What is a just wage? And who decides?

The Catechism of the Catholic Church provides that a just wage is one that takes in account “the needs and contributions” of the people involved. Those who favor interference  with voluntary wage agreements cite the Catechism for the proposition that “agreement between the parties is not sufficient to justify morally the amount to be received in wages.” CCC 2434. Agreements made under force or fraud certainly are unjust, but further meddling by others is unlikely to yield a more just result.

It is difficult to see how an outsider to any wage agreement will have more competence to judge what is fair and just. This kind of meddling reminds me of the sort of courtroom judge whose conceit overpowers common sense and a proper humility.

An Unwise Judge

In a criminal case there are two parties: the state, represented by the prosecutor, and the defendant, represented by his own attorney. In most cases, they reach a settlement of the case without a trial. Each considers the evidence supporting their side and the likelihood of success and punishment. By the time they reach a plea agreement, each side has carefully weighed the issues, sometimes over a period of many months.

The deal is made and they appear before the judge. The agreement is announced. It typically involves a compromise regarding the charges, or the sentence, or both; and unless something seems dishonest or fraudulent, the judge accepts the plea and sentences the defendant according to the agreement. The judge will often accept a deal that is more harsh or more lenient than the sentence they would ordinarily give. It may not be a perfect solution, but the wise judge knows that the precious few minutes he spends with this case is dwarfed by the hours and months that the parties have invested to understand the issues and the evidence.

The foolish judge sweeps all of this aside and substitutes his own views and prejudices. His arrogance blinds him to the fact the parties to the case have far better reasons to believe that the agreement is fair. The foolish judge does not care, nor does he have to live with the result. He is pleased with his judgment, even if no one else is.

When it comes to the free market, the parties in a transaction, will do their best to reach agreement regarding a fair wage (or price). There is no assurance that their agreement is perfect, but–absent force or fraud–it seems likely that neither they, nor society, will benefit from interference by the government.