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The Minimum Wage and the Cause of Democracy

The Minimum Wage and the Cause of Democracy.

by Oren Levin-Waldman

Abstract Too often the minimum wage is conceived of as a small policy measure that will be of benefit to only a small segment of the labor market while imposing costs on another segment of the labor market. Unexplored, however, are the larger philosophic questions that such a small measure may actually raise. One such issue is the relationship between the minimum wage and democratic principles. In this paper I argue that the minimum wage furthers the ends of democratic society in that low-wage workers may achieve greater equality of standing with their piers to the extent that income inequality is at all lessened: their autonomy as individuals is enhanced through higher wages, which in turn enables them to claim the benefits of citizenship and participate more effectively in the democratic process; and it fosters greater economic development in that it raises the overall structure of a region and perhaps the productivity of that region.

Keywords: minimum wage, democracy, equality, autonomy, empowerment, voice, citizenship, economic development

Arguments in favor of raising the minimum wage often center on the need to assist the working poor. A higher wage, it is maintained, will enable more people to live above the poverty level, and might potentially have supply side effects in that it attracts to the labor market those who may previously have shunned it on the grounds that minimum wage jobs, in and of themselves, simply did not make work pay (Bane and Ellwood 1994). Politically, however, neither of these arguments have great appeal. Opponents of minimum wage increases have successfully defined the issue as a narrow economic concern that results in less employment. Aside from the fact that a very small segment of the labor market actually earns the statutory minimum wage, most minimum wage earners, they argue, are neither the primary earners in their households nor are they poor. Rather most minimum wage workers are teenagers and indeed much of the empirical research on the minimum wage has focused on the teen labor market. In recent years, however, new evidence has not only challenged this orthodoxy (Card and Krueger 1995, 1998; Levin-Waldman 2000a, 2000b), but also suggests that the minimum wage could also serve as a useful tool for reducing disparities in income (Fortin and Lemeux 1997: Lee 1997; Machin 1997: Galbraith 1998: Levin-Waldman 2002).

Poverty arguments for the minimum wage, however, are relatively new. Historically, the minimum wage was viewed as a matter of efficiency to the extent that a higher wage would result in greater productivity because better paid workers would be better able to sustain themselves (Webb 1912). Even earlier arguments for a living wage, from which the minimum wage was born, conceived of higher wages as a basis for giving workers greater dignity and enabling them to be autonomous citizens. Higher wages, or at least liveable wages, were seen as a necessary condition for achieving full fledged citizenship (Glickman 1997). Over the history of the minimum wage program, then, it would appear that arguments for the minimum wage have actually narrowed from the more normative to the more technical. No longer do we ask what role policy has is creating a good society or enabling its citizens to achieve the good life, let alone whether it in any way furthers our democratic ideals. Rather, in the tradition of value-free social science, supposedly in the name of greater professionalism as well as greater neutrality, we only ask the narrow question of whether the policy achieves its clearly stated goals in such a way that the benefits outweigh the costs. Lost, however, is whether policy in any way furthers our communal objectives, whether it is in sync with our underpinning philosophic foundations (Levin-Waldman 1996).

The minimum wage may well be a small policy measure, but at the same time it also raises some larger philosophic questions. The minimum wage is not just a matter of increasing the purchasing power of those at the bottom: it is also about what constitutes a fair and just society (Levin-Waldman 2000d), and perhaps ultimately what it means to talk about a democratic one. My focus in this paper is on the relationship between the minimum wage and democratic principles. I argue that the minimum wage furthers the ends of democratic society in that low-wage workers may achieve greater equality of standing with their piers to the extent that income inequality is at all lessened; their autonomy as individuals is enhanced through higher wages, which in turn enables them to claim the benefits of citizenship and participate more effectively in the democratic process; and it fosters greater economic development in that it raises the overall wage structure of a region and perhaps the productivity of that region. The issue isn't just a question of maintaining a broad middle class, but that the ability of individuals to function autonomously economically, as well as politically, is essential to the achievement of a full employment economy, which many economists take to be the central goal of economic policy (Tarling and Wilkinson 1997:97-98).

At the same time, the issue isn't just confined to the achievement of these goals, rather the language of democracy, equality, and citizenship may be more politically appealing as arguments for the minimum wage than simply assisting the poor. To the extent that pubic policy is about fulfilling the collective aspirations of the political community, whatever those aspirations may be (Stone 1988), policymakers would do well to consider the principles and values underpinning that political community, and then begin to search for ways that specific policy measures serve to achieve them. To make this case, I organize the paper as follows: In the first section, I present the elements of democracy, as they are centered around equality and personal autonomy and may even require a measure of economic development. Then in the second section, I explore the relationship between democracy based on these elements and the minimum wage. I conclude the paper by showing how each of these elements are furthered by policies such as the minimum wage, and how democracy as a whole is furthered and in turn provides an important framework through which to approach the issue of the minimum wage.

ELEMENTS OF DEMOCRACY

Democracy is by no means a static concept, rather it has evolved through several different permutations. In its simplest terms, democracy is a political system in which the policy-making process is ultimately controlled by the people, because the government that makes policy is selected by the people. Policies are made on a majority basis by representatives who are subject to popular control through periodic elections, and these elections are also to be conducted according to the principle of political equality and under conditions of political freedom (Mayo 1960). Dahl (1985) suggests that the basic criteria for a democratic process include: equal votes; effective participation; enlightened understanding; public control over the agenda and inclusiveness (p. 59). Or as Seymour Martin Lipset (1959) suggests, a democracy can be defined as a political system that affords its citizens regular constitutional opportunities for changing governing officials. But it is also a social mechanism for the resolution of conflicts among conflicting interest groups that also permits the largest possible part of the population to influence public decisions through their ability to make electoral choices.

Democratic theory assumes a society of free, equal, and autonomous individuals. These individuals enjoy the same rights of citizenship as others and must enjoy their autonomy so that they can participate as full fledged citizens in the democratic process. The greater their autonomy, the more likely they are to participate in the democratic process. Core to democratic theory is a conception of equality, but there is question over just what it means to be equal.

According to Anne Phillips (2000), work on equality has assumed two different loci. The first focus has been on those principles that ought to regulate the distribution of goods between individuals. It specifically challenges the efficacy of market allocations and assumes inequality to be a function of unfair distribution between individuals. The second focus has been on inequities arising from the unequal allocation of natural endowments. Whereas egalitarians used to question the unfair consequences of family background on people's future development through future life, contemporary work has come to question those injustices associated with natural talents, i.e., one's talents and abilities that are now viewed no differently than luck.

Equality in the U.S. is generally conceived of in procedural terms, which are also the defining characteristics of American democracy. Individuals born with equal rights are all equal before the law. Each individual enjoys the same right to cast an equal vote for those in government who will represent them. Each individual has a right to speak freely and openly against the actions of the government. And in a democratic society, each individual has an equal right to pursue his or her interests. Equality, then, is not conceived of in terms of how resources, wealth and income are distributed--that everybody have the same amount but in terms of standing that each and every individual enjoys the same standing. No individual, in other words, enjoys greater access or privilege, or treatment on the part of the state than do others.

Ronald Dworkin (1985) refers to this as "the liberal conception of equality," which holds that every individual is entitled to "equal respect and treatment." By this conception, the state may not choose between competing conceptions of the "good" that is, it may not favor one's preferences over another, for to do so is to effectively not afford one equal respect and treatment. Government, if it truly respects equality must maintain a stance of neutrality, at least when it comes to comprehensive conceptions of what constitutes the good life, i.e., how individuals should live their lives in accordance with their own preferences (Rawls 1993). And yet, to the extent that government's role is to mediate conflict, it does effectively have to make choices between competing conceptions of good or preferences, which may manifest themselves in the form of policy choices. One means by which government gets around stalemate inherent to the liberal conception of equality's neutrality is through democratic procedure. A framework that allows each and every individual the equal opportunity to present his/her claims, i.e., preferences for consideration is one that effectively affords each and all equal treatment (Ackerman 1980). But in the end, this is merely procedural democracy because each individual is in theory, at least, treated the same. But that the focus is on fair procedure, the focus of equality is on equality of opportunity.

Procedural equality is critical to democratic society because it serves to secure another essential condition: personal freedom, which is also a necessary condition for individuals to function autonomously. The notion that the state cannot choose conceptions of the good life stems from the basic premise that as rational actors individuals have the capacity to conceive of their own conceptions of the good life and hence choose their own life plans for achieving them. A state that treats individuals with equal respect and does not attempt to force a conception of the good life on them is one that essentially allows them to pursue their own visions of what it means to live a good life. That the state stands back and refrains from imposing its own good, means that the individual is free to pursue his or her own in consonance with his/her own agency. Therefore, in order for there to be freedom, certain political conditions must be met, and equality, particularly equality of opportunity or procedural equality, is one of them. Individuals are free to pursue their goals and objectives--i.e. self-interests--so long as their pursuit does not interfere with others" ability to pursue their own goals and objectives. In a very basic sense, and certainly within the context of classical political thought, this is what it means to talk about personal independence or autonomy.

Still, the freedom to conceive of one's own conception of the good and to subsequently act upon it is also important to democracy for yet another reason. A democracy, especially as its legitimacy and power are derived from popular consent, assumes that individuals have the capacity to reason for themselves, i.e., to deliberate in the public square, and to act on that capacity in a responsible manner. They cannot effectively participate, whether it be in full policy discussions or selecting their own representatives, if they cannot deliberate in a rational manner. This means that human agency has to be protected. That is, they must be afforded the space to do so, which is precisely what personal freedom allows them to do.

At the same time, the American focus on procedural equality has not been completely blind to some minimal level of economic equality. Among the observations made by the most well-known nineteenth century observers of American democracy, Alexis de Tocqueville, was that a major ingredient in the maintenance of the social harmony that sustained American democracy was relative economic equality. For Tocqueville, this meant that individuals confronted one another as equals, whereby each was independent and each was of similar importance (Zetterbaum 1987). But as Terry Karl (2000) suggests, equality of condition meant more than mere political equality. Equality of condition also involved social equality and largely assumed a roughly equal distribution of wealth and income. For Tocqueville, social equality was to be considered a basic building block for political democracy. What he observed in the U.S. was for the most part an agrarian society in which individuals were relatively equal in terms of distribution. It was an advantage that the U.S. began its experiment in democracy with an exceptionally egalitarian social and economic structure based on small landowners. As a result, material equality in America produced an egalitarian sentiment, which also in turn formed the basis for the principle of equal citizenship. And in the absence of an aristocracy and other social privilege characteristic of the "old order" in Europe, individuals were equals in terms of social position and status.

On the contrary, any change towards an overly skewed social and economic inequality would, as far as he was concerned, endanger democratic politics. Where inequality is greatest, people are more willing to accept authoritarian rule and less likely to be satisfied with the way democracy works. Consequently, increasing inequality in income and wealth is only bound to spell political trouble, with huge repercussions for democratic regimes (Karl 2000). Were this vision of social equality based on simple agrarianism applied to contemporary industrial society, would it not in essence be a call for the maintenance of a broad middle class? At the same time, Tocqueville was not arguing that individuals necessarily had to possess equal amounts of the same thing. As Elizabeth Anderson (1999) suggests, equality is about individuals' relations to others. The aim, then, is not to ensure that people necessarily get what they morally deserve, but to ensure that they are in relations of equality to one another. The point of equality is to in essence ensure that individuals cannot be exploited and oppressed by others. In theory, then, equality prevents one with greater resources from receiving better treatment than the one with less. Both are equal in terms of their respective moral worth. And ultimately this allows for greater personal freedom and autonomy.

Nevertheless, to the extent that democracy requires the maintenance of a broad middle class, the maintenance of democracy requires economic development. Lipset (1959) suggests that one of the most widespread generalizations linking political systems to other aspects of society has been that democracy is related to the state of economic development. The importance of economic development to democracy is an idea that appears frequently in the literature on emerging democracies, particularly in Eastern Europe that were for so long part of the eastern Communist block (Mostov 1992, Maharaj and Ramballi 1998). But the concept of economic development was also associated with the minimum wage during the 1930s, particularly in the American South where the overall wage structure was lower than in the more industrialized and developed North, and political life was effectively dominated by one party politics (Schulman 1991; Nordlund 1997). Economic development is important because it results in the generation of a broader middle class in which there is relative equality of condition among its members. Moreover, it establishes the foundation for individuals to function economically in a way that leads to their independence. Even some of the contemporary writings on living wage campaigns view it as an essential ingredient in democracy (Pollin and Luce 1998). The more well-to-do the nation is, the greater are the chances that it will sustain democracy. Rather a successful democracy requires a minimum level of aggregate wealth, a certain degree of industrialization, urbanization and a certain level of education that will result in relatively few of its citizens living in poverty (Lipset 1959). But it also requires the maintenance of a middle class in order that the gap between the top and the bottom not be so wide that it leads to potential social unrest. In other words, there cannot be wide disparities in wealth and income.

Arthur MacEwan (1999) suggests that while economic development does involve growth, it also involves an improvement in the basic living standards of the great majority of people. One means by which these improvements can be achieved is through a relatively equal distribution of income, or policies that effectively achieve that objective. Another means by which these standards can be improved is through the broad participation in decision-making about the political, social, and economic affairs of the community. This, of course, would imply policies that effectively result in workers, particularly those who have never had, obtaining a measure of voice (p. 1).

For many contemporary democratic theorists, however, there cannot be real political equality unless there is a measure of economic equality. Unequal distribution of wealth and income may adversely affect individuals" ability to participate in the democratic process on the same footing as equals. Unequal distribution in wealth and income may result in procedural inequality to the extent that those lacking in wealth and income may not enjoy the same access to political and policy officials as those who possess wealth and income may enjoy. With greater concentration of wealth at the top, those at the top are in a better position to use their wealth toward the attainment of their political and other ideological objectives (Bachrach and Botwinick 1992:4-5). Unequal distribution in wealth and income, then, results in unequal access. To the extent that this is true, the democratic state cannot possibly be treating its citizens as though they were on an equal footing. Consequently, inequality affects our ability to be free, as unequal distribution will effectively result in some being able to make choices that others cannot. Those with more resources may be better positioned to pursue their goals and objectives, while those with fewer resources may find that their ability to pursue their goals and objectives is limited as a result. It is for this reason that economic development is so crucial to a democracy: because it results in a broader middle class within which economic resources are more broadly distributed.

The solution for many contemporary democratic theorists is to have what is often referred to as "perfect" democracy or what Kenneth Dolbeare (1986) has referred to as full democracy, which assumes individuals to have full control over all those circumstances affecting their daily lives. The U.S. is not a full democracy because the interests of property, often expressed in terms of individual rights, effectively limit democratic rule. Democratic rule typically does not extend into economic institutions because they are considered to be private property and thus outside the bounds of majority rule in a capitalist system (Bowles and Gintis 1987). In a more complete democracy, by contrast, the equal voice that citizens enjoy in the political realm would be enjoyed in the economic, whereby workers would be able to participate in the operations of the firms for which they work (Dahl 1985). But aside from the equal voice that citizens enjoy, they might also be more equal in terms of the distribution of income. They would be equal because they could use the political mechanism to legislate a more equitable distribution of income.

To achieve this type of full democracy would obviously require some radical steps. Many have attempted to get around this problem of property imposed limits to democracy by proposing workplace democracy. The idea behind workplace democracy is that individuals have a voice in the operations of the firms they work for because the decisions their employers make will ultimately affect their ability to live autonomous lives. The thought here is that democratization of the workplace will ultimately lead to participatory democracy. The workplace is not necessarily the focal point, rather it emerges as a point of leverage from which to achieve a more egalitarian redistribution of power, thereby leading to a greater democratization of the entire political process (Bachrach and Botwinick 1992: 2, 12). According to Karen Wendling (1997), participatory democracy is probably the most completely egalitarian form of democracy, as it seeks to extend beyond simple universal suffrage and the right to influence political leaders to the collective self-management of society as though there were no leaders. People, in other words, control all the circumstances that affect their daily lives and their destinies, which include the economic sphere as well. Participatory democracy addresses itself to institutional structures that will ultimately have bearing on questions of political equality.

At the same time, to the extent that democracy is about further accommodating diversity and the unequal interference of "special interests", there is then a role for public policy to play in the process generally. The minimum wage can serve as but one tool for finding accommodation. Economically speaking, we are not all going to be viewed the same. Those of us with fewer resources may not have the same level of autonomy and independence as those with more resources. Raising the wages of the working poor is not even going to make them feel less exploited. In relative terms, they are still doing menial work for barely subsistence wages. Still, the democratic process serves as a mechanism by which balance can be struck between competing and often unequal claims. And policy is the tool used to secure that balance. But in securing that balance, public policy may serve to bring to fruition core principles underpinning democratic society.

In the past, a minimum wage was viewed as an essential ingredient for workers to be able to see themselves as full fledged citizens--again, another key ingredient in being able to participate in the democratic process. During the late nineteenth century, a minimum wage as it was conceived of in terms of a living wage was intimately connected to personal autonomy and ultimately formed the basis of giving legitimacy to labor. Lawrence Glickman (1997) has argued that as far as most workers were concerned, when they sold their labor in the market place, they lost their sense of independence. Men who earned wages lost ownership of themselves to somebody else with great power over them. As a result of industrialization, men effectively became dependent on their bosses in the same way women had always been dependent on men in patriarchal families. Men who worked for wages saw themselves as no different from prostitutes. To earn a "living wage", however, would enable them to rise above the shameful image of an enslaved prostitute, and through such wages they would be able to achieve full citizenship. And in fact, the language of citizenship was often used to galvanize not only workers, but the broader middle class to support the concept of a living wage. Citizenship, in other words, was analogous to free labor, which was the same as being a free individual. By wrapping the minimum wage in the language of citizenship, social reformers effectively sought to put wage laborers on the same footing as others those that traditionally secured their rights of citizenship through the ownership of property and the economic independence they enjoyed as a result. In essence, then, the broad language of democracy and those elements important to it were being appealed to support the living wage in the past, and similarly the same appeal can be made with regards to the minimum wage in contemporary policy debates.

MINIMUM WAGE AND DEMOCRACY

In this section, I concentrate on the specific policy of the minimum wage as a policy measure intended to further the cause of democracy. In the pages that remain, I will show that the minimum wage has a role to play in enhancing the equal standing of individuals, as that which is essential for them to function more autonomously. Not only does the minimum wage improve their standing, but it serves to enhance their autonomy as individuals, thereby enabling them to have greater participation in the democratic process. By enhancing their autonomy, the minimum wage also enables low-wage workers to make greater claims to citizenship as both a process that furthers the equal dignity of all citizens and also as an essential ingredient for participation in the democratic process. And lastly, the minimum wage does have at least a modest role to play in economic development.

Equality On the question of equality, the issue isn't overall equality, but how the concept of procedural equality may in any way be affected by the narrow phenomenon of income inequality, in this regard, the minimum wage can only further equality to the extent that it can be established that the minimum wage has an effect on reducing income inequality. At issue is whether labor market institutions can be said to have a role in achieving a more equitable distribution of income, thereby reducing income inequality. Perfect competitive market theory blames rising inequality on structural changes in the economy which have resulted in a mismatch between good paying jobs and the skills available to workers. Because the main culprit is presumed to be technological change biased towards those with higher levels of education and skills (Juhn el al. 1993), labor market institutions like the minimum wage are either irrelevant or counter-productive. They only inflate wages beyond the worth of those workers in the secondary labor market. According to this school of thought, the labor market is divided into a primary market where high premiums are placed on skilled workers, and a secondary market where unskilled workers are trapped in the lowest-wage service sector of the economy. The growth in wage inequality between the primary and secondary labor markets has been caused by increasing skills differentials between the two (cf. Katz and Murphy 1992, Krueger 1993). Individuals, after all, can pass from the secondary labor market into the primary one if they upgrade their skills through education and training. Therefore, individuals should take steps, through education and training, to acquire the skills necessary to command higher wages.

Institutionalists in recent years have suggested that income inequality has indeed increased in recent years because of a shift in public policy and a corresponding decline in labor market institutions, most notably the minimum wage (Piore 1995; Gordon 1996; DiNardo and Lemieux 1997; Galbraith 1998, Lemieux 1998, Palley 1998; Craypo and Cormier 2000). Michael Wallerstein (1999), for instance, suggests that the more centralized wage setting is--with minimum wage setting as the most nominal form of centralized wage setting--the more equal will be the wage distribution. The corollary being that when no such mechanism exists, chances are greater that the wage distribution will be unequal. Moreover, once such institutions begin to deteriorate, rising income inequality is by no means an unexpected outcome. Stephen Machin (1997) found that the weakening of labor market institutions, most notably minimum wage councils, in Britain played an important role in rising income inequality there. David Lee (1997) too has shown that decreases in the minimum wage tend to increase measured wage inequality, and that the minimum wage, or the failure of it to keep up with inflation, may account for as much as 80 percent of "within-group" wage inequality during the 1990s. Specifically, increased wage inequality in the bottom tail of the income distribution is attributable to the erosion in the real value of the minimum wage during the 1980s, and that the falling relative level of the minimum wage can explain 70 to 100 percent of increased inequality in the lower tail. Fortin and Lemieux (1997) also found a decline in the minimum wage contributed to increased wage inequality specifically among women.

David Howell (1999) maintains that during the late 1970s the U.S. began experiencing a sharp ideological shift towards a preference for competitive market outcomes and solutions, and that this ideological shift did have direct effects on bargaining in the workplace. Increasingly, however, it has come to be recognized that the rise in income inequality is as much a function of changes in wage-setting institutions and social norms. Similarly, David Card and John DiNardo (2002) suggest on the basis of Current Population Survey (CPS) data that trends in the minimum wage and declining unionization do help to explain the rapid rise in overall wage inequality during the early 1980s. Moreover, Howell and Friedrich Huebler (2001) in data on worker literacy in OECD countries show that while changes in wage inequality can be in part accounted for by skills differentials, the more important factor appears to be the strong association between labor market institutions and the change in wage inequality. Therefore, to the extent that the decline of these institutions may be a contributing factor in the rise of income inequality, the corollary might then also be true, that a strengthening of these institutions would result in less income inequality--or at least greater equality among the bottom tail of the distribution.

The minimum wage, then, needs to be understood as a legal measure that effectively achieves for a larger group of workers through public policy what unions have been narrowly negotiating with specific firms for. Indeed, the initial legislative purpose of the Fair Labor Standards Act (FLSA) was specifically to assist the unprotected and unorganized who lacked sufficient bargaining power to negotiate adequate subsistence wages for themselves (Miller 1999: 193). In that the bargaining process may entail making concessions, the minimum wage by creating a wage floor effectively limits the concessions workers have to make in the bargaining process, thereby offering them a slightly greater measure of bargaining power. The voice that the minimum wage effectively gives these workers is important because minimum wage workers generally are not organized.

While in theory the federal minimum wage was intended to empower workers by establishing a mechanism in law to achieve some measure of economic equity, it was also limited in its scope. The initial legislation exempted a broad range of low-wage workers from coverage, most notably agricultural workers who by and large were disproportionately concentrated in the South. Southerners, who also controlled the Congress, were opposed to the minimum wage on the grounds that it interfered with their way of life, particularly their tradition of paternalism (Alston and Ferrie 1999). Southerners viewed the minimum wage as an attempt by northern industrialized states to impose their will on the South. Limiting the coverage was a compromise that was agreed to in order to eventually secure passage (Levin-Waldman 2001a).

One could argue that this compromise effectively excludes workers, but the argument could also be made that it nonetheless began a process of democratizing the labor market in terms of the standing that workers would enjoy among one another. Still, by limiting the extent of coverage, limits were effectively imposed on the extent to which the labor market could be democratized. In the end, some workers enjoyed greater standing than others, meaning that not all workers are treated as equals. Invidious distinctions essentially exist between classes of workers, which means that according to Dworkin's criteria they are not being afforded equal respect and treatment. And yet, the foundations are nonetheless established for greater democratization, as each policy measure, as limited as it may be, lays a building block for subsequent policy measures.

Still, increases in the minimum wage are not going to have a radical effect on the income distribution that those at the bottom are the equals of those at the top. It will not radically affect social standing. It isn't going to increase their bargaining power by that much And it certainly would not begin a process towards workplace democracy. But to reduce income inequality somewhat will still have a small impact, especially on personal autonomy. That the gap between the top and bottom decreases also implies that the distance between them is narrowed. The distance traveled from the bottom to the top may not appear to be as daunting, which may offer some a sense of hope that they too have the potential to make it. In this vein, it raises their morale, with the effect being that they feel less exploited. Will they necessarily be social equals? No. But that they are less unequal means that a potential barrier to access may be diminished. Also by raising the wages of those at the bottom, the minimum wage effectively accomplishes for this sector of the labor market what labor unions accomplish for other sectors: it gives them a sense of voice, which it does by establishing a set of standards through the force of law that can also be enforced through the state (Tarling and Wilkinson 1997: 103). This, in and of itself, can be a source of empowerment, with the effect of enhancing their autonomy. Not only, then, does this become a necessary precondition for a well functioning democracy, but for an efficient economy as well, neither of which are mutually exclusive.

Autonomy, Empowerment and Citizenship

Autonomy depends on access to and control over economic resources. The minimum wage, then, might then be viewed as a measure aimed at preserving the framework that allows individuals to function as autonomous citizens. Does a higher wage not have the effect of giving workers greater voice, which in and of itself becomes a basis for empowerment? It does not give greater voice in that it increases the bargaining power among tow-skilled workers in the way that unions do. But it does give them greater voice in that higher wages improve their morale and thereby enable them to have greater dignity in their work.

Very little research has been done on the effects of wage increases on minimum wage earners' morale, but in a study on the effects of a living wage in Baltimore--which creates a wage floor similar to the minimum wage, but limited to those firms contracting with the unit of governance that established the living wage ordinance--Neidt et al. (1998) found that based on interviews with those workers who received pay increases as a function of the living wage, most responded that they felt better about themselves because they were earning more (pp. 27-28). Individuals who earn more are more likely to participate in the democratic process, even if their participation is restricted to the most nominal form of participation: voting. But the fact that they feel better about themselves alone should enable them to behave more autonomously.

At the same time, the literature on voting shows that people who are better off economically, i.e., they have higher incomes, are more likely to vote than those who do not. Specifically, those with higher socioeconomic status (SES) are more likely to vote than those with a lower one (Verba and Nie 1972). Thomas Cavanagh (1981), for instance, suggests that between 1964 and 1976 there was a widening of the gap between the most advantaged and the least advantaged in terms of voting behavior, and that the net decline in voter turnout has generally been more concentrated among low-income voters. There is the point of view that economic adversity is likely to decrease people's likelihood of voting, largely because of the stress associated with adversity. Because individuals become preoccupied with their own personal economic well-being, i.e., their own subsistence, participation becomes a luxury they may not feel that they can necessarily afford. But they may also opt out because they do not perceive there to be any benefits to participation. This may be particularly true for low-wage workers who do not feel that there is anything to gain from participation. Steven Rosenstone (1982), for instance, found that with regards to the 1974 midterm election, those people who were worse off financially in 1974 than in 1973 were 10 percent less likely to vote than the rest of the population, implying that for every 10 percent of the population that was worse off financially, voter turnout declined by 1 percentage point, and this was true for citizens of all ages, incomes, occupations and educational levels. Unemployment resulted in a further reduction in turnout by about 2 percent. And finally, the poor were also found to be less likely to vote than the rest of the population. Specifically, those earing less than $2000 in 1974 were 9 percent less likely to vote, while those whose incomes fell into the $2,000-$3,999 and those whose household incomes fell in the $4000-$7499 range were only 5 and 4 percent respectively less likely to vote. (1)

These trends, of course, also affect policy. Roger Tarling and Frank Wilkinson (1997) suggest that the main obstacle to a redistribution of income whose goal might be to broaden self-sufficiency in conventional economics, or economic theory, is the risk that such measures will result in a reduction of the overall level of economic performance. In the real world, however, the inability to bring about such redistribution has little to do with economic theory, but everything to do with the relative power (or lack thereof) of those groups that might seek such measures. Simply put, low-wage workers lack power, and whatever voice they are able to obtain is a function of the relative power the various constituencies backing them effectively bring to bear in the political arena. To the extent that low-income groups lack power because of their effective disfranchisement, it then is not hard to see how public officials are less likely to adopt measures that will be of benefit to them that they in turn can be more self-sufficient and ultimately more predisposed to participation. Clem Brooks and David Brady (1999) note that the cumulative effects of shifts in average income during the past fifty years has significantly altered the outcome of presidential elections, thereby enhancing Republican victories and limiting the margin of Democratic victories. As household income rises, individuals are more likely to vote and their votes are more likely to be in favor of policies less favorable to the disadvantaged. Therefore, it ought to follow that minimum wage increases that result in workers having a higher economic status than previously may also result in more low-wage workers voting than in the past. Moreover, they are also likely to vote because it is a policy issue that they have a stake in. This is especially so if they are able to see that the minimum wage is a policy that truly makes them better off.

On a more basic level, however, by providing individuals with greater income, it affords them greater opportunity to pursue their own respective self-interests. In short, it enhances autonomy. To a certain extent, a minimum wage--and at least one that keeps pace with inflation and allows individuals to live with some measure of dignity--effectively provides individuals with perhaps what Amy Guttmann and Dennis Thompson (1996) refer to as a fair opportunity. Were this truly a deliberative democracy, they argue, a basic opportunity principle would secure citizens an adequate level of basic opportunity goods. Included in such opportunity goods is that of an adequate income level, which they define as that which enables one to live a decent life according to society's current standards. And yet, this is not the same as equality of opportunity, rather they suggest that the operative principle ought to be fair opportunity. Fair opportunity holds that government should ensure that each citizen has a fair chance of securing opportunity goods such as advanced education and skilled employment, i.e., those tools that will enable individuals to secure the types of positions that enable them to live comfortable middle class lives, which clearly has implications for society's income distribution. But by talking about opportunity to join the middle class, they in essence acknowledge the importance of the middle class to the maintenance of democracy. When they talk about a basic opportunity principle, they are specifically talking about it within the context of welfare provision. Should the minimum wage be viewed in the same vein as welfare?

For some, the minimum wage may constitute a form of welfare because by mandating that employers pay their workers what they may not be worth, the minimum wage effectively redistributes income from those who have (employers) to those who do not (their workers) in a manner similar to the welfare system redistributing from the larger public (taxpayers) to the poor (those who do not work). An extreme reading of this position views it as akin to stealing (Nozick 1974, Epstein 1988). It may also be viewed as a form of welfare because, like welfare, it assumes that the income one receives ought to be based on need rather than prior experience, skills and ability. Indeed, during the early part of the twentieth century when state minimum wage laws only applied to women, they were calculated on the basis of what it was thought that women needed in order to maintain themselves (Persons 1919). At the same time, however, the minimum wage may differ from welfare because those workers who receive it do work. They are performing services. Even though it may not be welfare provision in the narrowest sense, it is part and parcel of the broader welfare state.

Robert Goodin (1988) has suggested that the purpose of the welfare state is to do what is good for people--to ensure their basic needs are met. To do this, however, does not require public assistance transfer payments per se, but can be done through work programs. By the same token, their needs, i.e. their need for income that enables them to live above poverty, can be met through wage policy. If a democratic society ought to provide its citizens fair opportunity, the case might well be made that a minimum wage does further those ends. But there is perhaps more to this.

Conservative critics of welfare who posit the need for recipients to work do so by appealing to a conception of equality in democratic theory, which simply says that we should all be treated the same. If the majority of us go to work, and that we do this is constitutive of a social norm, the poor should be treated no differently. Consider the argument advanced by Lawrence Mead (1986) that to require welfare recipients to work (even by force if necessary) is to require them to function as equal citizens in a democratic society. With rights come obligations, and what puts us all on an equal footing is that we each work, as that is what it means to be a contributing member of society. Equality means to be treated no differently than anybody else. To the degree that conceptions of citizenship in America revolve around work, welfare recipients must work just the same as everybody else, especially if they are to receive public assistance. Micky Kaus (1992) has similarly advanced the same argument that work for welfare recipients is to in effect insist that they function as equal members of the community. Though recent changes to the nation's welfare system require that recipients work, both Mead and Kaus might advance the same arguments with regards to the provision of Guttmann's and Thompsom's basic opportunity goods--that they should not receive basic opportunity goods unless they give back something to the community in the form of work. The argument might then be made that to the extent that the minimum wage serves to make work more viable, it enables individuals, particularly poor ones at the bottom of the income distribution, to participate in that common enterprise, around which citizenship in the American democratic polity appears to revolve. Citizenship, after all cannot be divorced from autonomy.

Timothy Gaffaney (2000) maintains that a democratic polity operates on the premise that individuals will be politically autonomous that they indeed will be citizens. A goal of democracy does not necessarily have to entail economic equality. But a democratic polity doesn't merely respect and ensure non-interference and non-coercion. It must also ensure that conditions for participation in that democracy are available to all individuals, for by doing so it guarantees a universal application of citizenship. In fact, the state must guarantee conditions for full citizenship. For Gaffaney, this ideally would mean that government provide the poor with the practical training and skills necessary for conducting democratic government. It might mean providing them the basis upon which they can achieve economic independence. But when other sources are wanting, public assistance must be provided because it can enable participation in democratic decision making and in the constitution of democratic dialogue. Welfare benefits, then, become a central component for citizenship. Consequently, the provision of welfare benefits by the state becomes a basic aspect of political legitimacy.

For Anderson, however, the state need not go this far. According to her conception of "democratic equality," all law-abiding citizens are entitled to effective access to the social conditions required to maintain their freedom, i.e., their ability to make choices. Therefore, democratic equality seeks to abolish socially created oppression. It views equality as a social relationship. Moreover, individuals are regarded as equals when each accepts the obligation to justify his/her actions according to principles acceptable to others. Democratic equality, then, does not require the elimination of income inequality once all citizens enjoy a sufficient set of freedoms to function as equals in society. Society does not have to compensate for inferior natural endowments, but it does have to ensure that conditions are such that individuals can function as equals. In this vein, she suggests that a minimum wage might well be in keeping with the requirements of democratic equality because it establishes a condition necessary to function as equal and autonomous citizens. Citizenship requires more than the functioning as a political agent; it requires participation as an equal in civil society. Although democratic equality does not require the elimination of income inequality per se, it does suggest limits. These limits would be the point at which income could be converted into status inequality (Anderson 1999). Which is to say, that considerable income inequality could be a threat as it might result in status inequality. But at the same time, policies that limit income inequality, albeit they will never eliminate them altogether, serve to preserve the necessary conditions for the maintenance of equal social relations among people.

Economic development

To the extent that sustained democracy requires economic development, the minimum wage serves that purpose in that it too can be a tool for economic development. The idea that a minimum wage serves the development function flows in part from the second prediction made many years ago by George Stigler (1946), which has not received much attention in the literature. That is, a minimum wage if it is effective will do one of two things: it will either result in the layoff of those workers whose value is less than the minimum, or it will result in an increase in productivity among low-efficiency workers. Greater productivity will in part arise from the tendency of employers to replace heavily labor intensive manufacturing and production processes with more capital intensive ones. To a large extent, this second Stigler observation echoes the Webb effect. Sidney Webb (1912) argued that although an increase in the minimum wage might well result in a wage exceeding the marginal product of the worker, the employer would now have incentive to find ways to increase productivity either by getting workers to produce more or by substituting technology for labor. Workers too would have incentive to invest in their own improvement and society in general would ultimately find that it too would have a stake in investing in greater education for the purposes of ensuring a better prepared workforce for the more technologically demanding labor market.

During the 1930s, New Deal planners who proposed the minimum wage viewed it as a tool that would both raise the wage structure in the South and bring about southern economic development. For national policymakers, the low wage structure in the South, especially in industry, was a classic example of why the minimum wage was needed, not just to end poverty, but to bring about the modernization of the South, thereby making it more productive and efficient. Bruce Schulman (1991) observes that the South's most vexing problem was how to organize its labor force after the end of slavery. Primarily an agrarian economy, the southern labor market had for centuries been supplied by slaves. Its limited industrial capacity was concentrated in low-wage, low productivity industries. Low-wage manufacturing, specifically textiles, hosiery and lumber formed the backbone of southern industry, and they relied heavily on unskilled labor, which often included women and children (p. 5). And yet, insofar as New Deal planners sought the economic development of the region, they by and large viewed the region no differently than we might view developing regions today, say developing democracies. Just as they required economic development for democracy to flourish, so too did the South. A minimum wage would force employers to modernize and effectively invest in human capital, which ultimately would increase productivity.

CONCLUSION

In this paper, I have tried to argue that there is a role for the minimum wage in achieving greater democracy in at least three areas: economic equality, to the extent that it may lessen income inequality; empowerment, which enables individuals to more fully participate in the democratic process as more autonomous citizens: and economic development insofar as increases in the minimum wage may have an impact on a region's overall wage structure. None of this achieves the more encompassing participatory democracy that contemporary democratic theorists talk about, but it does perhaps have the effect of accomplishing greater democracy by establishing some of the necessary conditions for individuals to participate more effectively in the democratic process.

Democracy is never a finished product, but constantly requires steps to ensure its continued survival. Democracy is something that individuals have to work at. But they cannot be expected to do so unless they enjoy a minimal level of autonomy. Rather policy is needed to ensure that the circumstances exist for individuals to start as equals in relation to one another. Were the minimum wage to be viewed in these terms, it might conceivably be viewed as a larger issue that impacts on us all because it impacts on the character of our democratic polity. And it perhaps forces us to focus on just what some of the necessary conditions might be for the maintenance of democracy. To make a "democratic" argument for the minimum wage is to effectively broaden its political appeal. When the minimum wage is typically couched as either a measure that results in disemployment for teenagers or that which may assist the poor, it unfortunately isn't an issue that the broader middle class is able to relate to. An issue that theoretically only affects a small and marginal group of people is not one that we can easily see in utilitarian, let alone democratic terms. But as democratic citizens, we should be able to relate to fundamental principles of democracy even if we cannot see ourselves to identify with the plight of those at the bottom of the income distribution.

Moreover, from a policy stance, a discussion of the minimum wage in these terms should at least enable us to consider what types of public policies are necessary to bring about greater democracy. By itself, the minimum wage is not a sufficient condition, but there are no doubt other policies that would compliment the minimum wage in this endeavor. Too often when we approach public policy, we do so from a very monolithic ideological viewpoint. Ideologically, one is either for increases because one is a left leaning liberal who favors big government, or one is opposed because one is a right leaning conservative who is strongly committed to free markets (Pool and Rosenthal 1991). To view the minimum wage in terms of its relationship to democratic principles is perhaps to offer policymakers a way out of that ideologically constraining dichotomy. Now the issue is whether it, or any other policy for that matter, furthers the ends of democratic society. Should our philosophic underpinnings not be a basis upon which we measure public policy (Levin-Waldman 1996)? If we are able to change the terms by which we conceive of policy, we are able to view the minimum wage in perhaps a wholly different light. No longer is it a question of whether the minimum wage is beneficial because it raises the wages of some or is harmful because it may result in the disemployment of others. Rather, it is whether it, along with other measures, serves to bring about a more equitable and democratic society. Such measures might include trade and industrial policies that, while they too may fly in the face of pure competitive market theory, also serve to maintain a broadly equitable democratic community by preserving the middle-class jobs base.

(1) In 1974, the poverty line for a family of three was $3,936, and for a family of four it was $5,038

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Oren Levin-Waldman

Metropolitan College of New York

olevin-waldman@metropolitan.edu

Oren M. Levin-Waldman is the Henry J. Raimondo Professor of Urban Research and Public Policy at New Jersey City University. He is the author of The Case of the Minimum Wage: Competing Policy Models (SUNY Press): Reconceving Liberalism: Dilemmas of Contemporary Liberal Public Policy (University of Pittsburgh Press): and Plant Closure, Regulation, and Liberalism: The Limits to Liberal Public Philosophy (University Press of America). His articles have appeared in Review of Social Economy, Journal of Economic Issues, Regional Labor Review, Rhetoric" & Public Affairs, Public Affairs Quarterly, and Challenge.

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