Why $15 minimum wage is bad policy, has no biblical support
The recent COVID-19 bill that was signed into law originally had a provision to raise the federal minimum wage to $15. That provision was removed and any such attempts to increase minimum wage appear to have died in Congress, for now. That’s the good news.
The not-so-good-news is where the support for raising minimum wage to $15 is coming from. As a talking point on the campaign trail for many liberal politicians, it is no surprise that a push from the left has moved the issue into the national spotlight. What is a bit surprising is the support from self-described evangelical Christians for the $15 an hour proposal.
Is a federal minimum wage biblical?
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The argument that not paying people a “living wage” is immoral and, therefore, unbiblical, is prevalent in discussions with Christians on this topic. But, before we can label something immoral and tie it to a biblical mandate, we must first answer the question about what a “living wage” is and where it should be applied.
When we consider the idea of a living wage, we must admit that the figure is different depending on which part of the country a person lives. A single person living in Los Angeles or New York City, or even many parts of Maryland, will require a higher “living wage” than someone residing in rural Kentucky or the hills of West Virginia. This creates a problem for the federal government in establishing a federal minimum wage because $15 an hour may represent a solid income in rural parts of the country; but the same $15 will keep someone in L.A. and New York City in poverty.
In my recent conversations on the topic, it was suggested that if the federal government is going to impose a minimum wage, it should include a sliding scale for part-time, full-time, seasonal; and considerations for locality should be taken into consideration. But whether this is biblical or not is another matter altogether.
In Matthew chapter 20, Jesus told the story of a vineyard owner that hired laborers to work in his vineyard for the day. The first workers agreed to work the entire day for a denarius, which is equivalent to “a day’s wage.”[1] The owner then goes out several times during the day and continues to hire more laborers to work in his vineyard. At the end of the day, the owner pays each worker the same amount, a denarius. But the workers that started working at the first hour were annoyed that they were paid the same as the workers that began working just one hour before the end of the day.
That’s where we read these words from the owner of the vineyard to the complaining workers: “Am I not allowed to do what I choose with what belongs to me? Or do you begrudge my generosity?” (Matt. 20:15)
Jesus appears to be making the case for business owners having the freedom to determine what they will pay, and workers having the freedom to enter employment contracts with employers without the input or interference of any outside entities. This would, on the surface, give the impression that there is no biblical mandate for a federal minimum wage and that the true minimum wage is actually $0.
Reason to oppose a federal minimum wage entirely.
1 – A federal minimum wage will price younger workers out of the workforce. As one anxious mother told me recently, she is concerned that her teenage kids will not be able to find jobs because employers will seek higher qualified employees. She’s right. Raising the minimum wage will force small businesses to choose between more qualified workers. The result will be that younger workers with less qualifications will be priced out of the market. Minorities will be particularly hard hit by this reality.
2 – Inflation will undoubtedly follow. If the minimum wage is increased, businesses will be forced to pass some of that higher cost on to their customers. This will result in a higher cost for goods and services. The end result will be that those with the new $15 minimum wage will not be economically better than they were before. It will simply cost more to buy necessities (food and gas) and the discretionary items (vacations and clothing) that people wanted to spend money on in the first place.
3 – Big businesses will thrive while small businesses will suffer. Consider what happened during the pandemic in 2020: big businesses adapted and thrived while small businesses suffered (some from state mandate shutdowns, some from a simple lack of business). Now imagine that on a larger scale. Will Amazon and Wal-Mart really suffer from a raise in wages? Nope. But the mom-and-pop shop down the road may close because they simply can’t compete with the big box stores.
4 – Businesses will turn to automation. Technology continues to change the landscape of business nationwide. Raising the minimum wage will not just increase that, it will proliferate it. The result of that will be a loss of jobs for many of the lower income employees. Where some once had a $9 an hour job, they will now have no job at all. Reminding everyone that the true minimum wage will always be $0. Employers should be free to enter into employment contracts with people that are willing to work for the advertised wage. If I want to hire someone for $8 an hour, the government should not tell me, and the worker willing to accept the job, that we can’t make such an agreement. This stifles competition and allows big businesses to thrive, and small businesses that can’t compete will suffer.
5 – Minimum wage jobs are not supposed to be careers. Many people forget that minimum wage jobs are mainly supposed to be entry level. They are an entrance to the work force. And yes, while many choose to keep a minimum wage job long term for personal reasons (second job, flexibility, etc.), it should not be expected to be a career. People should be encouraged to seek skills that the market pays for and develop those skills to secure jobs that pay better than minimum wage. The last thing an economy needs is for adults to keep the jobs intended for younger workers entering the workforce.
6 – Raising the minimum wage to $15 will reduce income for people already making $15 an hour. If minimum wage is increased, inflation on goods and services will follow. The result will be that an entire group of people that were already making $15 will, effectively, have their purchasing power reduced and experience a de facto reduction of income. The logical result will be the outcry of this group demanding a raise beyond $15 an hour. Where exactly does this death spiral stop?
The reality is that not all jobs are created equal. Some are meant to be entry level and pay less. They are also meant to be temporary.
While the Bible says a lot about stewardship and money, it doesn’t give any specific, explicit mandate related to minimum wage. This leaves us with the liberty to be good stewards, and generous employers. The federal government would do well to stay out of this discussion and allow the marketplace to function without interference.
[1] The definition of “a day’s wage” may mean different things in biblical times depending on region. Assuming that the term “a day’s wage” is equivalent with today’s “living wage” is not appropriate.
Nathan Cherry is a financial advisor specializing in personal financial management and debt reduction. After more than a decade in church ministry, Nathan found a place for his talents in money management in the financial services industry working for a respected financial planning firm. Nathan also writes on social and moral issues at www.nathancherry.com.
