“To defraud anyone of wages that are his due is a great crime which cries to the avenging anger of Heaven.”
This statement from Pope Leo XII's 1891 encyclical “Rerum Novarum” is jarring, especially in an economy that appears to have as much to do with Church teaching as spiders do with spelling bees.
But the Church's view on wages and compensation has a long history reaching back centuries — and remains relevant today to employers and employees alike — say businesspeople and theologians seeking to find a moral response to today's changing economic landscape.
“The Church starts really from the perspective of the human person, and wants to see why the relationship between the employer and the employee is more than just an exchange of money for a certain part of time,” said Fr. Dominic Legge, OP, who teaches systematic theology at the Pontifical Faculty of the Immaculate Conception.
“It’s a personal relationship, and that means that there are rights and duties on both sides of that.”
The Church's stance on wages as bound to the concept of justice reaches back centuries. Teachings against defrauding workers of wages can be found in Catholic Catechisms for families as far back as the 1600s, and the principles of justice within Catholic teaching reach back even further, to the Bible itself. The development of Catholic thought on how wages and compensation for work should be considered is rooted not in laws of supply and demand, but in the human person and natural law.
“It’s not just reducible to the market. Just because the market would allow you to pay someone less does not mean that you have a right in justice to do that. Nor does it mean that it is just, for a laborer, to charge an extravagant amount of money for his work,” Fr. Legge told CNA.
He explained that the teaching surrounding the just payment of workers received substantial attention as part of St. Thomas Aquinas’s work elaborating upon the nature of justice. What's striking, he said, is that St. Thomas Aquinas uses just wages as the first “and most obvious” example of what justice actually is.
However, the the concept of just compensation is clearly not the most obvious example of justice to contemporary thinkers, “which is a way of telling us that the way we think about wages now is very different from the way that someone like Aquinas in the Middle Ages thought about it,” Fr. Legge said.
Instead of viewing it as a situation where the employee, the business and the state were the only parties involved in making a person’s livelihood, the Church’s thought on just wages also incorporated all of the relationships and institutions an employer and employee interacted with.
“There’s a much richer texture to human life, and the Church has always respected the place of family, private organizations, the family, local organizations, the Church.”
Fr. Legge said that until the 19th century, “you often had people who were tied to their employment, their employer through lots of bonds — family, community, history.”
In many circumstances, employees were incorporated into their employer’s family structure and physical needs were taken care of both by their employer as well as by community supports, such as the parish. “We wouldn’t imagine that the person providing daycare would be lodged in the family home, and would remain there even after the children are grown,” he said.
How the nature of work changed
This interplay of different supports for workers, however, is largely absent from contemporary approaches to work.
“Once you get to the Industrial Revolution, work changes radically for the worker,” said Fr. Thomas Petri, OP, Dean of the Pontifical Faculty of the Immaculate conception.
Shifts in labor and mass-production made it more difficult for some to see the dignity of work and the importance of the worker as a person.
“There’s a problem in markets when workers are depersonalized,” he told CNA. “It takes away in some way the dignity of the worker and makes work into some sort of a monotonous, humdrum thing.”
In part as a response to the changes facing the world during the Industrial Revolution, Pope Leo XIII wrote “Rerum Novarum,” outlining the Church’s teaching on the proper relationships between people, the state, labor and capital. Along with discussing the role of private property, unions, and a worker’s duties to their employer, Pope Leo XIII emphasized the importance of an employer’s duties to their employees.
The document, Fr. Petri said, aims “to remind people that work still has dignity,” as well as to serve as a reminder to all that business should serve the common good.
It also states that while “the state has to be involved in the adjudication of just wages,” Fr. Petri said, “there has to be communal support for the person.” The Pope emphasizes that institutions like the family, the Church, other institutions along with the state can help provide a living for workers.
“Minimum wage isn’t the only thing that can help support families,” Fr. Petri said.
While the state has a role in making sure all its citizens receive what they need for a good and virtuous life, “it seems to me that the Church’s social justice teaching suggests that this should also work in business,” he said.
Fr. Petri pointed to examples of company towns that provided housing, the provision of healthcare or education benefits, or employee-ownership of companies as examples of ways a business could expand its provision for its employees.
However, while the Church’s teaching, both in “Rerum Novarum” and other documents do not provide strict prescriptions for all the ways employers can provide for their employees, not all contracts or payment is morally acceptable.
“Just because an employee agrees to work for a certain wage does not therefore make the wage inherently just,” Fr. Petri said.
“Sometimes people work for a pittance because they’re socially forced to or they have no other opportunities for a greater income. Leo XIII speaks about that as an evil.”
He pointed to many companies' practice of hiring of undocumented workers for very low wages as an example of this kind of mistreatment. To compound the issue, Fr. Petri said, illegal immigrants can't speak up about their mistreatment without fearing for deportation or other consequences.
In cases were businesses are acting immorally, “I think the government has a right to exert legislative authority in those cases where it’s clear that they are mistreating their workers,” Fr. Petri said.
“That’s what unions were supposed to do, that's why unions were started.”
He added that citizens can both approach legislators to take action as well as avoid patronizing companies that do not provide just compensation for their workers.
What should things look like now?
And business leaders themselves can and should put these principles into practice today, said Bill Bowman, Dean of the School of Business and Economics at the Catholic University of America.
“The purpose of business is the human person. It's not to trade the human person like any other commodity,” he told CNA.
Bowman said that the Church shies away from a “one-size-fits-all” approach, instead setting principles around which an employer can balance people’s needs — such as a city's expensiveness or an employee’s family size, with the needs of the company is able to sustain itself. The result is that all businesspeople should be able to provide their workers with a just wage if they look towards innovative solutions.
He suggested that every businessperson should look carefully at what “a just wage really look like for this particular city where we're working. What would it look like for this employee, with a big family or a person with no family at all. If what we really want to do is provide enough money so that you can live a life and maybe put a little away on the side.”
“To just say 'well I can't afford it,' is, to me, to unnecessarily give yourself a 'get out of jail free' card.”
For entrepreneurs or startups facing tight budgets, Bowman noted that employers could work with employees to step up base pay with a company's growth or other “innovative” solutions he has seen from employers such as incorporating family size into bonuses or covering certain expenses like college tuition.
He directed business leaders to look to the Church's “rich doctrine” and writings on wages and business, such as in the Compendium of the Social Doctrine of the Church, papal encyclicals, and a short document called “The Vocation of the Business Leader,” put out by the Church's Pontifical Council on Justice and Peace, among other sources of Church teaching on the topic.
“As a Catholic business man or woman, he or she should really be challenging themselves to orient their businesses in this way,” he said.
Bowman also criticized companies who avoid considering how they can better provide just wages to their employees. He said that companies, particularly large ones with shareholders, should not frame paying their employees a just wage as a “competitive disadvantage.”
“If a company clearly can afford to pay it, its idea of a 'competitive disadvantage' is largely nonsense,” he said.
“What it generally translates to is 'my share price might go down a bit and that's going to hit me in the wallet. Well, the Church has completely rejected the idea that a business is about shareholder returns.”
In addition to it being the right thing to do, providing just compensation to workers is a sound business strategy, Bowman said. He's found in practice that providing employees with the compensation they need to take care of their families properly decreases both an employee’s likeliness to leave and their sloppiness on the job, which are “enormous” costs to business.
“The return on investment of these programs is enormous,” he said, adding that within a year in some cases, the programs “paid for itself.”
Above all, employers should keep in mind the role the Church has laid out for laypeople in prescribing its moral directions on wages and work, Bowman said: to figure out how to implement Church teaching in daily life. By taking to heart this approach, businesses and their employees can focus back on virtues and the goal of business in the first place.
“We understand that the purpose of business and the purpose of everything else in life is really the human person.”