How much should the minimum wage be these days?

Debates over mandatory hourly work rates have been raging since 1912, when the state of Massachusetts was the first to enact and implement the initial minimum wage.

Other states followed suit – only to see the United States Supreme Court strike the laws down in 1923. A majority of the justices ruled such legislation violated the due process clause of the Fifth Amendment, curtailing both the employer and employee’s liberty of contract.

The High Court suggested that if the government could mandate a minimum wage, they could also arbitrarily cap salaries. They weren’t wrong.

Less than a decade later, though, appetite and interest to revisit the issue came roaring back with the onset of the Great Depression. New Deal policies including the “National Industrial Recovery Act,” along with the “President’s Reemployment Agreement” forced wages higher. By 1937, the Supreme Court upheld the legality of a minimum wage in a case involving a hotel chambermaid in California.

The Fair Labor Standards Act of 1938 ushered in the first federal minimum wage at 25 cents per hour. The current federal minimum wage is $7.25 per hour, a figure last adjusted in 2009. State rates vary widely, beginning with the $7.25 per hour in several states to $16 in California and $17 in Washington, D.C.

Calls to raise the minimum to a “livable wage” have been increasing and intensifying, with some even suggesting it be raised to $50 per hour. Justification for the higher rates always emphasize supposed reality and affordability of everyday life.

There’s no doubt everything is more expensive these days. Reports from Las Vegas at Sunday’s Super Bowl highlighted $60 nachos. It seems if you can pay $9,000 for a ticket, concession owners think what’s another $60 for some chips, cheese, and guacamole.

Yet, at the heart of these suggestions about a $50 minimum wage often lies a fundamental misunderstanding of the nature of work and financial compensation.

Truth be told, in a capitalist economy, people aren’t truly paid for the time they work. Instead, they’re paid for the value they bring to a business, organization, or individual. If it was all about time, people would all be paid the same – a feature of socialist structures that decrease or all together eliminate incentive and routinely suppress creativity and ingenuity.

Lost in the minimum wage debate is often the fact that the whole premise for the pay scale is the escalating nature of it. It’s called “minimum wage” for a reason. It’s the first rung on a ladder. Assuming every wage needs to be “livable” belies reality. Most minimum wage earners are young people just starting out, often living with family or roommates.

Those advocating for exponentially higher minimum wage rate hikes seem blind to the fact that doing so actually hurts workers in the long run because it results in fewer jobs overall. Most small business owners operate on incredibly thin margins and can’t absorb huge spikes in wages. Additionally, big jumps in the minimum wage are passed on to the consumer. It won’t surprise anyone to recognize the fact that every worker is also a consumer. In other words, increases in the minimum wage are simply used to pay the higher prices we’re all paying. In many cases, it’s both a vicious cycle and an overall net negative.

As Christians, God’s Word provides ample insight and perspective on fairness and employment compensation.

The apostle Paul writes that as employees, we’re to earn our keep, noting “if any would not work, neither should he eat” (2 Thess. 3:10). Paul also urges personal responsibility when it comes to caring for our relatives, ostensibly with wages honestly earned. “But if any provide not for his own, and especially for those of his own house, he hath denied the faith, and is worse than an infidel” (1 Tim. 5:8). At the same time, Paul is clear that “The laborer deserves his wages” (1 Tim. 5:18).

Whether starting out as a minimum wage employee or shepherding a company or organization at its top in the C-suite, Paul’s words to the Colossians apply and serve as good guidance for us all:

“Whatever you do, work heartily, as for the Lord and not for men, knowing that from the Lord you will receive the inheritance as your reward. You are serving the Lord Christ” (3:23-24).


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