make. Union workers make over the median income of those in the United States; they make more than I do, and I make ends meet. To outcry for people who have a living standard in the 95 percentile is incredibly silly and foolish.
  • Stein
    I hate these long threads of discussions where we apparently forget our Christianity and argue from worldly perspectives.

    You ask a lot of questions about fairness. Don't ask Jim; ask God. In particular, what does the bible say about justice? "Does it mean equal treatment?" Clearly not. "What exactly is fair about a progressive tax?" Clearly the status quo of conducting business in this world is not doing a great job with justice. A progressive tax might help to ameliorate that.

    We have a shameful number of homeless and hungry people among us. If you look at the world with God's eyes, how can you possibly advocate a flat tax that will create yet more.
  • A flat tax does not "create" homeles and hungry people. A flat tax treats all people as equal and not deserving special benefits. Besides, I would advocate a flat tax on consumption, not income, because income tax implies government owns part of your labor, which it does not. Also, I would advocate a flat tax above a certain level, say $30,000.

    If we eliminate income taxes altogether, we'd have to go back to the government spending of.... 1997. I don't think anybody would complain with the type of society we had in 1997, because we had low unemployment, most liberals liked it better under Clinton, etc etc. Income taxes only account for 1/3 the taxes in the US. If we eliminated them, spending would immediately increase because people would have more, and the stimulus would happen naturally.

    But that's another topic.

    As for fairness, where are you finding what God defines as fair? God does not show favoritism (that is a quote, can't remember the reference). Why should we? Yes, we should have compassion on the poor. But that doesn't mean that if we have majority vote over society we drag them along with us. If I don't like how the rich are using their "excess money," I still have no right to take it from them and give it to somebody else. "Thou shalt not steal" has no caveats to it. I do, however, as somebody witha moderate level of means, have an obligation to serve my neighbor in need. But that is MY responsibility. If I want to encourage others to do the same, then it is incumbent upon me to encourage them to do so, not employ the State to take their money to use it how I prefer the rich would use it.
  • Stein
    My preference is to leave discussion of "fair" behind and talk about
    biblical "justice". Justice is a much more important goal than
    fairness.

    You say that a flat tax treats all people as equal and not deserving
    special benefits, but that is NOT justice. God's justice assures that
    all people get what they need and recognizes that different people have
    different levels of need.

    You say "Thou shalt not steal" and emphasize that it has no caveats, yet
    still accept taxation as legitimate. I guess taxation must not be
    considered "stealing" -- so I can make no sense out of the argument.

    So what is the purpose of taxation? It is to support government so that
    government can set up a stable society in which we all benefit. Since
    the current economic system disproportionately benefits rich people over
    poor people, it makes sense to ask them to pay the overwhelming share of
    the cost of the system that so favors them. If you disagree we my
    statement that the system favor the rich, then you need to explain why
    the rich stay rich and the poor stay poor. If it did not, then I would
    expect much more fluid shakeup of wealth.
  • Well, I guess I did waffle a bit, there, but only to make a consent that since we must have taxes, all should be taxed equally. The Fair Tax is also an alternative to what we have, and the rich would be taxed more simply because they consume more.

    Your notion of justice may be correct, but justice cannot also violate other principles, such as not favoring one person over another, respecting each person as made in God's image and given property to steward for his Kingdom. I do believe taxes are coercive, and therefore is "theft," though since it is an undeniable part of life, I would like to minimize the theft and treat people as equals, not as somebody to be plundered because they have what I consider to be "excessive resources." That, my friend, is envy and it is equally as immoral.

    In the end, "fair" has a debatable definition, so perhaps we'd want to come to a conclusion on what "fair" means. Also, you are correct in that justice is "more important," yet I do not believe it is just to take from one person to give to another. Loving your neighbor (the second greatest commandment, repeated by Jesus) means respecting your neighbor's property and belongings. If you love your poor neighbor, you will help him. If you love your rich neighbor, you will not envy what he/she has, no matter how much you think their money could be better allocated.

    Please explain how a flat tax would create homelessness and poverty?
  • Stein
    I see people struggling. I see people living at the margins who are in
    danger of losing their homes.

    My assumption is that a flat tax will turn out to be tax relief for
    people who are NOT struggling, and either result in a loss of help-money
    or an increase in tax (to make up the difference and keep the roads
    paved, so to speak) from those who are struggling.

    You may challenge my assumption that a flat tax will shift the tax
    burden down to people in lower economic positions. But if the
    assumption holds, it is a direct consequence that doing that shift will
    result in marginalized people being hurt. That kind of hurt is what the
    prophets of the Old Testament challenged the society of their day about.

    I opt out of this discussion. I think our underlying assumptions about
    the whole purpose (God's whole purpose?) of society/economy differ --
    and unless we are willing to dig at those roots, we can't possibly
    agree, e.g., whether tax is theft or not. That digging is not
    appropriate for this thread.
  • Thanks for the discussion. It's the most sensible i've had in a while.
  • DITE
    There is quite a bit of fluidity w/r/t wealth.
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