Free to Choose, Revisted

Yuval Levin believes that neither hyperindividualism nor centralization can help financially struggling Americans like Lance, whom I wrote about yesterday in the first part of my review of Levin’s The Fractured Republic. I basically agree with Levin and found his focus on empowering mediating institutions—beginning in the family and spreading outward to places like schools, religious congregations, and the marketplace—right on point. And it’s precisely because I agree with him that I found his discussion about the economic challenges confronting struggling Americans disappointing.

Why? Employers are mediating institutions, too, and many that employ low-skilled employees are failing their employees. However, in Levin’s account, my friend Lance mostly needs a skilled job; he doesn’t have much to say about the concrete challenges that confront low-skilled workers in their current low-wage jobs.

Levin does acknowledge that conservatives need to get better at combating “the ways in which big corporations (sometimes working with big government) consolidate their power over workers and consumers and restrict the very competition and dynamism to which friends of the market ought to be devoted.” But the “power over workers” part is a point that he could have developed further, and one hopes that he has in mind much more than his proposal to ease licensing restrictions for barbers, manicurists, and other select professions (which, whatever its merits, wouldn’t do anything for the vast majority of low-skilled workers).

I saw no mention of many of the specific challenges that I’ve heard low-skilled workers like Lance describe to me. For example, I didn’t read a word in his book about fast-food and retail employers routinely creating haphazard, on-call schedules for employees; businesses built on models that depend on part-time hours for full-time job seekers, and overtime hours at regular pay for the fortunate few able to climb to the top as managers; managers finding creative ways to fire or not promote workers who get pregnant, or sick, or suffer an accident, or lack the sufficient “flexibility” to move up the company ladder because they have kids to raise; the estimated $20 to $50 billion annually that employers take in wage theft; and in America’s biggest companies, the huge rewards to investors at the expense of ordinary employees.

What do conservatives have to say about all that? To me, it sounds as if hyper-individualists are conquering the low-skilled workplace. Milton Friedman’s famous dictum that the only “social responsibility of business is to increase its profits,” as he put it in a 1970 New York Times Magazine essay, seems to have become incarnate in the low-wage workplace. After all, many big, low-wage employers are still amazingly profitable and could probably afford to pay their workers more. In a 2013 article, Fortune journalist Stephen Gandel crunched the numbers and estimated that Walmart could afford to pay an average employee about $33,000 a year, instead of the about $22,000 that it was at the end of 2012. Entrepreneur Nick Hanauer notes that Sam’s Club and Costco operate similar stores and are both very profitable—but one chooses to pay its cashiers almost $15 an hour (Costco), while the other chooses to pay cashiers less than $10 an hour (Sam’s Club).

“Well, then,” one might point out, “why doesn’t Lance just get a job at Costco?” In that 1970 New York Times Magazine essay, Friedman also argued that in an “ideal free market … all cooperation is voluntary, all parties to such cooperation benefit or they need not participate.” In other words, my friend Lance can just find another job if he is so unhappy in his current job. The job of his employer is to rake in profits for shareholders. If Lance can’t pay the rent on his wages, that’s his problem. Legal scholar Lynn Stout calls this the doctrine of “shareholder dictatorship”: the idea that the sole purpose of firms should be to maximize profits for shareholders. And pointing to the fact that Lance could theoretically get a job at Costco often acts a way of shielding the deeper issue of how many of the big, low-wage employers distribute profits.

Low-wage workers need to be treated justly where they do work.

For their part, in response to the challenges confronting low-wage workers, many liberals frequently point to midcentury America, not (it seems to me) because they are merely nostalgic for a bygone era, but because they believe it represents the triumph of a hard-fought ideal: even the lowly meatpacker deserves a living wage, because he is, in fact, not so lowly; his job has dignity, and he deserves a just wage for himself and his family. 

And, today, many liberals believe that what was said about the meatpacker should also be said about the Wendy’s cook, and the home health aide, and all the other “interactive manual” laborers whose jobs are vital to our economy. In those accounts, Lance and low-skilled workers like him might benefit from more skills. But they also need to be treated justly where they do work—and that means things like a living wage, affordable health insurance, paid sick leave and paid family leave. In other words, in an earlier era, many American leaders argued that low-skilled workers deserve just wages and, to a certain extent, they won that argument (it’s how we got Labor Day on our calendar). And, the argument goes, if we did it before, we can do it again.

Indeed, conservatives should have a problem with the ways in which the mediating institution of business—and especially the low-skilled workplace—has been hijacked by hyperindividualism. As Levin notes, both the Right and Left share a deep agreement that “a free society is simply a collection of individuals who are free of coercion or constraint, and nothing more.” That’s wrong, Levin says. Freedom is not just about “the power to act” or “an absence of restraint,” but also the ability “to choose well.” The truly free person is free not just from coercion, but also from “the tyranny of his unrestrained desires.” Moreover, society doesn’t begin with such free individuals—“it produces them.”

Applied to businesses, we can borrow one of Friedman’s favorite phrases and say that business leaders are indeed “free to choose”—and that means free to distribute profits more equitably to ordinary employees; free to treat employees not as isolated individuals but as parents and spouses and family members; free to treat cashiers and cooks, not as servants of shareholders, but as key stakeholders who deserve just wages. And when the worker feels like he and his family are being treated as an end, instead of as a means to some other end, his employer mediates an important message: you matter, your family matters, and we care about you being a good parent and partner. By contrast, when the worker feels like he is a means to an end, his employer also mediates a message: you’re not that important and who you are as a worker is more important than who you are as a family member. If business is a mediating institution, poverty wages and living wages mediate values. And we can do better.

If business is a mediating institution, poverty wages and living wages mediate values.

But, although certainly unintended, Levin’s book left me with the impression that the outside forces barreling down on low-skilled workers are just too great for any meaningful action, and that those who suggest otherwise are either blinded by nostalgia or want the government to intrude “deep into the internal decision-making of firms.” Economically (the argument seems to go), the most important thing we can do for the Lances of the world is to empower them to get out of their current low-wage jobs and gain the skills that demand higher wages.

For instance, his account of the economic challenges facing poor and working-class people is guided by four “structural transformations,” or “variables”: “globalization, automation, immigration, and consumerization.” Here, everything is all about those things that happen to the economy; there is no moral analysis of leaders’ actions. Things become abstract, complex, then inevitable—and in that order. For instance, we learn about “a subtler set of changes in employment arrangements that is leaving many workers feeling insecure,” but never about the employers and policy leaders changing the arrangements (if anything, he says it’s simplistic “to blame avaricious employers and business owners”). He favors an account that emphasizes how people changed their identities from laborers to consumers—which is an interesting point—but in the process practically absolves employers of any responsibility. Clearly, Levin points to complex challenges, but as Jeremy Beer has noted in an excellent essay specifically about the rise of consumer capitalism, we also shouldn’t forget how our circumstances are “contingent and intended.” In other words, we really are free to choose.

A final note: you don’t necessarily have to be in favor of across-the-board increases in the minimum wage in order to actually do something meaningful for the Lances of the world. Channeling Levin, one could argue that because of the great diversity in employers and regions, a minimum wage applied uniformly does more harm than good—and at the same time make a strong case for why employers who can do so should voluntarily strive to pay just wages to all adult employees and improve the low-skilled workplace.

Most of all, when it comes to the world of low-wage work, we would do well to take “a long, loving look at the real,” as the spiritual writer Walter Burghardt defines contemplation. We need a closer look at what is actually happening on the ground, more up-close stories, and an awakened conscience. When it comes to our neighbors in low-wage jobs, we need exactly what Levin prescribes: close attention to the “near at hand.” If we do that, we’ll get a lot of things right.