What Wage Is Fair?

So hiring people at minimum wage isn’t Godly, correct?

What wage is fair? Ten dollars an hour? Twenty? How about one hundred?

I understand there are flaws in capitalism, but I haven’t seen any better options anywhere?

Say we raise minimum wage to 20 dollars an hour. Then people will be able to buy housing and food and everything they need, right? Probably not.  If businesses did stay in business and kept all workers in their jobs at the new wage, massive inflation would occur. First off, in order to keep up with rising labor costs, prices would have to rise on everything from a gallon of milk to a mercedes benz. These costs would adversely affect those making the now twenty dollar minimum wage. Beyond that, massive inflation would occur. A minimum wage earner who worked forty hours a week would be making 40,000 a year. The average income of an american citizen in 2005 was 34,000 dollars. That means a vast majority of the country all ready is making less than 40 grand. Were they all to be bumped up, massive inflation would occur, likely making their buying power the same or less than it was before (those whose incomes were nearer to 40,000 a year would have less spending power while those at the bottom would most likely have the same amount).

I would be all over a new idea that is better than free market capitalism, but until I see one, I’m still going to support our current economic system


20 responses to “What Wage Is Fair?

  1. An economist made the same argument in a WSJ editorial a few weeks ago. A small business owner then sent in a letter to the editor to counter, saying that he always had a hard time keeping employees he paid min wage before the min wage is raised, then once it is raised, those employees tended to stick around longer. Then the original writer wrote in again and asked, “were you really waiting for the gov’t to act before you gave your employees a raise?”

  2. Good comment by Ben…
    Justin, read this:

    Florida raised the minimum wage, and it worked… Practically no discernable negative effects, and yet it is helping so many people. The inflation crap is a republican myth — don’t believe it.

    Like the WSJ article, employers often find that any “negative” effects are negated by increased productivity/loyalty of the employees. Sad that we do have to wait on the government to force us to treat our fellow man as equals and give them the dignity of a living wage — So that they can be proud of their hard work and feel a sense of worth that they are providing for their family — but that’s what it’s come to.

    It’s a shame to be that people who bust their busts at 5.15 an hour can’t provide for their families when certain companies have had CEO’s being paid millions of dollars simply to run their business into the red and sit behind a plush desk with all their benefits. And then pro athletes… Well, you get my drift. But that’s all another discussion…

  3. It works great when we have good solid economic growth as we’ve been having recently. The problem comes in harder times.

    A small increase isn’t going to put major corporations in the service sector out of business… what that study doesn’t see is how many small businesses went under that have been overlooked, or how many people didn’t get a job that wanted one because of the new wage. There are still unemployed people that are making absolutely nothing per month who an employer might be able to hire for less than 6.40 but can’t afford to hire at the higher wage.

    businesses will raise wages on their own. When the economy is good, wages go up. Only three percent of wage earners in this country make minimum wage… most of them not for long and the majority of those are unskilled laborers under the age of 25 and illegal immigrants.

    You still didn’t answer the question I posed in the post. What wage is fair? Surely you know that 6.40 an hour full time is only 13,000 dollars a year. Definitely not enough to keep a family of four out of poverty. Shoot, a one bedroom apartment here in murfreesboro would cost a nearly half your yearly wages. My question is, why not make the minimum wage 10 dollars an hour, or 20, or how about 50 dollars an hour?

    Well, we can’t do that because companies would go out of business or they would fire nearly everyone. Its not a myth… small increases show the same results on a much smaller scale, so small that it might get overlooked in studies. It still happens though.

  4. Your loading the question by forcing the result to extremes. You’re trying to say that the only acceptable minimum wage increase would be to 20+, therefore making it unacceptable. A living wage (placing someone directly at the poverty line) would be 9.06 (national average)… This is nowhere near your $20-50 range, so I don’t buy that argument.

    Who’s to say that an unwed mother below age 25 is not deserving of something better than minimum wage. Even though minimum wage is mostly paid out to people under 25, these are for the most part, independent poeple/single parents who need the increase. Most of your middle-class white suburban kids usually get jobs above minimum wage anyway… so they can buy their Ipods and go on church ski trips, etc. The poeple who really need the money aren’t getting it. They are losing out to people of privelege and opportunity.

    Also, your statistics on minimum wage (3%) I will agree with. However, you must realize that these statistics are only descriptive of those paid an hourly wage. Many more people are paid on salary, thinking they are above minimum wage, but when you calculate their hourly wage, it’s often equivalent to the minimum. Bureau of Labor Statistics (where you probably quoted your numbers from) even admits this deficiency in their analysis.

    Also, many business may not pay “minimum wage” but may set their wage rates within $.50 or $1 of the minimum wage to avoid the “I pay minimum wage” stigma. Even if the percentage of people affected by this were really only 3%, suddenly they’re not important because the population is not big enough? Hmm… Wonder What Jesus Would Think. We sure give as much attention to the TOP 3% of wage earners.

    If you want to pay everyone $50 an hour, good luck… That’s $104,000 per year, 90% of people make WAY less than that, but that’s what you get for blowing the argument out of proportion.

    I don’t think you read the study I linked to, because your comments were answered in it. Florida unemployment rates decreased at a FASTER rate than the national average, meaning YES — more people got jobs than would have been expected had the minimum wage not increased. The number of businesses has continued to grow since the hike, and even at a faster rate than previous years. So, NO small business were NOT effected, since they tend to be the majority of businesses.

    Justin, it’s obvious you did not read the findings, because your questions (and more) were answered in the report. If you want to challenge the data itself, be my guest. But if we’re going to have real dialogue about thbis issue, you really ought to read things and not gloss over them assuming you know the answers. From your 30-minute delay in response, I don’t believe that would have been adequate time to read the report and formulate a well though-out response. So feel free to to read the report:

    As to your question about a “fair” wage, I would suggest something around 9.06 if not higher, possibly even tying it to regional CPI indices and inflation so that buying power will not change. However, I reccommend you move to the inner-city for a year or two with your gets, you and your wife-to-be each pick up a minimum wage job working 40+ hours a week, and then decide what you think is fair.

    It’s only fair.

  5. In all honesty Dman, I would like to know who you are. I know you’re at abeline, but that’s about it.

    I read the findings quickly and I did notice the faster rate of decrease in florida unemployment post minimum wage increase, however, I’m always leary of statistics because they aren’t concrete.

    First off, that study doesn’t take into account the differing economies of Florida and other states. Florida was hit by hurricanes in 04 and 05 which brings with it a need for construction employment. Was that factored in?

    Sure the unemployment went down more than across the board in the country, but would it have gone down even more without a minimum wage hike? I would imagine it would.

    Maybe I should rephrase the argument. Would those in poverty not benefit all the more from an increase to 15,20, or 50 dollars an hour? I would imagine they would. According to you, they are just barely out of “poverty” at a wage of 9.06 an hour. Why not raise it even more and get them way out of poverty? I mean, why not just make the minimum wage so high, if it doesn’t affect job creation, that everyone is just rolling in the dough?

    The amount of money a poor person makes has increase dramatically over the last century, even with the minimum wage being raised. In 1980, the poverty line for an individual was $4190 per year. In 2003, it was $9393 for an individual. Minimum wage in 1980 was 3.10 an hour. Full time, you would barely be above poverty. Same is true now. Minimum wage gets you between 10 and 11 grand a year working full time.

    My point is this. Where do you draw the line? Do you give the poor just enough or do you make them middle class or wealthy or what?

    I just can’t wrap my mind around why if you think raising the minimum wage to 9 bucks an hour will help them, why you wouldn’t raise it even higher… especially if, according to your report on this study, it doesn’t affect the economy at all.

  6. Economics aside, somebody mentioned fairness. If we’re seeking fairness (world over, not just US) then all of us should be living below the poverty line.

  7. Justin,

    You don’t know me, but I tend to put annoying comments on your blog. Mainly because your willing to question all sides. I’m revisiting that whole pacifism thing from harvestboston on my new blog. May be intersting.


  8. Statistics are not concrete? Then what is concrete? The human brain’s thought processes?

    Florida is hit by hurricanes every year, as bad as it sounds to say that.

    I think you know minimum wage doesn’t work that way. I think Connor has a good point, we should all be near the poverty line together (not that it would ever happen). The poverty line is based on a standard of living. If everyone’s standard of living increases, then so does the poverty line (it is somewhat discretionary.) Seems like your advocating that everyone should be rich, that you somehow want the world to be magically be fixed. I think even you would know that raising a minimum wage that high would break down the concept, so once again, please don’t use extremes and attempt the devil’s advocate method when you yourself don’t even believe it.

    Where do you draw the line for yourself? Surely you know that the richer you make other people, the poorer you have to become. Money can’t simply be created to make everybody rich (as you imply through your devilish advocating). That’s a convoluted pie-in-the-sky belief. This is essentially a form of wealth-redistribution… by overcoming capitalistic free-market exploitation to assist the people who are exploited. That’s why I suggest you decide for yourself what is best for minimum wage… because it affects you. So go work 40+ hours a week at minimum wage and you decide what you feel would be fair for you.

    Actual historical dollar amounts do your argument no good. It doesn’t matter how much money someone made then versus now. Because of normal inflation, minimum wage buying power is at its lowest level since 1995. (Buying power is simply the ability to by the exact same things over time.) Even since 1997, the minimum wage is equivalent to only 80% of its 1997 level.

    Also, I never said minimum wage hikes don’t affect the economy. Everything affects everything. Specifically in Florida’s case (which is one of the few studies that has been done) the economy was not effected NEGATIVELY (which I said, NO negative effects). In fact, it seemed to have a positive effect (IN THIS SITUATION) by helping grow Florida faster than in years past AND faster than the national average. That doesn’t mean it will always work, or that any amount of increase will always be beneficial. But it tells reasonable, realistic people that generally some increases can be made that will do far more benefit than harm.

  9. Dman, you said two things that are so ignorant that they deserve to be repeated here: 1) “Who’s to say that an unwed mother below age 25 is not deserving of something better than minimum wage.” Dman, no one “deserves” anything. The world is a shitty place. If she can’t read, can’t write, is mean to people, and has no decernable skills….why should anyone pay her anything to do a job? The issue isn’t what people deserve…its how much their labor and talent is worth in a supply-and-demand free market.

    2) “Surely you know that the richer you make other people, the poorer you have to become. Money can’t simply be created to make everybody rich” Dman, are you seriously advocating that there is a static amount of wealth/value? When Toyota releases its financial statements and it shows that people paid them x dollar for their goods, but it only cost Toyota y to provide the services, x-y = money/wealth that was created by Toyota during the year. I agree to some extent that some executives make too much, but paying employees more than they are worth is a recipe for disaster. For a good case study, look at any industry with a union (all union employees by definition are paid more than they are worth…or else they wouldn’t need a union). US airline industry, US car industry, Teamsters. Those people are going to love their above-average-wage job until all those companies go bust.

  10. You can make statistics mean anything you want. People have been doing it for years and years.

    If we should all be near the poverty line, what poverty line should we be near? The American Poverty Line, which is fabulously wealthy compared to the vast majority of the world, or maybe the Hatian poverty line.

    I don’t think Jesus wanted anyone to suffer. He wants us to learn that what we have isn’t ours and we should share with others. But you don’t see Jesus campaigning to Rome for a minimum wage for the poor. He just straight up tells his followers to not forget the poor among you. When we start depending on the government to do the work of the kingdom, we get into some pretty scary areas. Just look at the republichristians today.

    Let me point you in a direction of a study done on poverty that points out that the standard of living for an average poor family is higher than the standard of living was for a middle class family in the seventies.


    Ben pretty much said everything else I was going to say.

    I still wanna know who you are Dman.

  11. Well, since you and Ben are in cohorts… I can address both of you as one…

    In which case, you have opened up a Pandora’s box into your soul and your worldview. I think you have opened up your own ignorance and discrimination by your comments:
    1. You just assumed that every (or the majority of) poor persons can’t read or write. And that they’re mean and stupid. That’s the most ignorant, racist, discriminatory comment I’ve ever heard, and I’m sorry you just agreed with him, Justin.
    2. You also assumed that poor people have no skills, and that every skill requires the ability to read and write. I’ve known people who are not literate and have more skills than you could hold a candle to.

    YES. There is a finite amount of wealth, just as there is a finite amount of energy in the world. In your example of Toyota, the amount of wealth simply transferred (through rising/falling values attached to a market economy). The wealth involved the transfer from consumers to manufacturer. Each part of the exchange (money, car) has an intrinsic value, the additional value transferred by one side is the transition of wealth. Basic economics.

    Jesus doesn’t WANT us to suffer, but he expects us to suffer. Take up your cross (not your happy-go-lucky republichristian hold on the world) and follow him. The cross implies suffering.

    Don’t point me in a study with statistics cited when you just crapped all over the whole idea of statistics (“You can make statistics mean anything you want”). If you’re going to challenge statistics I post, give real, factual criticism of them. Then maybe people will consider your own statistics. (FYI Heritage is known as a very partisan organization with Republican leanings, for what its worth). But I’m not going to respect any of those statistics since you blew over the Florida report and weakly tried to pass it by. I hope you don’t just run an internet search and find statistics that say things that make you feel comfortable as a Christian.

    As far as Jesus going to Rome, that’s a different time and setting. And surely you know that Christ interacts differently with every culture. As it is today, Christians have fallen flat on their faces as a response to Christ’s teachings on social justice. When we start depending on ourselves as Christians, and the church, we tend to leave God out of the picture. He doesn’t like that.

  12. I think you misunderstood the nature of that comment Dman. Ben wasn’t making a statement that all poor people are that way… he’s saying why should someone who is generally a bad worker with no skills get paid as well as someone who is a good worker with good skills?

    Like I said, life isn’t fair, and we should do what we can to help the poor, the uneducated, et al. Bankrupting companies is not the way to go though. My post was merely asking the question what wage is fair. You said 9.06 an hour, to which I say why not 20 an hour. That seems more fair to me. But you and I both know that a 20 dollar an hour minimum wage would cause the opposite affect. Businesses would fire the least productive and least educated workers, many of whom are poor or will be poor shortly since they can’t find a job.

    Actually, I read that study quite a long time ago. I didn’t just run a search to find some info that would prove my point. Its obvious to anyone that’s been to a third world country (have you dman?) that poverty here is wealth in other countries… until our poor are living in cardboard shanties drinking muddy water with one set of clothes and no plumbing, I will wonder why people complain about making 20,000 a year when nearly half the world is living on less than 365 dollars a year. By being born in this country, you are wealthier than nearly 90% of the world.

    Also, in the interest of full disclosure, how much money do you earn? You told me to go get a minimum wage job… I’d actually have a hard time finding one here in nashville because even fast food resturaunts start off at more than minimum wage (typically over 6 an hour) How did that happen without the government to tell them to raise wages????? I don’t know.

    I will agree with you that Christians have not done a good job helping the poor. I won’t say its all our faults though. It mostly goes back to Constantinian Christianity and how the church developed after that. We’re just now starting to realize how much our culture has effected the way we read the bible.

    Your self righteousness is shining through my friend. It is one of the main reasons that I have issue with the social justice/sojourners crowd. Shane Claiborne writes about it in his book. Its this attitude of I’m better than you cause I realize that we need to help the poor and I support the government stealing from people in order to give money to our “poor” in this country. And then you all like to call people racist and bigots and all of the above. Maybe I could respect your viewpoint a little more if you revealed your name and face. As long as you’re anonymous, I’ll consider you a troll. You don’t want honest dialogue… you want to feed your self righteousness by telling me how terrible you think I am.

  13. When talking about wages the question is pretty interesting. Does a 16 year old kid trying to make some ‘fun time’ money at McDonalds deserve the same pay as a father or mother working at McDonalds. I guess its according to how your standards of deserving are developed. Based on what they do then they should make the same. Basing it more on other factors is a legitimate idea but it will take some serious revisioning of economics and society.

    When it comes to the minimum wage debate it is pretty hard to determine what the effect of such change is. Some times it may look like it works and at other times it may look like it doesn’t work. I would also argue that different situations will react to such changes differently so its hard to make any blanket statements based on the real world. There is just too many unforeseen factors and not to mention human actions which are sometimes insane at best.

  14. So now my character is attacked because you would choose to focus on the if/how you know a me rather than the discussion at hand? I DO NOT KNOW YOU, so you don’t know me! I live in Abilene, TX as you have already found out. You apparently live in Tennessee. Neither of us know what each other looks like. Are you supposed to have the privelege of knowing every detail about me simply by my posting on a site that you author? Or can we simply accept the fact that we don’t know each other and are having a discussion about the poor and the Christian’s response to poverty? Does that suffice?

    May I begin to dialogue with you again about the issue at hand rather than changing the subject?

    Ben may not have intended his comments the way I saw them, but I choose to elaborate on the way they come across, so that one can better understand the thoughts they try to convey. That’s what dialogue is… an interaction of thoughts so that people may come to an understanding. His comments (and yours) seem to assume that every poor person has no job skills. Maybe he doesn’t mean it that way, but that’s the way his comments come across.

    “But you and I both know that a 20 dollar an hour minimum wage would cause the opposite affect.” If you don’t see it as a solution, then why propose it? You’re begging the question. Just because a solution works in moderation doesn’t mean it works in extremism.

    Yes, I have traveled to many third-world countries, including 4 African nations. I spent three weeks in one place with no electricity, sleeping on the ground, washing clothes by hand, and praying to God that a rebel army maurauding through the bush did not harm me. I’ve seen abject poverty first-hand. And yes, it is not the same as poverty in the U.S. There are differing standards of living.

    But that does not change the question. What will Christians do for the people around them who are living below them? Do you tell them, “sorry, you had a screwed up family and didn’t have the same opportunities I had — life’s not fair, get over it!”

    I never said I was perfect, and I don’t feel high and mighty over you… I have trouble asking that question too. But we have to ask it!

    Like I said in a previous post about minimum wage… there’s a stigma for businesses who pay it. Businesses avoid the stigma by paying less than a dollar above it so they can salve their consciences that they are not cheating people for their labor.

    That’s why only 3% of people actually earn minimum wage… Most people earn slightly above it.

    Even if Constantine is to blame, it’s our responsibility to fix the situation. We can’t say “it wasn’t my fault” and ignore problems.

    I’m sorry if I offended you, but I’m trying to explain the way your words come off to me. I never called YOU (or Ben) a racist or a bigot, but only the comment made. Once again, only the way the words come across.

    And I’m sorry that you feel the government is stealing from you. Yet God is using the government (as he used the nation of Israel) to bring social justice… Not just to the country, but to the world. You only hear about Bush’s wars, but the government is giving out billions of dollars in aid and development money to address issues of global poverty, healthcare, and AIDS. It’s not just an inward thing, the government is reaching outward to help other nations.

    It just frustrates me when Christians are so adamant about doing everything instead of government. It hasn’t worked, and we’ve got to let God use whatever resources he chooses to. Are we afraid that government will take our sting out of being able to share the gospel if they’re doing all of the social welfare?

    Call me a “troll” all you want for me not sharing my life story with you, but I’m willing to pursue open and honest dialogue…

  15. So I’m gonna assume I’m being ignored now…

    Not sure exactly why…

  16. busy last two days. I want to respond adequately. as you’ve noticed, posting hasn’t been very introspective of late.

    I’m going on vacation. Its possible I might respond in full this weekend. I do want to apologize for attacking your character.

  17. Will respect that… Hope you have a nice vacation and look forward to hearing a response.

  18. Dman, I resent being called ignorant, racist, and discriminatory. Reread my post. I wasn’t saying that my example was typical of the average poor person. I made an extreme example to make a point.

    Also, saying something about economics that is factually untrue, then following it with the words “basic economics” doesn’t make it true. It makes you look ignorant. I was an economics major and I am a CPA. I know basic economics.

    Sir, every time you purchase anything from anyone, the amount of money it takes to make, ship, and sell the product to you is going to be less than the amount you pay for it (assuming the business selling the product is not failing). That difference is called profit, and profit by its very definition is wealth that is created. It is the phenomenon of someone taking something that costs 20, and making it worth 30 to someone else.

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