I wish every state legislator received a training course in “Regulation Best Practices” that taught them how to balance the equities when contemplating their vote on a given piece of legislation. By that, I mean approaching regulation in the spirit of “If we demand too much, we will create mandatory compliance costs that will exceed the prevention of the harm we seek to avoid.” This must be weighed against regulating an industry too little, in which the potential harms to be avoided are great and the agency costs that would be required to avoid the bad outcome are minimal.
It is surprising to me that, throughout all of the debates about automation and minimum wage laws in the United States over the past few years, hardly any mention of Pope Leo XIII’s 1891 papal encyclical “Rerum Novarum” enters the dialogue.
Personally, I find Paragraph 45 to be one of the most compelling commentaries on the moral validity of a living wage that I have ever encountered.
In it, His Holiness offered:
“Let the working man and the employer make free agreements, and in particular let them agree freely as to the wages; nevertheless, there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that wages ought not to be insufficient to support a frugal and well-behaved wage-earner. If through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice.”