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CEOs & Fair Wage to Workers: A Christian Perspective, Part II

In my previous post I wrote about how we can determine the value of CEOs to their respective organizations. My solution was modest: we simply aren’t in a position to know how much investors or shareholders should value a CEO to their company and should leave that decision up to them. The actions of CEOs like Dan Price or Haruka Nishimatsu, who cut their own salaries as an act of sacrifice for the sake of their employees might be categorized as supererogatory actions. But what about scenarios in which CEOs take home millions while other employees live paycheck to paycheck? More specifically, how should Christian CEOs value their workers?

I’ll give you the answer up front: Once again, we simply aren’t in a position to know exactly how any given (Christian) CEO should value his or her employees.  The free-market, at its core, is simply the way any economic transfer of goods or services occur. In the free-market, people value things quite relatively.

We applaud Price for his pay cut in order for the minimum annual salary to be $70,000. But would we have applauded him had he made the salary to only be $60k or $50k? In some parts of the country where the cost of living is low and individuals live frugal lifestyles, $40k is a good living wage.

Price is the founder and CEO of his company (a small company when you compare it to other big businesses). But what if he were the CEO of a larger corporation where he would have great responsibility and more stress? Or what if he weren’t the founder and instead had to answer to his superiors (such as investors or shareholders)? Price’s willingness of economic sacrifice may be different in other circumstances. It’s also entirely possible (if not probable) that investors or shareholders wouldn’t want the CEO to take a pay cut because of the disincentives that might be associated with it. These sorts of issues are tricky when analyzing a free-market. There is no one-size-fits-all formula.

Some Christians might think otherwise. In a Christianity Today web-exclusive, Tim Weinhold attacks a certain view of capitalism as being unchristian. He writes, “Price’s move violates an understanding of capitalism that would require [a] company to pay no more than the lowest price at which the market would allow them to hire appropriate workers. […] Scripture, though, has a very different perspective.”

To support his view Weinhold cites three biblical passages (Malachi 3:5, James 5:4, and 1 Corinthians 9:9-10), none of which actually support his view. All of the verses cited merely instruct individuals to actually pay their workers, not just pay them some 21st century notion of a fair wage. His citation of James 5:4 explicitly states this: “The wages you failed to pay the workers.” Thus, the biblical idea of wage-exploitation is based upon the lack of any payment for work, not some relative payment of a fair wage. If any discussion is to be had regarding the relativity of a fair wage, it is to be found in the principle of Luke 12:48, “From everyone who has been given much, much will be demanded; and from the one who has been entrusted with much, much more will be asked.” This principle is also seen in the parable of the talents in Matthew 25:14-30. The adage ‘to whom much is given but is expected’ is one that supports the free-market concept of relatively valuing workers.

To conclude, let us suppose Price took a pay cut but used the funds differently. Suppose he, instead of paying his workers more, hired extra staff (thus helping to employ more people) or that he paid a marketing company (which used the funds to pay people) to promote his company in hopes of building its revenue. In these two possibilities Price does not increase the pay of his workers but is still performing a social good. In these two options, Price would have followed the form of capitalism Wienhold thinks Scripture rejects, yet still would have performed a social good (employing people or paying other companies that would employ people). Therefore, I see no reason to think that Price’s action is superior to some other possible actions that would occur as a result of his spending money.

In fact, a decent case could be made that he should have spent the money differently. Should his company pay one worker at $70k (while another person is unemployed) or two workers at $35k (or some other combination adding up to $70k) such that the unemployment rate declines? The latter might actually be more advantageous from a social good perspective.