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The case against a living wage

“Don’t Angelica workers deserve a living wage?”

“No. They don’t. They are not even employees of Duke, and even if they were, a living wage would be a terrible idea. Thanks.”

President Richard Brodhead should have offered that response to the students who stood on stage holding the tacky banner as he spoke to undergraduates two weeks ago. While the president didn’t, he has apparently been steadfast in opposing the University-wide “living wage” the activists are demanding. Let’s hope that doesn’t change so Duke does not duplicate Georgetown, which last month promised employees $14 per hour in response to a ridiculous “hunger strike” that sent two students to the hospital.

The students who disrupted Brodhead’s speech seem to have a similar number in mind for Duke. After all, Durham County already has a $9.74 living wage for county employees, and Duke currently has a de facto $10 minimum wage for its own workers. These numbers do not apply to the infamous Angelica Corp. laundry service, since Duke only contracts their services, so groups like “Duke Students Against Sweatshops” are demanding that Duke not only institute a higher minimum wage and set it to automatically increase with inflation, but also end agreements with contracted companies who don’t pay their employees this same amount. Perhaps they are preparing for a hunger strike.

This issue is largely framed as an urgent moral imperative with a few abstract economic benefits. Yet as noble as a living wage may sound, its implementation would cause major financial trouble, and not just for employers. Living wages are especially problematic to workers, and the most harmed ones are usually the lowest-paid and least-qualified.

If a university suddenly requires a business to pay its employees more money, the employees of the business will become victims. Take Angelica. Were Duke’s administrators to suddenly demand that it start paying employees $13 an hour, Angelica’s management would obviously not just give everyone a $5 raise and carry on as usual. Unless Duke gave them extra money, Angelica would exercise one of two options: end their contract with Duke, or make cuts to compensate.

This first option would be bad for everyone, as it would leave Duke without a cleaning service, take revenue from Angelica and make many of their workers’ jobs unnecessary. The second, cuts, would lead to job loss and a worsening of working conditions. When a company is told to pay their lowest-paid employees more, they are naturally inclined to fire the least-needed workers and use the savings to pay others. This seems an especially likely scenario were the company truly a corrupt, greedy business that didn’t care about its workers’ well-being, as Students Against Sweatshops claim Angelica is.

The complications would not cease were Duke to just give the workers more money. Such an exchange would not really be a wage at all, just one group giving money to another out of social concern. Problematically, this would artificially inflate the value of labor and thus lead to turnover and job loss. Imagine what the employment level in America would be were the beliefs of these demanders universalized, and every business was required to pay employees $14 an hour regardless of age, experience or demand for the job.

The biggest problem with a living wage is that it prevents less qualified or uneducated workers from competing for jobs. Sometimes the only unique benefit an applicant can offer a business is a willingness to work for a lower wage than others will. In that sense, artificial living wages strip those in an already disadvantaged group of their only bargaining chip and make their pool of potential jobs even smaller, especially if employers discriminate in hiring.

Why do these workers accept these supposedly unlivable wages in the first place? Just as a professor is a professor because he or she prefers teaching to other alternatives, someone who works at Duke does so because he or she chooses to. If an employee is being abused or mistreated at the workplace, then the problem obviously needs addressing. But mandates that cause people to lose jobs to pay for others’ “living wages”? No one deserves that.

Nathan Carleton is a Trinity senior. His column appears Thursdays.

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