Rationing Health Care

I forget which of the several great blogs I owe thanks to for pointing me to Secondhand Smoke.  Good coverage of ethical issues, and over the past week there have been a few posts specifically on health care and end-of-life decisions.  Look here for a brief report about how the British healthcare system rations expensive medicines.  And here is an article about a family that wishes to dehydrate-to-death a family member who has become severely disabled by a stroke — of significant concern is the cost of nursing care for the patient.

I wanted to point out two issues that these articles raise:

First of all, making cost-versus-benefit decisions about medical care is normal and rational. Resources are limited, and both length and quality of life can be subject to opportunity costs. As a wife and mother, frankly I’m all about making this life’s inevitable suffering and end as frugal as possible.   There are times when my family’s money is better spent on some other purpose than my medical care.

Forgive me if I shock you, but shouldn’t my money be spent on my happiness?  If I find greater marginal utility in spending $10,000 on college tuition for my children, rather than on a year’s supply of a prescription drug of doubtful longterm benefit, do I not have the right to spend my money as I see fit?  If it is acceptable for me to give up my life of housewife luxury in order to toil away in a fluorescent-lit cubicle farm, in order to provide some perceived good for my children, am I not also allowed to give up that same number of days of housewife luxury, for the same benefit to my children, if instead of a cube farm I find myself suffering at home, or in purgatory, doing some kind of work arguably no less valuable than whatever clerical job I might have gotten in the first case?

So what’s wrong with a nationalized health care system making rationing decisions?  The same thing that would be wrong with a command economy telling me I am required to take that clerical job.  These are my decisions to make.   The catholic name for this principle is ‘subsidarity’.  From CCC 1883:

Socialization also presents dangers. Excessive intervention by the state can threaten personal freedom and initiative. The teaching of the Church has elaborated the principle of subsidiarity, according to which “a community of a higher order should not interfere in the internal life of a community of a lower order, depriving the latter of its functions, but rather should support it in case of need and help to co- ordinate its activity with the activities of the rest of society, always with a view to the common good.”

Any health care system that violates the principle of subsidarity — taking health care decisions out of the hands of the patient and making them subject to the preferences of the state — is not morally sound.

The second point that came to me, especially reading about the beleaguered stroke patient, is that we as a culture seem to have lost all concept of responsibility for caring for family members.  Let me be the first to say that I find nursing to be icky work.   There’s good reason I went into accounting and not health care.  I can barely stand to change my own kids’ diapers, why would I want to change anyone else’s?

But contemporary America has decided to completely forget about the work of caring for the helpless.  All those housewives who ‘don’t do anything’?  They’re, um, taking care of other people.

–> Ever notice that if you don’t take care of your own children, you have to pay other people to do it?  It’s because childcare is actual work.  Same story with making dinner, vacumning, cleaning toilets, all that stuff.  When people decry the ‘high cost of childcare’ I want to shake their shoulders.  Don’t you know that the nice lady who keeps your kids for you has to feed herself and her family, too?  There isn’t a ‘cheap’ method of caring for children.

And the same is true of nursing care.  Fine and good if you as a family have decided that expensive hospitalization and advanced medical procedures are not how you wish to spend your money for the care of ill family member.  But you can’t anymore decide that therefore *nobody* should feed the poor guy, just because you don’t want to pay someone to do it for you — anymore than you could decide that since daycare is so expensive, just leave the baby home alone and unfed while you go to work all day.

And now we’re back to subsidarity.  You can’t have it both ways.  Does the state have a responsibility to pay for the care of your children?  Then you have given up your right to decide how that child will be treated.  Does the state have a responsibility to care for your elderly, disabled, father?  Than you again have turned over your rights.  Because these are, fundamentally, your rights.  Your rights, and your responsibilities.

We are slipping more and more from the notion that the state has a legitimate role in assisting the most weak and vulnerable among us — the orphan, the childless elderly, the abandoned and helpless — to thinking that the state has the obligation to care for all of us.  It isn’t so.  What the state does for those most in need, it does on our behalf — the church, or some other private group or individual, could as easily do the same.  In a secular nation, it is not unreasonable that our government be a logical choice for representing us in these works of mercy.

But they are, all the same, our work.  Our responsibility.  We have a collective responsibility to the poor in our communities.  We have an individual responsibility for our own family members.  And claiming and fulfilling that responsibility is the only way we can hope to hold onto our freedom.  Which I suppose makes a homeschooling housewife a rather patriotic sort of worker.

thought for food

Darwin Catholic makes a pointed Thanksgiving observation about how far removed most Americans are from the source of their food:

. . . we modern Americans would do well to recall that food comes from somewhere — and indeed that it either comes or it doesn’t. One may talk of rights to food and shelter and medical care and such all day long. But at the most basic, human level: our existence and comfort depends on those who till the soil . . .

And what I would like to observe is this: Farming is skilled labor.

When I read about the history of education, it seems like what usually gets published is the history of literacy.  The underlying assumption is that if a child isn’t taught to read and write, he isn’t taught.

Don’t mistake me, I am enormously in favor of the widespread practice of literary skills, and have the bookshelves and the blogs to prove it.  But at the end of day, I know two things:

-I can’t eat books.

-I don’t know how to farm.

And from this, I make two further conclusions:

– Farming is, on the list of human pursuits, priority #1*.

-Farming is a skill that needs to be taught.

This in turns tells me that all those generations of people who taught their children how to grow food, but never did get to the business reading and writing, these were people with their priorities in order.   People to whom the rest of us owe an enormous thanks, for it is their diligence that gave us our existence.

I am concerned that my generation knows so little about the growing of food.  The SuperHusband & I both have grandparents who grew up on farms; as adults though they practiced other professions, they continued to grow a significant portion of their own food.  The same can be said of several of my neighbors — like my grandparents, they either have very large gardens in the yard, or else own a second parcel of land they cultivate for food.

But this skill and practice has not been handed down.  My parents gardened occasionally — they knew how — but not so much that they taught us.  Our generation wants to have a garden, and we’re pretty happy if we get a few tomatoes out of it.  It is a skill we never learned as children, and don’t integrate into our lives as adults.  We seem to always be finding some other activity is more important.

We aren’t starving as a result.  Specialization of labor has done what it promises: those of my generation who do know how to farm, do it amazingly well — well enough to feed the rest of us with no apparent difficulty.  And I’m all about specialization of labor — I haven’t got the body for farming whether I wanted to do it or not.  (And I like doing other things anyway.)  But still, I think we are, as a society, over-specialized to the point of being a bit impoverished by it.  It’s a poverty we don’t notice, but I think it is there all the same.

*Alongside the worship of God, of course.  The two seem to go hand in hand rather naturally . . . wow, almost amazingly joined as, say, the body & soul that make up a human being.  Go figure.

Ridiculously tired today, and as I’m finally getting around to writing tonight, my head is about as foggy as I’ve ever known it. So rather than try to put together a good article for you (lost cause), I’ll just let loose on something funny I read during the last weeks of the presidential election campaigns.

**

So the Wall Street Journal ran a series on the editorial page comparing the two major candidates’ stances on various topics. Shoehorned into the ‘education’ category was the topic of volunteering. Working from memory, here’s the executive summary:

McCain: Tells people they really ought to volunteer more.

Obama: Plans to expand the Peace Corps and launch a handful of similar government-run, tax-funded volunteer organizations to target other areas of need (education, local community service, etc.). Encourage mandatory ‘volunteering’ by tying certain federal education funding to community service requirements for students.

Not to jump all over our president-elect (really, if this were his only fault, I’d be a very happy person), but what?! It’s volunteering. I have never, ever, in all my long life, had difficulty finding an outlet for my freely-offered labor. Hard time finding a paying job? Yes. Yes indeed. Hard time finding people willing to hire me for no pay? Nope. Not once.

And here we are, a government in debt, with expensive wars and corporate bailouts going on, and we are going to spend more money on more programs . . . so people can work for no pay? Um, really, they can do that without a government program. If you have to pay people to do a given job, it is not actually volunteering. It is a federal program that pays a very low wage.

(–> Now if what you want is a low-wage jobs program, just come out and say so.)

I expect the origin of this particular plank of the campaign platform came from two bad habits we’ve gotten into. The first, is thinking that if our country has a problem, or a perceived problem in this case, the president ought to have a plan for how to fix it. When really, some of the time, the president ought to look us sternly in the face and say:

Well, get your act together.

But I suppose that is not very popular with voters, and we have thus trained our candidates to pretend they can fix us.

And then from there, it is only a matter of what kind of fix the candidate is used to tossing out. As a democrat, a shiny new program, or a beefed-up old program, is just the thing. If a republican felt the need to propose a fix, it would be a tax deduction, a tax credit, or maybe a special law allowing employers in certain altruistic industries to hire workers at lower-than-minimum wage.

[Republicans are at an advantage in this particular example, because we already have the tax deduction thing in place. Now they can just smile and tell their voter base to go start a 501(c)3 and be done with it. I agree. But don’t kid yourselves, if republican voters were still itching for more help in the ‘volunteering’ department, I am sure, just sure, there is a way to make a corporate subsidy for the purpose.]

**

What significance for the junior economist? Well, a couple summary points:

Our candidates can’t necessarily add, it isn’t your imagination. I think ‘economic platform’ ought to be read as a kind of form of poetry, one of those genres that you must not read literally. Luckily much of what they put on their economic platforms would never pass through congress anyhow, so in the off chance they really mean what they say (the policy-platform equivalent of discovering that someone really does have butterflies in their stomach, or that cats and dogs truly are falling from the sky), there is still hope that it won’t come to pass.

Really smart people can still come up with dumb ideas. (Just ask my children about their mother.) As I mentioned in my ‘why economics is so confusing’ post, sometimes when something doesn’t make any sense to you, it is because it doesn’t make any sense, period.

If we voters actually want ‘change’, we are some of the people who are going to have to change. We can’t be pushing for a federal program or a new law or some other government action every time we see a problem, and then be surprised that our politicians are always trying to come up with new programs and laws for us. Do you want a shorter tax form? Quit asking for so many tax credits.

–> And so long as we evaluate a candidate’s stance on a given issue based on whether they voted to fund this or that special program, or put into place this or that new law, we are going to keep getting the programs and laws. It is entirely possible to be, say, in favor of helping the poor, without necessarily voting in favor of every bill that is labeled ‘help for the poor’.

And this last bit is tricky. Because if your representative voted against this or that social justice bill, how do you know whether it was because of an anti-social-justice bias, or just a disagreement with that particular bill? It means you have to know the candidate much better, over a much longer term. Which is not easy.

Wealth, Abstraction, and the Too-Vivid Imagination

An internet friend asks: Why do I find this economics stuff so confusing?

I could only guess, but knowing her to be an intelligent, financially-responsible type of person, as well as the mother of four children, my thoughts immediately went to potty training.

Potty training? Here’s why:

One of the famous potty-training motivation techniques is the Sticker Chart. We used a sticker chart once, and it was spectactularly unsucessful, but other people find the stickers quite helpful. You put up a calendar-type chart, and each time the child uses the potty, you put a sticker on the chart. If yours is a child who is highly motivated by the earning of stickers, this can be just the thing to motivate the ready-but-reluctant preschooler to make the move into world of No More Diapers.

What does this have to do with the ecomony? (Sorry, no it isn’t the potential for toilet humor.) It is this: The stickers provide a record of your childs’ potty-training accomplishments. More stickers on the chart is evidence of more sucessful trips to the bathroom. Nice little visual indicator to see how the whole program is progressing.

Economics is like this. Instead of sticker charts, we used things like “GDP” to represent national wealth production or “the Unemployment Rate” to represent how many people are looking for work.  [We call these types of calculations ‘economic indicators’.  Just like the number of stickers on the chart is an ‘indicator’ of how potty training is coming along.] It should all be pretty simple. You have to learn a little more than Shiny Star = Pants Clean and Dry, but the concept is the same. Most people understand the real-world concepts behind unemployment or GDP, so learning the technical terms and how they are calculated is not all that hard. If you’re a person who can balance your own checkbook (my friend is such a person) you can learn economics. Given a good instructor, anyway. (I was blessed with a handful of these.)

But the trouble is this: Sometimes economic-policy talk degenerates into sticker management. Rather than focusing on “is my child making progress in using the potty”, we work on managing the indicator – how many stickers are on the chart? How can I get more stickers up? If I can just get a few more stickers up, that means I’m closer to Diaper Emancipation, right? Maybe I should start giving more stickers per trip to the potty, that’ll help my chart fill up faster . . .

Think I’m kidding?  I once read an actual economics professor (remaining nameless to protect the guilty) state something along the lines of, “Hurricane Katrina will result in increased wealth because of all the proceeds from insurance companies and the employment due to rebuilding.” That’s right. Money is changing hands, which increases GDP, and unemployment will be helped by all the new jobs in construction, therefore, we as a nation are richer because the gulf coast was just destroyed? No no no. The hurricane *destroyed* wealth. The fact that we’re going to replace a portion of what was lost does not make us wealthier.

Put concretely: I had six apples. Five were destroyed. I picked two more off my tree. So I’m richer than before, because I just earned two apples? No. I’m still three apples poorer than when I began. Looking at income alone doesn’t tell the whole story.

***

We get into economic trouble, whether in our personal life or as a nation, when we lose track of our economic reality. When we get too focused on managing a calculation, and too little on the facts behind that calculation.

The mortgage crisis, and the resulting credit crisis, are a classic example of imaginations run wild followed by sober reality. I [the hypothetical homebuyer] imagined I could afford a house, because I qualified for some kind of loan and was, at the time, capable of making the payments. My lender imagined I could afford the house for the same reasons. We used the fact that we were able to make up a financial instrument – a calculation – that ‘proved it’ to us. Perhaps we persuaded ourselves that rising housing costs were based on some inherent increase in the value of homes, rather than a temporary surge in demand over supply, and used the ‘promise’ of a continued rise to justify excessive borrowing.

And then reality struck. Now we have a ‘credit crisis’, in which lenders are doing crazy stuff like saying that if can’t you afford to pay for a particular car, perhaps you should buy a less expensive one. The Wall Street Journal is reporting that about 64% of car loans are being approved as of Sept. 20^th. Down significantly from an 83% approval rate a year earlier – but knowing what we know about American’s spending and lending habits a year earlier, one has to wonder if maybe it is simply lenders catching on to the financial reality a little bit more quickly than borrowers?

I’m not saying there is no crisis whatsoever. The normal thing for humans to do in the face of disaster is to over-compensate. After a fire, we become hyper-vigilante about fire safety. After a car wreck, we become excessively cautious drivers. After a credit fiasco, we become overly cautious about lending. (And we ought to become more cautious about borrowing as well.) The potential for a real downward economic spiral is certainly there.

But we kid ourselves if we think that we, as a nation, ought to try to manipulate the markets in order to return to the old ‘normal’. Because the old normal was built on imagination, not reality. Large amounts of debt are a sign that we are pretending to have wealth we simply don’t posess. We were pretending, as a nation, to be richer than we were. In potty-training speak, we were handing out too many stickers. We are not significantly poorer now than we were a few months ago – but our numbers look quite a lot worse, because they are now closer to reality.

I don’t think nothing should be done. We are in the post-traumatic-stress phase of an economic eye-opener, and we need to make sure that we, as a nation, don’t curl up into an economic corner become completely dysfunctional. We do need to make sure that those who are most vulnerable economically can ride out the wave of post-crisis panic without suffering physical harm (hunger, lack of medical care, sleeping out-of-doors, etc.).

As I write this, the bailout just passed the House. I’m afraid at this time the best I can manage is a gape-mouthed, ‘Wow, that’s a lot of money.’ (Same reaction I’ve been having for the past week or so – apparently I’m consistent this way.) But I will say: Inasmuch as the bailout is based on trying to bring the American economy to a viable, stable, realistic level of activity, it has the potential to be helpful. To the extent that the bailout is designed to make things look good, to build up a ‘confidence’ in the economy that is really foolish bravado, it will only be a very expensive way of putting ourselves back into trouble.

[BTW, I promised my friend I would try to fish out a really good library book that teaches Econ 101 in a readable, understandable manner. If I find it I will post it here.]

bailout commentary

This friday we’re up for an economics post again, and what timing.  I’ll sit on my hands until then, because I don’t have anything to say (yet) on the bailout that isn’t being said better elsewhere.  To summarize: I am a Jim Curley dittohead.  (Reading from Oct 1 down – not linked to any one post, because he has a handful of them.)

The living wage, health care costs, and structures of justice

When we talk about what a living wage should include, I think health care is the hardest to pin down. It’s fairly easy to know whether a person is clothed or has enough to eat. Housing is a bit more of a moving target – how much space does an individual *really need*?, we wonder; but still, “keeps me warm, dry, and safe” is a fairly straightforward criteria to assess.

Healthcare, though, is its own special world. Between the life-versus-death and quality-of-life type questions it poses, and the ever widening options for medical care, it is very hard to know and agree about what is the ‘right amount’ of health care. And if you don’t know how much your employees deserve, you can’t know whether you are compensating them adequately in this area.

Still, just because we aren’t ready to answer every question about health care doesn’t mean we shouldn’t try to answer a few to get started. Doing so may, in turn, shed light on further questions.

The other week Darwin posted A Case Study on Costs and “Basic Health Care”, and I saved it in my bookmarks for linking here. If you haven’t read it, you need to go read it. If you already read it once, go back and read it again.

[BTW, having given birth four times in recent memory, I can vouch for the reality of the situation he describes — lest anyone dismiss this as an isolated or extreme example. No, this is the birthing business as usual, pretty much the new normal in the United States.]

Here’s a quote that summarizes:

As it stands, our medical system is built around the assumption that cost is no object. And doctors are very heavily penalized based on any “avoidable” injuries or deaths that occur on their watch. The result is that instead of providing good, high quality “basic” health care, and using extreme (and expensive) measures only when necessary, we often require extreme measures “just in case”. This makes it far, far more difficult to provide “basic” health care to all.

And here is what I want to say: Wake up Republicans! Health care reform is waiting for you! When I talked about ‘structures of justice’ this is exactly the kind of thing I meant. Do not labor under the illusion that a just society – one in which the poor are not trampled underfoot – is the sole province of the dreaded far left. There are good conservative solutions to these kinds of problems, and if we as a nation were to actually enact them, well, the left would have a lot less fodder for their tendency towards grand socialist fantasies.

The living wage is not a left- or right- wing ‘agenda’. It is a moral imperative. You cannot be a just person if your profit or your comfort depends on other people giving you their labor, and you not providing them the means to live in exchange. The good news is, that if we are willing to care about the people who are too sick or too in debt or working too long of hours to be actively engaged in the political process, we can come up with sensible, free-market-compatible ways to create a just society.

To Each According to His Need?

1^st Friday, so we’re back to economics, and continuing with the living wage series. To see the whole series, click on the ‘living wage’ category in the sidebar.

***

Today I want to tackle what I think is one of the thorniest of catechism’s bits about the living wage. Let’s just jump right into it:

“In determining fair pay both the needs and the contributions of each person must be taken into account.” CCC 2434.

The catechism goes on to list what kind of needs we are talking about:

“Remuneration for work should guarantee man the opportunity to provide a dignified livelihood for himself and his family on the material, social, cultural and spiritual level . . .”

Put these two together, and we come to a very counter-cultural conclusion: A just wage is not simply ‘equal pay for equal work’ or ‘how much your work adds to the bottom line’. Workers’ wages should also take into account how much the workers need to support their dependents. The thorny bit: the worker’s need is going to vary according to family size.

Let the objections begin . . .

A common one goes something like this: “But what about the single mother of twelve who is unable to do anything more skilled than bag groceries, and she lives in southern California? You mean I have to pay her six figures to do a minimum wage job or else I’m going to hell??”

And then there is the more personal: “That’s not fair! Why should the programmer in the next cube, who has the same degree as me and does the exact same work, get paid more than me just because he has a wife and three kids to support, and I’m still a bachelor?”

The first objection refers to an extraordinary case; like all extraordinary cases, it distracts us from the vast teritorries of normal family situations, which is where our attention really ought to lie. We can’t possibly know how to deal with exceptions to the rule, unless we know how to apply the rule to the situations for which it was made. The second objection invites us to remember some of the perfectly reasonable ways employers already solve this problem, without needing church or state to tell them they must. We’ll look at each point in turn.

1. How this all works in the ordinary cases.

Under ordinary circumstances, workers tend to increase in productivity over time. As it happens, people also tend to gather more responsibility in their private life over time as well. A teenager may not have very many work skills, but he typically doesn’t have any dependents, either.

With more experience and education, the worker’s ability to contribute to the profitability of a business increases. In a justly-ordered economy, it is reasonable to assume that a man in his twenties has acquired enough work skills to be able to support a small family. By the time he has a larger, more expensive family, he ought to also have acquired more skills and experience that make his contribution to the business that much more valuable.

It should be noted that the increase in usefulness to the business over time is not only due to collecting additional technical skills. A factory-line worker may be doing the same type of work after so many years on the job, but with experience can be counted on to train other workers, deal with problems in the equipment, be respsonsible for leading a team or for developing ways to improve production, and so forth. There is much more to widget-making than completing the one-week widget-machine operation course. It is reasonable for employers to pay workers higher pay as they grow in experience, even if they continue to do the same general type of ‘low skill’ work.

Likewise, workers changing industries, or returning to paid work after a long absence to care for family members, are not teenagers again. Though they may not be able to contribute as much to the business (or not in the same way) as someone who has built up a repertoire of industry-specific technical skills, under normal circumstances they should not be considered ‘entry-level’ workers. Employers are right to recongize the skills that come with maturity and years of experience handling responsibility, and to compensate the newly-hired older workers accordingly.

In summary: The normal model for the human lifecycle is harmonious with the church’s teaching on just wages.

So what to do with the exceptional cases? You have to treat exceptions to the rule as the exceptions that they are. The solution is often going to fall outside of the realm of just wage rates. But most people shouldn’t fall into the ‘exception’ category. It is normal for adults to get married and have children – being able to support a large family should not be a privilege for the upper middle class. It is normal for workers and their family members to have health problems, even to die – providing for medical care and life insurance should not be considered above and beyond the just wage. Which leads us to the other point I’m going to address today.

2. Fair solutions to the ‘unfairness’ problem.

My point in this section is simple: We already have, within the american economic tradition, a means of providing a just wage to workers that takes into account individuals’ varying needs. By paying workers a base wage based on the specific job, and then offering additional benefits (medical insurance, dental coverage, etc) that scale up according the number of dependents, companies manage to strike a balance between equal work for equal pay versus taking into account the needs of the worker.

It is a model that expands well. According to local needs, this approach could also be used to include benefits such as school tuition for dependents, a housing allowance that depends on family size, and so forth.

This is isn’t the only possible solution, but it is one. I mention it both because it is a viable tool, and because I want to emphasize that the whole notion of ‘taking into account the needs of the worker’ is not some foreign idea being foisted upon us; it is a concept that makes enough intuitive sense that we already do it despite ourselves.

***

Next week’s planned topic is a bit of a history-book rant. I promise not to make too many of these, but it’s just so hard to resist when someone tosses out an argument as if begging me to scoop it up and chuck it back. (In this case the work came from fellow amateurs at history, though professionals in their regular fields of expertise.) And if I do go that route, my goal is to follow it on the 3^rd Friday with a book review of a history book that I actually like, a lot, just to prove to you that I’m not grumpy about everything all the time. Plus it’s a good book.

Nice post at Darwin Catholic on the habit of thinking large government programs are the best way to handle social problems.

Something that concerns me with large American-government programs, is that we tend to be too rich about it. We spend money we don’t have, hence the huge national debt. I’ve noticed in contrast that when help is provided by immediate friends and neighbors:

1) Recipients expect less, and seek to do more for themselves first

2) Donors have a better sense of what they can and can’t afford

–> this even though the giving can be downright sacrificial.

It is hard to ignore needs that are right in front of us, and easier to evaluate them. When the donor is our friend or neighbor, we are more aware of the sacrifice they are making.

But privately-provided mutual aid depends on us knowing each other. In a society where we don’t really live with each other, such a system simply can’t be. We can’t know each other’s needs, because our lives are too separated. And when our lives are separated from one another, it is harder, logistically, to provide for a need even if we know of it and want to help.

As I understand it, the Amish communities that Darwin cites really do live together. They work, socialize, recreate and worship all with the same people. I don’t think every element of Amish culture needs to be re-created in order for wider American society to depend more on mutual assistance and less on governmental programs. But I do think that particular aspect of community life is absolutely essential.

On a related note, Jim Curly at Bethune Catholic has a post up about Chesterton, automobiles, and small farmers. Another piece of the same puzzle.

Structures of Justice

The Living Wage – Structures of Justice

From CCC 2425: Regulating the economy soley by centralized planning perverts the basis of social bonds; regulating it soley by the law of the marketplace fails social justice, for “there are many human needs which cannot be satisfied by the market.” (CA34). Reasonable regulation of the marketplace and economic initiatives, in keeping with a just hierarchy of values and a view to the common good, is to be commended.

In the land of social justice activists, sometimes the terms “just structures” or “structures of justice” gets thrown about. And when I used to hear those terms, good student of classical economics that I was, I would shudder. Because I was certain – certain – that what the speaker really meant was “we should all be socialists”.

Now the sordid truth is that sometimes – sometimes — talk about “structures of justice” really is codespeak for “You should pass this disasterous piece of legislation that sounds good but is completely divorced from reality and will harm us more than it helps us.”

But it doesn’t have to be this way. And the purpose of this article is to look at what a “structure of justice” might be, and how it fits into a morally sound, economically efficient society.

So what is a “structure of justice”? For our purposes today, a “structure of justice” is anything that is: a) firmly established by society b) that is actually *optional* and c) that changes the balance of the social and economic system.

a) “Firmly established” because it is, after all, a “structure”. It can be a legal structure, such as the tax code or the right to vote, or a physical structure, such as a bridge or a hospital.

b) “Optional”: We often fall into the rut of thinking that because something exists, it must exist. We currently fund the public hospital via property taxes, therefore we *must* fund the public hospital through taxes, and we must have *property* taxes to do it with. Not so. Hospitals can be privately funded, or publicly funded through some other system. Another example, laws against homicide: Now we really must have a law against homicide, nothing optional about that. But we are in no way required to have the exact particular organizational structure and funding system for enforcing that law that currently exists in our community. We could do things differently, and that would . . .

c) . . . change our society. We tend to think of “how things are now” as being “neutral”. No, no. This is the great blind spot of “laissez-faire” economics – the notion that you can somehow have a neutral set of laws and institutions. The various structures we have in place in our society right now are having a constant impact on how our society is – what it is like to live here, who benefits, who suffers, all of that. What we have now is not neutral, and we cannot get to netural. There is no such thing as an economy or a government that is “hands off”, that lets society run its “natural course”. No such thing. Every government, or lack thereof, has its impact.

Here’s an example:

Sidewalks

Where I live, there are almost zero sidewalks. Therefore, children who are zoned to “walk” to the local public school, do not have a safe way of getting to and from school. People who are unable to drive a car for whatever reason (financial, physical, etc) do not have a safe way of getting around town. Even where there are sidewalks, wheelchair (and stroller, and children’s bicycle . . .) accesibility varies from poor to horrendous. How does this change things?:

-Even if you live within walking distance of the place you want to go, you cannot walk there.

-Therefore, you must drive a car.

-Therefore, in order to participate in ordinary social functions such as shopping, working, going to school, visiting friends and relatives, you must be able to afford your own car, and be able to drive it, or find someone to drive it for you.

-Because everyone drives everywhere, obesity and its resulting health problems are becoming widespread. (And because there are few places to walk safely, it can be quite difficult to get out for exercise.)

-Because everyone drives everywhere, pollution is a problem.

-Because businesses must provide large amounts of parking for customers, it is more expensive to operate a business.

-Because businesses must provide large amounts of parking for customers, all the resulting asphalt creates storm water drainage problems.

-Because of all the pavement, our commercial districts tend to be about 10 degrees hotter in the summer than what our normal climate ought to be. Which means we spend more energy on air-conditioning to compensate.

-Because many people must walk (because they cannot drive or cannot afford to drive), even though there is no safe place for them to do so, a certain number of pedestrians are killed every year by motor vehicles. [Though as it happens, in our city, once the proper number of school children have been killed, the local government will, eventually, put in a sidewalk for the survivors.]

Now before you get too excited about my sidewalk rant, let’s reverse it.

Roads:

-Provide us a way to move large quanities of goods efficiently.

-Allows emergency vehicles to access the community quickly and efficiently.

-Allow citizens to travel longer distances with more flexibility than either mass transit or walking and cycling permit.

-Therefore local neighborhoods can remain more stable, even as economic conditions fluctuate – you don’t need to move if you get a job across town, you can reasonably hope to commute. Both spouses can work outside the home without needing to find jobs that are in the immediate area. [Mass transit does this to a certain extent, but tends to favor certain routes, and tends to offer less flexibility than an expansive road network.]

-Makes it possible for institutions [churches, schools, dentists, grocery stores] to set up a single location from which to serve people from a wide geographic area.

You could build your own examples. For example, how does your local property tax structure change the incentives for holding onto different types of real estate? If you had to pay tuition to attend your local public school, would it change your educational choices? [Most of my catholic friends send their children to public schools, which are already ‘paid for’. I balk at high parochial school tuition myself.] What about if there were no public library? [As a homeschooler, I’d be sunk. I live for that place.]

—> The point is this: As a community we tend to fall into the assumption that how things are now is how they have to be, and that any change is ‘extra’. In reality, how things are now is how we are actively choosing them to be.

Now what does this have to do with a living wage?

This: Structures of justice are going to change the living wage. If your workers must own a car in order to get to and from work, you are going to have to pay them more than if they can walk or bike to work. If your local land use policies discourage local agriculture, food prices are going to be a lot more sensitive to fuel prices – which means that when fuel prices go up, the living wage will go up, even if food production itself is not affected.

And in this way, the living wage provides something of a feedback loop. Say, for example, that the local laws lend themselves to concentrating most land ownership into the hands of a few wealthy landowners. Well in that case, employers are going to have to include in their living wage income to cover relatively high rents for their employees’ housing. (Monopolies and oligopolies tend to charge somewhat higher prices.) Which gives employers an incentive to change the local legal structure to encourage more small property owners, so that the wages employers must pay can be lower.

–> When employers are obligated to pay a living wage (whether by law, by social pressure, or by personal moral conviction), a kind of solidarity develops between employer and employee. And then the most basic economic force – personal self interest – can do its job to wake us up to which structures in our society are helping us, and which need to be changed.

The Living Wage: What is it? – pulled from old blog

The last of my old living wage articles, originally posted: October 30, 2007

A question that seems to come up frequently in living wage discussions is “What is the living wage?” This is sometimes used as a (poor) rhetorical device, tossed out desperately, as if to say the fabled concept is unknowable, and therefore not worthy of debate.

Or the question is sometimes used to suggest that the “living wage” being advocated has a meaning so rediculous (McMansions, SUV’s, a television in every pot) that those who propose it are some kind of bizzare breed that answers the question of, “What do you get when you cross a socialist busybody with a greedy materialist?”.

But it is also a question that can be asked sincerely, and deserves as sincere an answer.

***

First some thoughts about poverty. I have seen the “what is poverty?” philosophy from the pen of people who elsewhere have proven they really do know poverty when they see it. And there, I saw two types of confusion. First, confusing relative poverty with absolute poverty. Secondly, confusing happiness, contentment, or even resignation, with adequacy.

I think the church teaching on the living wage deals primarily with absolute poverty, not relative poverty. It isn’t about whether a worker can only afford one coat in a society where the norm is to own half a dozen. It is primarily about making sure the worker can purchase the coat he needs.

As we have seen in previous posts, the living wage does not rest with paying “the market rate”. It follows that however much a worker may be willing offer his suffering joyfully, and find happiness in life even when deprived of basic needs, the church does not allow employers to therefore pay suffering-inducing wages.

Likewise, we cannot say the worker earns an adequate living merely because he earns as much as anyone in his position always has earned. If generations before him also shivered in the cold for lack of a coat, that does not mean we of this generation are excused from paying coat-wages.

***

Because the living wage deals with specific, objective human needs, it is not all that difficult to make a good approximation of what constitutes a living wage. Let us look, for example, at what kind of housing a living wage ought to be able to purchase:

Adequate housing is the kind that keeps out dangerous animals and holds up to reasonably-expected weather conditions. It needn’t be flood-proof if it is built in an area that last flooded at the time of Noah; it needn’t have its own heat supply if located in a climate where the sun provides all the heat a family could want. But yes, in an earthquake zone, it ought to be built so as to not kill its inhabitants when the earthquakes come, nor to leave them homeless afterwards. There ought to be easy access to safe drinking water, and a means of safely disposing of human waste. And so forth.

The exact construction details are going to vary from place to place. But if you live or travel in that place (as you would, if you had employees there), you could figure this out fairly readily. If you needed to, you could rely on the ever-useful “what if it were me?” questions. “What kind of housing would I need, if I were one of my workers, and lived in this place?”

And once you know what it is your workers’ wages must pay for, the calculation may be tedious, but it is doable. It is not so difficult to find out what local rents are, and see what sort of housing those rents buy. The amount of rent (or mortgage payment) it takes to inhabit safe, decent housing, that is the amount a living wage needs to cover.

The calculation is the same for the other human needs. How much does it cost to purchase clothing? To buy nutritious foods? For safe transportation?

The living wage is, in this respect, terribly simple. Financial advisors are forever telling people to make a budget for personal expenses; the living wage is the bottom line of an adequate but frugal budget.

This is the kind of the thing the local Better Business Bureau could publish. An accounting firm – the same one that audits your financial statements, for example – easily has the skills to put together such an analysis. Chances are the workers in question have a fairly good idea themselves, too.

***

I don’t say that living wage calculations are an exact science; people can reasonably disagree over the precise bottom line. Witness the wide variety of housing that Habitat for Humanity builds around the world. Some of that variation must represent a margin of error, or a range of disagreement, in calculating a living wage. (Or in habitat’s case, what a living wage would buy, if it were paid – Habitat’s clients are the working poor).

But Christianity isn’t a math test. I can’t imagine that on Judgment Day Jesus is going to turn to one business owner and say, “You paid your workers too much! Who needs sneakers when sandals will do?!” and to another, “You paid too little! Anyone born after 1970 was supposed to have air-conditioning!”

On the other hand, it isn’t unreasonable to fear hearing our Savior ask, “What part of ‘the children shouldn’t have to play in untreated sewage’ didn’t you understand?”

The essential thing is that we make the effort required, and make it in good faith. And then that we carry it out. Better to be off by 5%, but to pay the wage, than to not bother in the first place for fear of an honest error.

***

This moral burden falls first of all to business owners and managers. In a lesser it way, consumers, too, need to do what they can to support the living wage. The government’s part is to put into place those “structures of justice” that support, rather than undermine, this moral imperative.

Asking “What exactly is a living wage?” is a legitimate question, for those who mean to find, and live out, the answer. A good catholic can have doubts about what role minimum-wage laws should play in it all, or agree to disagree about what sort of meals a worker ought to be able to afford. But the question ought not be used as an excuse for rejecting the moral teaching the church. Rather, because the question can be answered, it behooves us to see it answered and implemented.