High wages, low wages, and morality

It's unusual for a controversial economic issue to be fought on moral grounds. But ACORN, a public advocacy group, has been winning a higher "living wage" for workers in state after state, city after city, by appealing to voters' sense of justice.

"It's probably the best [argument] we have," says Jen Kern, director of ACORN's Living Wage Resource Center. A decent income is a moral matter of "fairness," she says. Those who "play by the rules of the game should be able to support themselves by their work."

"A job should keep you out of poverty, not keep you poor," agrees Paul Sherry, coordinator of the Let Justice Roll Living Wage Campaign, a church-based coalition in Cleveland seeking to raise low wages.

According to the father of classical capitalism, Adam Smith, a Scottish professor of moral philosophy at Glasgow University in the 1700s, the "invisible hand" of self-interest ensures the most efficient use of resources in an economy, and public welfare is a byproduct.

Today Americans are mostly content to let market forces - that is, the law of supply and demand - determine the wage levels for the multiplicity of jobs, professions, and positions that make the economy work. It would be extremely difficult for a bureaucratic group to make detailed, comparative judgments as to the real value of various occupations and place a specific wage level on each.

But at some point, the extremes in wages resulting from what is called "free enterprise" begin to violate people's sense of common justice. They chuckle, then, at the portrayal in a Boston Globe cartoon of two bosses in a fancy office saying to three workers: "Why should you have a minimum wage? We don't have a maximum wage."

As it is, an employee working full-time at the federal minimum wage of $5.15 an hour makes $10,712 a year, about $1,000 above the official poverty level for an individual ($9,654).

At the other end of the scale, the compensation of top corporate executives, on average 431 times the salary of a blue-collar worker in his or her company, is widely seen as excessive. Critics often use the word "obscene" - a moral term - to characterize the tens of millions of dollars they get.

Capitalism in regard to pay is "out of whack," says Scott Klinger, codirector of Responsible Wealth, a Boston advocacy group concerned over deepening income inequality in the nation.

Mr. Klinger maintains that Adam Smith assumed equal power in a free market among its players. He didn't see the "enormous concentration" of economic and political power that has enabled the privileged to set the rules of the system. "Supply and demand is not the operative force," he says.

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