Economists have proven that a minimum wage above the market rate for unskilled entry-level workers will harm the people that socialists intend to help, but socialists don’t believe them or don’t care. Socialists insist that a minimum wage is moral and should become law regardless of the consequences. In this and this article I showed that a minimum wage is immoral from two perspectives. Here is another.
In the parable of the day laborers and the vineyard found in Matthew 20:1-16, the owner goes to the marketplace several times in a day to hire laborers to work. The point of the parable isn’t a minimum wage. Jesus told the parable to illustrate salvation by grace and not works. But to do so, he relied on common law regarding labor.
According to Alfred Edersheim in his book The Life and Times of Jesus Messiah, the market had established a range of wages and an employer was required to pay the average wage for a day laborer if he had not negotiated one with the workers. Some workers trusted employers to do the right thing. Others would negotiate a wage with prospective employers, and once they agreed, that wage was binding on both the employer and the laborers and was considered a fair rate. Metaphorically, we might view the workers who negotiated a wage as Jews who had a covenant with God, and those who had no agreement as gentile believers.
But a few employers would hire workers and not pay them, or withhold pay for long periods of time while the money that should have gone to the workers was invested and earning a return. When the Bible condemns employers for oppressing workers, it usually refers to that and not to how much employers paid.
In Jesus’ parable, the vineyard owner negotiated with only the first group he hired early in the morning: “He agreed to pay them a denarius for the day and sent them into his vineyard.” A denarius was the usual wage. The owner didn’t negotiate a wage with the other groups he hired. They trusted him to pay a fair wage.
When the sun had set, the owner began paying his workers, but he gave them all a denarius regardless of how many hours they had worked. Normally, owners would pay workers by the number of hours they had put in. None of the short-term workers had negotiated a wage and accepted their pay as fair. But the workers whom the owner had hired first complained that they had endured the hottest part of the day and received the same pay as the others.
To that, the owner responded, “I am not being unfair to you, friend. Didn’t you agree to work for a denarius? Take your pay and go. I want to give the one who was hired last the same as I gave you. Don’t I have the right to do what I want with my own money? Or are you envious because I am generous?”
Of course, the early workers were consumed with envy, but the economic point here is that Jesus relied upon a common law principle to support his illustration of salvation by grace. It’s unlikely that Jesus would have used that principle if he thought it unfair or in any way evil. And that law said that any wage agreed to by the laborers and the employer was a fair wage, regardless of what others thought.
Theologians at the University of Salamanca, Spain, during the Reformation relied on the same principle when people insisted that Spain institute a minimum wage. Not only would it cause unemployment and make poor workers poorer, they wrote, any wage agreed upon by two parties was a just wage if one didn’t coerce the other. Theologians had spent centuries trying to discover just prices, including wages, and had finally determined that the closest humans can come to knowing a just wage is in a free market.
Today, socialists argue that labor markets aren’t free. Employers have all the power and laborers must take the crumbs that businesses offer because there are always far more people applying for jobs than jobs available. But notice it was the same in Jesus’ day. The reason day laborers stood around in the marketplace, sometimes all day, was because there wasn’t a lot of work to go around. When large projects ended, such as building the temple, the supply of labor would greatly exceed the demand. Day laborers were among the poorest people in the land not counting beggars. And until recently, working on another man’s property instead of one’s own made the laborer not much better off socially than a slave. At the same time, an owner of even a small vineyard would have been relatively wealthy.
Socialists insist that they know how much an employer should pay for unskilled labor. But they don’t. They are merely arrogant in claiming to know something they can’t possibly know. The great economist F. A. Hayek wrote that the main purpose of the science of economics is to convince us of how little we know about the things we think we can control. Jesus would agree.
Socialists don’t know what any job should pay. Those who claim they do merely advertise their ignorance and arrogance. The principle of free market wages that Jesus employed applies to unions as well. Unions coerce employers with explicit threats of strikes and implicit ones of violence and so violate Jesus’ principle of freely negotiating wages.
According to the principle that Jesus used, every worker has a right to negotiate a wage rate with his employer and the wage they agree on is just and fair. No one has the authority to substitute their opinions in place of a laborer and employer’s right to negotiate wages, least of all arrogant socialists.
Roger D. McKinney lives in Broken Arrow, OK with his wife, Jeanie. He has three children and six grandchildren. He earned an M.A. in economics from the University of Oklahoma and B.A.s from the University of Tulsa and Baptist Bible College. He has written two books, Financial Bull Riding and God is a Capitalist: Markets from Moses to Marx, and articles for the Affluent Christian Investor, the Foundation for Economic Education, The Mises Institute, the American Institute for Economic Research and Townhall Finance. Previous articles can be found at facebook.com/thechristiancapitalist. He is a conservative Baptist and promoter of the Austrian school of economics.