"The Labouring Classes Should Have a Taste for Comforts and Enjoyments"

McDonald's model budget for its minimum-wage employees -- along with the smug, fatuous, those-people-aren't-like-us-dear defenses of it -- has been the target of well-deserved scorn.

This kind of thing has been around forever (or at least as long as capitalism). Two hundred years ago, liberal reformers offered "Promoting Sobriety and Frugality, and an Abhorrence of Gaming"as the solution to the collapse of wages following the Napoleonic wars, and gave workers instruction on "the use of roasted wheat as a substitute for coffee." You could make an endless list of these helpful suggestions to the poor to better manage their poverty.

To be fair, liberals today do mostly see this stuff as, at best, an effort by low-wage employers to divert attention from their own compensation policies to the personal responsibility of their workers. And at worst, when the budget help includes assistance enrolling in Medicaid or the EITC, as a way of getting the public to subsidize low-wage employment.

But there's a nagging sense in these conversations that, disingenuous as McDonald's is here, still, at the end of the day, frugality, living within one's means, is a virtue; that the ability to prioritize expenses and make a budget is a useful skill to have. Against that view, here's Ricardo on wages:

It is not to be understood that the natural price of labour, estimated even in food and necessaries, is absolutely fixed and constant. ... It essentially depends on the habits and customs of the people. An English labourer would consider his wages under their natural rate, and too scanty to support a family, if they enabled him to purchase no other food than potatoes, and to live in no better habitation than a mud cabin; yet these moderate demands of nature are often deemed sufficient in countries where 'man's life is cheap', and his wants easily satisfied. Many of the conveniences now enjoyed in an English cottage, would have been thought luxuries at an earlier period of our history. 

The friends of humanity cannot but wish that in all countries the labouring classes should have a taste for comforts and enjoyments, and that they should be stimulated by all legal means in their exertions to procure them. ... In those countries, where the labouring classes have the fewest wants, and are contented with the cheapest food, the people are exposed to the greatest vicissitudes and miseries.

In a world where the price of labor power depends on its cost, there's no benefit to workers from budgeting responsibly, from learning to get by on less. The less people can live on, the lower wages will be. On the other hand, to the extent that former luxuries -- a decent car, some nice clothes, dinner out once in a while, whatever consumer electronics item the scolds are going on about now -- come to be seen as necessities, such that it's not worth putting up with the bullshit of a job if you still can't afford them, then wages will have to rise enough to cover that too.

For much of the 20th century, it seemed like we had left Ricardo's world behind. Among economists, it became a well-established stylized fact that it's the wage share, not the real wage that is relatively fixed. To even sympathetic critics of Marx, the failure of real wages to gravitate toward a (socially determined) subsistence level looked like a major departure of modern economies from the capitalism he described.

These days, though, the world is looking more Ricardian. For the majority of workers without credentials or other shelter from the logic of the labor market, real wages look less like a technologically-fixed share of output than the minimum necessary to keep people participating in wage labor at all. In the subsistence-wage world of industrializing Britain, workers' "frugality, discipline or acquisitive virtues brought profit to their masters rather than success to themselves."  Conversely, in that world, which may also be our world, profligacy, waste and irresponsibility could be a kind of solidarity.

I would never presume to tell someone surviving on a minimum-wage paycheck how to live their life. I know that being poor is incredibly hard work, in a way that those of us who haven't experienced it can hardly imagine.  But as a friend of humanity, I do worry that the biggest danger isn't that people can't live on the minimum wage, but that they can. In which case we're all better off if McDonald's employees throw the bosses' helpful budget advice away.