Well, It's Nice...But is Catholic Social Teaching Realistic?

"They should just be happy to have a job!" "Don't those union workers know that everyone else pays a portion of his benefits' package? Why shouldn't they?" "They should just accept their companies' need to decrease the payroll to remain competitive." "Workers who strike are stealing from their employers." "Healthcare is not a right."

I cannot count the number of times I've heard such notions expressed, especially since the southern California grocery clerks strike began in October. I've read them in the letters section of our local paper; I've seen them blogged on the internet; I've heard them in casual conversation. Except from Democrats and other "liberals," I've encountered little support for the striking and locked-out grocery workers, who are fighting not only to maintain their pay scale, but a healthcare benefits package which, hitherto, the companies have provided without employee contributions.

Certainly, the grocery clerks have not been making all that much money. With only one breadwinner in the family, it would be quite difficult to raise a family in southern California on $17.50 an hour; assuming full-time employment (and many grocery workers do not work full-time), that would come to only about $36 to $37,000 a year. Adding medical benefits to that salary, without any employee contributions, would seem merely to approximate a just wage. What is there, here, not to support?

To clarify the issues involved in the grocery workers strike, I called Thomas Storck to get his take on the just wage and the Catholic social justice tradition. Storck, who lives in Greenbelt, Maryland, has written extensively on the Church's social teachings in such publications as Caelum et Terra, New Oxford Review, and Catholic Faith. He has also written books on economic justice and related subjects, including Foundations of Catholic Political Order and The Catholic Milieu. I asked Storck if he thought a just wage should include medical benefits.

Storck said that, in defining a just wage in the encyclical Quadragesimo Anno, Pope Pius XI said a "wage paid to the workingman should be sufficient for the support of himself and his family" and should be enough so workers can save and not just get by. "The principle that healthcare is part of the ordinary expenses of living seems to me absolutely clear," said Storck.

"The question about healthcare is really a practical question," Storck continued. "If the company said to the workers, 'we'll give you whatever you need to go out and buy healthcare as individuals, that would probably be acceptable -- except that is almost impossible, or very expensive, to buy healthcare directly. So, getting in the group, you get it in a discount. So, it seems perfectly legitimate that [health benefits] be part of the compensation and for the workers and unions to consider it a very important part."

The problem is that we Americans tend to think a wage should be gauged only according to what the employer thinks is the economic worth of a remunerated activity and that to gauge it otherwise would result in economic ruination. Thus, it would make no sense to pay unskilled labor a wage as high as one the popes insist upon -- especially when one considers the cost of living in a place like Southern California. This notion, said Storck, descends from the economic thought of Adam Smith, which, he said, "radically distorts what actually goes on in an economy. In other words," said Storck, "in economics, you're presented with the notion that the economy works in a kind of self-regulating way; one thing goes up, another thing goes down."

But this isn't what really happens, said Storck. "The real thing behind the economy is power. A good example of this are CEO compensations, which bear no relationship to what CEOs contribute to the company -- and sometimes their compensation has gone up even while the company's profits have gone down. Why does their compensation go up? Because they have power to appoint their cronies to the compensation committee of the company's board of directors and their cronies reward them by giving them large salaries and bonuses and pensions and so on. To say this is an example of Adam Smith's law of supply and demand is absurd. It has nothing to do with that; it's power. That's why unions are a countervailing power; they're a power in the economy and they have been able (especially in the past) to get higher wages for their people. This is how the economy works. It doesn't work by some kind of automatic law of supply and demand or principle of input/output."

In contrast to the mechanistic notion of economics espoused by Smith and his followers -- and to the actual economics practiced in our day -- the Catholic notion of economic justice has asserted what has been called the universal destination of all created goods. Leo XIII formulated it this way, said Storck: "'the earth, though divided among private owners, ceases thereby not to minister to the needs of all.' In other words, the purpose of the earth, of the whole planet, was obviously intended for the sustenance of the human race, in a human fashion. It doesn't mean, of course, that we don't have to work to produce that; everybody has to work according to his conditions and needs and abilities, and so on. But, nonetheless, the economy exists to serve human life; it is a strictly subordinate part of human life. It exists to make possible our spiritual life, our family life, our intellectual life, our cultural life. As soon as our economy starts interfering with any of those higher goods, then it has gone awry. The capitalist economy doesn't really allow that; it never asks the question, 'what is the economy for?' It only asks, 'what do you, as an individual, want to do? And here's how you can do it.'"

Given the universal aspect of economic activity, the employer becomes the means by which employees participate in the goods of the world, intended for them by God. Under this aspect, a just wage not only makes sense; it is an ethical necessity. "Leo XIII is perfectly clear about the just wage," said Storck. "It's based on the human needs of the worker, not on how much they contribute to the enterprise."

Storck said, however, that it is hard to convince people of this notion. "One of the difficulties that presents itself is that you will get people who will say to you something like this: 'well, Catholic social teaching is nice. You have all kinds of nice, ethical principles, but that's not how the real world works. You can't pay those people more, because if you did, the enterprise would go bankrupt.' While that might be true in some cases, it's not universally true. The real world doesn't operate the way the tradition of Adam Smith says it does. There have been a number of alternative or unorthodox schools of economics, both in the United States and in Europe, that say, 'look, when you want to look at the economy, instead of making these nice graphs and deductions that the Adam Smith tradition would have you do, take a look at what really happens, and you'll find it is quite different from what they've said.' Unions, for example, were able to raise wages and the companies didn't go bankrupt. CEOs are able to raise their compensation and the companies don't go bankrupt."

Yet, in the case of grocery workers strike, the companies have claimed that they need to lower wages to compete with non-unionized mavericks such as Wal-Mart, which pay their workers a pittance. The resulting loss of market share to such companies, too, could threaten the grocery companies' standing with their stockholders. Storck admitted the possibility of such threats but said they do not utterly obviate the requirements of justice. "Let's say you are a concentration camp guard," said Storck. "If I said to you, 'you had better kill some more of those prisoners or you will get a bad rating from your boss,' what must you do? If you are living in the midst of a system like we are that is fundamentally anti-Christian, of course it's going to have all kind of rewards and incentives that [work against justice]. But the thing is, the system needs to be changed."

"The root of this," said Storck, "is something that Pius XI talks about in Quadragesimo Anno -- namely, that you might well have a situation where Wal-Mart comes in and undercuts another company, and that company feels it needs to cut wages and benefits in order to compete. But the problem here is that the economy is unorganized; it's basically a free-for-all, and this is what Quadragesimo Anno was designed to counteract. Namely, companies should not be allowed to do what Wal-Mart is doing. The problem is not that the one company's stores are paying too high of wages; the problem is that companies like Wal-Mart shouldn't be allowed to come in and undercut them."

In restricting certain economic activity, however, Storck is not calling necessarily for government intervention, though he does not exclude it. "State intervention is not the best way of handling this, which is what Pius XI said in Quadragesimo Anno. The so-called occupational groups, which Pius was recommending, are the organizations that ought to handle these questions, not the government directly. On the other hand, you can make the case that the government can directly do certain things, at least for a limited time, if there's no other way. If you read Casti Conubii, for example, which most people think is just an encyclical about marriage, there is a good deal in there about welfare and the state aiding poor people."

Occupational groups were a means proposed by Pius XI to overcome the struggle between labor and capital. Having legal recognition, the groups, formed in each trade or profession, include representatives of both management and employees. Only under the direction and by the determination of the groups do management and labor work out their differences; strikes and lockouts might be forbidden. State intervention is admitted only when the contending parties cannot come to an agreement.

The promotion of occupational groups implies a critique of labor unions. "The popes were always against the class struggle," said Storck, "and unions, while absolutely necessary and endorsed by the popes, are not the best solution. The ultimate solution has to be something like distributism, where you have well-distributed property and where you have a society characterized by the ownership of very small businesses. And in situations where you need large entities, because of the technology involved, they would preferably be owned by the workers." In calling for this solution -- what one might call a proprietary as opposed to a capitalist or a socialist order -- Storck hearkens back to Leo XIII. This pope, speaking of productive property, or capital, wrote in Rerum Novarum, "the law ought to favor [the right of private property] and, so far as it can, see that the largest possible number among the masses of the population prefer to own property." This solution was also embraced by Pope Pius XI and by such Catholic thinkers as Hilaire Belloc and G.K. Chesterton.

But is distributism a viable solution to our current economic problems? No, said Storck -- but only because people today either would not want to consider such a solution, or because they are "so confused and blind that they don't know where to go, or they don't think there is a problem." It's like proposing a solution for the "widespread problems of unchastity that we have," said Storck. "There's only one solution, but you know you are not going to solve the problem by simply saying people should be chaste and modest. Though this must be said, solving the problem of unchastity is going to take a sea change in peoples' views. It's the same with economics. If people wanted to, it would be fairly easy to go to a solution. In his Restoration of Property, Hilaire Belloc provides a blueprint of differential taxation [to bring about a condition of well-distributed property.] But people need to have their opinions change. Even Catholics don't think this way, and they ought to think this way."

Thomas Storck's books, Foundations of a Catholic Political Order, and Christendom and the West are available from Four Faces Press, www.fourfacespress.com. The Catholic Milieu is available either from Four Faces or from Christendom College.

My reaction - Storck is a socialist, even if he doesn't wish to call himself that.

With only one breadwinner in the family, it would be quite difficult to raise a family in southern California on $17.50 an hour; assuming full-time employment (and many grocery workers do not work full-time), that would come to only about $36 to $37,000 a year.

$17.50 for being a grocery clerk is insane. The job requires no talents and no knowledge, and most of the clerks don't bag your groceries either. Many stores are now moving to self-service checkout, which will be the end of most of these jobs anyway. Probably what the union is dreading.

As to cost of living in California, if you don't like your lifestyle choices - MOVE SOMEWHERE ELSE CHEAPER! Is there some "divine right" to live in expensive areas one cannot afford? California is so damn expensive because so many people want to move and live there. If you don't like, move to the country.

Adding medical benefits to that salary, without any employee contributions, would seem merely to approximate a just wage.

Medical insurance is going through the roof. My company has had to raise our contributions and copays twice this year because costs are increasing at a double digit rate. I really think I could get a better deal for myself if I could buy a plan tailored to my needs, like I can for auto insurance. For example, I don't need a big annual prescription benefit, since my family is healthy and my wife does not use birth control pills. I also could do without coverage on simple doctor visits for check-ups (rather like insurance for oil changes on a car, no???). My costs (and everyone else's) are high because I am subsidizing unhealthy people who eat too much, smoke, are sedentary, and refuse to become healthy. And then they insist on ingesting massive amounts of pharmaceuticals to mask the results, rather than treating the base causes. I resent that, since it is no different than stealing money right from my pocket to subsidize disgusting behavior.

So, getting in the group, you get it in a discount.

Why not employer paid auto insurance, housing insurance, travel insurance, etc.? Wouldn't employer organized vacations be cheaper too? How about employer organized cooperative mortgage origination? How about slavery - the employer can do everything for us?

That's not at all true. I think most Americans are (or were) sympathetic to the idea that familymen should earn more, and then men should earn more than woman. And in fact, those used to be common arrangements in offices before they were outlawed by the goverment. But let people do it freely. And if someone doesn't like where he works, let him go get a new job. The best employers will get the best workers, and the worst will go out of business. This all used to be taken care of by morality in America. Good employers felt an obligation to provide rightly for their employee family. The problem today is an absence of morality, not the capitalist marketplace.

This notion, said Storck, descends from the economic thought of Adam Smith, which, he said, "radically distorts what actually goes on in an economy.

I suppose he's never read Smith then or run a business.

they're a power in the economy and they have been able (especially in the past) to get higher wages for their people. This is how the economy works. It doesn't work by some kind of automatic law of supply and demand or principle of input/output.

Gosh, when I went for my latest job a few years ago, I solicited myself to several companies and let them compete for me. The outcome of the bidding of demand was a mutually satisfactory deal that let me move back to my hometown and receive the best pay and benefits pacakge too. The company I now work for actually offered me 10% more than the salary I had told them I would like. Seems like supply and demand to me. There are relatively few people with my skills and knowledge, which I spent much time and effort and money to develop in 20 determined years of my 29 year lifespan. Therefore, I can command a good salary. I don't need the government to give it to me.

I am mystified as to why I should be forced to help out people who fritter away their years of education and make themselves worthless to most employers. No one is forced to be dumb and lazy. If you want a good life, go out and take it! Don't expect me or others to hand it to you for nothing.

The capitalist economy doesn't really allow that; it never asks the question, 'what is the economy for?' It only asks, 'what do you, as an individual, want to do?

They just don't get it do they? The economy, and economic laws are not here to produce morality and goodness. They produce money and goods through labor and investment. The moral application of these things requires a pre-existing moral people. If the Church is complaining about the moral state of the people in relation to economic matters, it needs to look in the mirror. The Church is the minister to souls and ethics and morality. The economy just hums along and makes life possible. Its not the fault of economic laws that people are immoral.

Unions, for example, were able to raise wages and the companies didn't go bankrupt.

What ones? Steel companies? Textiles? Railroads? Mining? I notice the Automakers are really "prospering" under unionism. They are next.

Namely, companies should not be allowed to do what Wal-Mart is doing. The problem is not that the one company's stores are paying too high of wages; the problem is that companies like Wal-Mart shouldn't be allowed to come in and undercut them.

This is pure corporate socialism, i.e. the false notion that companies have some mystical "right" to their marketshare, no matter what happens. Wal-Mart started off as a little Mom-And-Pop place too. They just grew by looking for efficiencies that others did not, and opening stores where there were none. No one is "forced" to shop there, and they didn't cheat by breaking the law.

The so-called occupational groups, which Pius was recommending, are the organizations that ought to handle these questions, not the government directly.

And who organizes those? What if you don't want to be a member?

where you have a society characterized by the ownership of very small businesses

I'm all for small businesses that offer a real service, and I patronize those around me that do. However smallness for the sake of smallness if silly. Why must I be limited to a little hardware store that doesn't carry all the things I need, when something like a Home Depot can be created? Why should I have to waste my time making seperate visits to butcher, baker, grocer, dairy store, etc., when I can go to a supermarket? Doesn't my desire to spend my time as I wish have a moral value?

And in situations where you need large entities, because of the technology involved, they would preferably be owned by the workers.

This implies these concerns will be bearing a large debt burden, because they require enormous amounts of start-up capital which were provided by stock owned by the wealthy. If you forbid large-scale ownership, the workers will not be able to provide the capital necessary. This also ties the workers to the company, rather than letting them have the greater freedom of investing their savings as they wish. The Enron debacle should be a lesson in this, where people were wiped out from investing their retirements in something that turned out to be a fraud. Personally, I think the current 401K system is working just fine. My one caveat with it is allowing mutual fund managers to do the voting of shares, rather than fund owners.

Restoration of Property, Hilaire Belloc provides a blueprint of differential taxation

The good old graduated income tax or a wealth tax? One of the tne planks of Marxism.

Even Catholics don't think this way, and they ought to think this way.

Quite respectfully, the Church is outside of her competence in dictating economic organization of society beyond preaching the requirements of morality. Some of the foolish among us have this silly notion that the Church's primary mission is to teach people the way to heaven not to teach state's economics and reorganize society. This stuff is as silly as the Gregorian Papacy trying to run the world.

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