Some thoughts on ‘minimum’ wage…

Why is it that most of my fellow Christian conservatives will cry doom and gloom over the idea of people being paid a living wage, but don’t have a cross word to say about CEOs being paid 750x as much as their AVERAGE employee (never mind the entry level ones), or about how they’ll lay off thousands of people, then pay themselves a bonus equal to the combined salaries of those people? My Bible still declares the wrath of God against those who oppress the hireling in his wages.

If, for example, a man does work for me that brings me a $500 profit in a day, why should I pay him $8 an hour? The issue is not whether the law gives me permission to pay people so poorly. The real issue at hand is the value of the work being done.

I remember back in 1998, I helped to build a brick walkway in a day. The owner of the landscaping company charged about $3000 for it. The designer got $500, insurance costs were about $20 for the day, while materials and other costs came out to about $300. The labor cost? $7 an hour for me, and $9 an hour for the more experienced guy working with me. $128 for labor. Add in government-related costs, and you’re still looking at about a $1700 profit. Had he paid us a little better, he’d still be making big bucks. Would his business have collapsed if he’d paid his people even $2 more per hour? Doing so would have cost him 1% of hisĀ profit.

Now, there are scenarios in which the profit margin isn’t quite so broad. However, the truth is that for many small businesses there are many ways in which operations could be streamlined so that they could afford to pay their people a living wage. Costco, for example, pays its employees significantly better than other retail giants. However, their board room features folding tables, and their upper management chooses to build genuine shareholder value instead of lining their own pockets. They’re still very well paid. With a salary of over $700,000, their CEO is definitely not poor.

The heart of the problem, then is not greed or a ‘sense of entitlement’ among workers, but rather greed and a sense of entitlement among many of those who are running businesses, who have convinced themselves that they somehow deserve to be lavishly compensated while paying workers so little that they qualify for Food Stamps. Some will argue that an executive’s responsibility is to the shareholders, and that he must maximize profit, but these arguments always ignore the outrageous compensation culture that exists in western upper corporate management, which, oddly enough, does impact profits. While certain financial industry companies were declaring bankruptcy and getting government bailouts, they were still paying out absurd bonuses to executives who’d just finished running those companies into the ground.

Saints, we can do better than this.