Justice at Work: Minimum Wage Laws and Social Equality

Are minimum wage laws just? Existing legal academic debate implies that they are not. Drawing on neoclassical labor-market models, various legal scholars have argued that minimum wage laws increase unemployment and cause other inefficiencies, and therefore that legal scholars have argued that direct transfers to the working poor are a superior means of ensuring distributive justice. Accepting for the sake of argument that minimum wage laws have such economic effects, this Article nevertheless defends them on grounds of justice. It builds on well-worn arguments that a just state will not just redistribute resources but will also enable citizens to relate to one another as equals. This ideal of "social equality" is most commonly associated with republican and communitarian theories of justice, but it is also central to major strands of egalitarian liberalism. Minimum wage laws advance social equality, and do so better than direct transfers, in several ways. They increase workers' wages, which are a primary measure of the social value of work; they alter workplace power relationships by giving workers rights vis-a-vis employers; and they require employers and consumers to internalize costs of higher wages rather than mediating all distribution through the state. In short, minimum wage laws help ensure decent work, work that enhances rather than undermines workers' self-respect. Reduced demand for extremely low-wage labor is a cost worth bearing to ensure decent work-and may even be an affirmative social good.IntroductionIn 1935, as minimum wage provisions established by President Roosevelt's National Recovery Administration came into effect, a journalist asked a New England textile worker for his reaction. The response was telling:You can guess that the money is handy. . . . But there is something more than the money. There is knowing that the working man don't stand alone against the bosses and their smart lawyers and all their tricks. There is a government now that cares whether things is fair for us.1The sentiment remains remarkably common: low-wage workers often describe the minimum wage as a matter of respect and fairness, not just resources.2 President Obama has framed his push to raise the minimum wage in similar terms, calling income inequality "the defining challenge of our time" and a violation of "middle-class America's basic bargain that if you work hard, you have a chance to get ahead."3 The overwhelming political popularity of the minimum wage-which transcends income groups, political affiliation, and racial identity-may likewise reflect an intuitive sense that a just state will promote decent wages and decent work.4Legal academic and policy debates around the minimum wage are bloodless in comparison, focusing almost entirely on the minimum wage's efficacy at redistributing wealth. For example, law and economics scholar Daniel Shaviro has argued that the minimum wage is a perverse redistributive tool, for it not only reduces overall efficiency but also "destroys jobs in the low-wage sector of the economy and thus hurts many of the people it is intended to help."5 Shaviro therefore advocated repealing the minimum wage and instead assisting low-wage workers through negative income taxes or other transfers funded out of general revenues.It is of course unsurprising that legal economists would focus upon questions of efficiency rather than justice. What may be more surprising is that the minimum wage has also troubled legal scholars within another major branch of Anglo-American normative legal theory, the "egalitarian liberalism" of heirs to John Rawls.6 (While philosophical liberalism is of course far broader than Rawls et al., for ease of exposition this Article will use the term "liberals" to denote Rawls and his heirs and "liberalism" to denote their thought.7) Liberals insist that justice is a matter of fairness, especially for society's worst off.8 But some prominent liberals-including Rawls himself-have implied that tax-and-transfer policies are preferable to minimum wage laws as means of achieving distributive justice. …