We left off last week with Pope Pius XI reiterating Leo XIII’s teaching on private property, namely, that it is a natural right but not an absolute right. Men ought to be able to own property in providing for themselves, but this right does not justify hoarding or wastefulness and the obligation to be support those in need must always be considered. Today, we pick up with a teaching on labor and capital. “Capital,” in this context generally refers to property. Labor and capital are related because, in most cases, one person owns the property but pays another person to work on it, with it, or to maintain it.
The problem the pope is addressing is that, all too often, the property owner claimed too large a share of whatever was produced. Many argue that, because a person owns the machines, the land, or the business at which a person works, they also own everything that is produced. Yet, the simple fact is that, without labor, the property itself would have no value. So, laborers are entitled to a fair proportion of what is earned. Because some workers were being deprived of their fair share, people were proposing the opposite extreme whereby the owner gets the bare minimum to maintain their property while the workers take everything else. There is also the idea of socialism whereby the state owns everything and simply distributes to each what they need. Both of these ideas found some support among those advocating for outright revolution. The correct response, of course, is that owner and worker have a balanced distribution of profits.
That balance, according to Pope Pius XI, should be “equitable” for owners and allow for “ample sufficiency among the workers.” In our context, it is clear that “ample sufficiency” is often the part that is lacking. Also called a “living wage” in other places, this “ample sufficiency” means a worker makes enough to provide for themselves and their family the basics of a decent life: food, clothing, shelter, and leisure. It should also be enough for workers to “increase their property by thrift.” In other words, it should be able to provide for basic needs and still have enough left over to save for investments, retirement, and other needs.
Some see injustice in the way workers are hired and paid and so argue that all such arrangements are immoral. They claim no one should be able to “hire” another person, but that all contracts should be based on partnership. It is not wrong, in principle, to have a hirer-hired relationship so long as the arrangement is just and neither side uses desperation or bully tactics to force the other into an unfair situation. At the same time, the pope does say that elements of “partnership” can be included in simple wage or salary agreements and that these are often beneficial because it creates a stronger sense of cooperation and helps to distribute profits more fairly.
Turning back to the idea of a “just wage” or “living wage,” Pope Pius XI lays out 3 criteria: that it is enough to support a family (including savings as mentioned above), that it accounts for the needs of the business to remain sustainable, and that it factors in the “public economic good.” People must be paid enough to live on, businesses must have enough money to stay open, and there must be enough opportunities for people to work. So, it is possible to pay someone too little. It is possible to pay someone too much and hurt the business. It is also possible for too much or too little pay to lead to widespread unemployment. Also affected by all of these are the prices of products. Good being too cheap leads to unfair pay. Wages being too high leads to the poor being unable to provide for themselves and too much unemployment can create scarcity. All of these factors have to be considered in determining a just wage, which is why the Church generally doesn’t give exact numbers, just guiding principles. Throughout all of this is the simple truth: money is not the goal, but a means to an end. The goal is the good of human beings and society in general.