Justice at Work: Minimum Wage Laws and Social Equality

Source: Brishen Rogers, Temple University Legal Studies Research Paper No. 2014-08, March 17, 2014

From the abstract:
This article develops a new normative defense of minimum wage laws. Existing legal academic debate on such laws revolves around how well they deliver resources to the working poor compared to transfer programs such as wage subsidies, negative income taxes, and unconditional basic income programs. Transfers have advantages as mechanisms of redistribution: they target the working poor rather than all workers, and they do not increase involuntary unemployment. Because of such advantages, legal scholars have criticized minimum wage laws both on utilitarian grounds of welfare maximization and on egalitarian liberal grounds of fairness toward society’s worst-off.

Accepting for the sake of argument that minimum wage laws tend to increase unemployment, this article nevertheless defends them on grounds of justice. It argues that a just state will not simply redistribute resources, but will also enable citizens to relate to one another as equals. Minimum wage laws advance this ideal of “social equality” in several ways: they increase the proportion of resources captured by low-wage workers as a group; they incentivize higher value-added production strategies by discouraging the use of extremely low-wage labor; and they alter power relationships between employees and employers. Transfers are generally less effective on each front. Transfers and minimum wages are therefore complementary means of ensuring justice for low-wage workers.