Photo: Tzvika Tishler
It’s hard to avoid the feeling that there is some kind of basic humane and moral failure in curbing of the proposal to raise the minimum wage. Did the people who voted it down stop for a moment to think of how life looks down there at the bottom? Did they think about the feeling of a single mother who does honest work, let’s say as a cashier or cleaning lady, working up to 10-hour days and making a huge effort to provide one warm meal for her children – and after all that, she needs to look them in the eye and tell them that they won’t be going to summer camp with their friends, or that they won’t get new sneakers for gym class?
There is something terrible about a society that robs working, honest people of the ability to look their children in the eye.
Yet beyond the humane and moral failure, what we have here is short-sightedness by the establishment, because this is a destructive process even in pure economic terms. Even the strict ideologists of the economic Right, such as Benjamin Netanyahu, must understand that there is a problem with a negative incentive for honest work. A healthy society cannot afford to teach its members that those who work hard and play honest get screwed. This corrupts the fundamentals.
We’re used to thinking about corruption from above, among senior officials. Yet a negative incentive for honest work also corrupts from the bottom. In truly corrupt states, it’s not just a matter of being unable to trust politicians; one also cannot trust the police officers. In such states, motorists hand over their driver’s license to a cop with a bill folded inside in order to avoid a ticket. In such states, doctors need to be paid to get decent treatment. In such states, one needs to bribe city hall officials in order to get a business permit. Eventually, the investors flee too.
Growing risk for investorsWe’re not there. Not yet. However, we’re certainly taking steps in that direction. Think about the police officer who works day and night, on holidays and on Shabbat, yet nonetheless cannot provide for his family. How great is the temptation to get extra income from a casino owner in exchange for warnings ahead of police raids. Or think about the bureaucrat who cannot buy a new school bag for his son. How great the temptation to help some shady dealer get a dubious building permit.
A negative incentive for honest work is in fact a positive inventive for corrupting the order. It turns the world upside down: An honest, hard-working person must look down when facing his children. Meanwhile, those who engage in shady deals can hold up their heads.
When such processes spread, the entrepreneurs also get hurt on top of the poor, because when there is no law and order a contract is not a contract, the building permit you got today may evaporate tomorrow, and a business that could have succeeded may collapse because it needs to pay protection. When there is no trust in order risk grows, prompting investors to take their money elsewhere.
As the economy is integrated into society, an economic policy that corrupts society also corrupts the economy. Even those who do not feel compassion or a sense of human decency towards working people should at least remember the following: A place where honest work doesn’t pay off is ultimately a place where investment doesn’t pay off either. In a place where citizens cannot trust the police, they will ultimately be unable to trust credit lines.
So if this government lacks the heart needed to see the humanitarian implications of its policy, at least it should have the sense to see the long-term economic implications.