The Federal Minimum Wage (FMW) is usually not thought of as a mechanism that oppresses the poor. Taking its intended purpose at face value (i.e. help low-skilled workers earn more income) would lead us to think the exact opposite. But that is exactly what the minimum wage accomplishes. It is a man made law that oppresses the poor by cutting off low-skilled workers from getting an entry-level job. In essence, a minimum wage is a price floor intended to regulate how low hourly workers are allowed to sell their labor.
President Franklin Roosevelt’s Fair Labor Standards Act of 1939 first set the FMW at twenty-five cents per hour, has currently climbed to $7.25 per hour, and the most recent push by the 2020 Biden campaign is $15 an hour.[1] At this point God’s law and man’s are at odds. God’s word teaches that all men were endowed with the right to work (Gen 1:28) and receive payment for the labor they do for others (Lev 19:13; Deut 24:15; Matt 10:10; Luke 10:7; 1 Tim 5:18). Any man made law that prohibits two individuals from making a mutual agreement in trading labor for wages is unjust and has negative consequences.
PRICE OF LABOR IS NOT REGULATED UNDER GOD’S LAW
God has commanded not to add or subtract from his word, in order that his laws may be kept (Deut 4:2; 12:32). Applying this principle to civil government, we can deduce that whatever functions God has mandated governments with are restricted to only what is revealed in His word. State legislatures do not have permission from God to make up any laws they want and expect God to approve of them. Nowhere in Scripture do we see God ever command the state to regulate the price of labor. Therefore, minimum wage laws should not exist. To establish such a law would be to disobey God’s command not to add to his word.
Paul reaffirms God’s specific blue-print for the function of civil governments in the book of Romans; limiting their responsibility to “an avenger who carries out God’s wrath on the wrongdoer” (13:4). Carrying out God’s justice on criminal behavior is the sole responsibility of civil rulers—not welfare/healthcare, not disaster relief, not economic planning, not education, and certainly not regulating the price of labor. States have an inclination to step into areas of life where they are not authorized by God to do so. Case in point—the price of labor.
MINIMUM WAGE IS IN OPPOSITION TO PROPERTY RIGHTS
Not only are minimum wage laws unauthorized in God’s word, they are in head-on collision with the property rights that are established and protected by God’s law. This is because individual’s own their labor. The moral basis for property rights is found in the biblical teaching that God, first and foremost, owns everything (Deut 10:14; Psa 24:1) and as creatures who bear His image, we also own things, according to what He has delegated to us as personal property (Gen 1:26-28).
Put plainly, if God says we own something… we own it! No one can say that what God has given to someone isn’t really theirs. Those who act upon this disagreement by taking ownership away from others commits what God calls “THEFT,” hence the commandment, “Thou shalt not steal” (Exo 20:15).
The minimum wage law is, in essence, theft by taking away full control over the business owner’s money and the worker’s labor. It ultimately says to the business owner, “you do not have full ownership of your money, nor the freedom to trade it at any rate you wish for labor.” Similarly, it says to the worker, “you do not have full ownership of your labor, and you are not allowed to sell it for any rate you agree to, but only at a minimum price that we determined for you.”
Even if both parties agree to an hourly rate for work that is less than what the minimum wage law requires, Federal law prohibits both parties from carrying through with their agreement. If one does not have full control over what is rightfully theirs then they don’t really own it at all, thus, two things are being robbed by the minimum wage law: the employer’s right to their money and the employee’s right to their labor.
Minimum wage is a concept devised from a place of covetousness, envy, and greed. A fitting illustration of this is found in the twentieth chapter of Matthew where Jesus tells a parable about a landowner who, one morning, employs workers to cultivate his vineyard. He initially hires a crew to work for a whole day in his field for a denarius (approximately one day’s wage). As the land owner went out around nine a.m., he found others to work in his vineyard and promised to pay them a fair wage. He does the same with others at noon, three o’ clock, and five o’ clock.
Finally, when evening came he called everyone whom he had hired to work in his vineyard to receive their wages beginning with the last hired to the first. Each worker received a denarius and was satisfied with their pay, but when it was the first crew’s turn to be paid, they expected more money because they had worked harder and longer than everyone else. They began to complain and grumbled to the landowner. His response to their grievance is profound:
Friend, I am doing you no wrong. Did you not agree with me for a denarius? Take what is yours and go your way. I wish to give to this last man the same as to you. Is it not lawful for me to do what I wish with my own things? Or is your eye evil because I am good? (Matt 20:13-15, emphasis added).
On what basis is the landowner defending his action? – on the righteous law-word of God. Under God’s precepts, the landowner was free to do with his money as he pleased. He could have given as much or as little as he wanted in exchange for labor, provided the worker agrees to the price. For this reason, the landowner could unashamedly ask the rhetorical question: “Is it not lawful for me to do what I wish with my own things?”
This is exactly what Peter told Ananias and Sapphira (Acts 5:4). This couple lied about the proportion of money they gave from the land that they sold, and part of Peter’s grievance with what they did was the fact that private ownership of their land and money left the dishonest couple with no excuse to lie to the Holy Spirit and to God. Their lie was absurd to Peter for the reason that they were free to give as much or as little as they wanted because they owned their land, and after they sold it, were free to distribute the proceeds as they wished.
Proper exegesis requires that we acknowledge that the parable of the workers in the vineyard is, first and foremost, teaching that God has freedom to bestow grace among the workers of His kingdom however He pleases. But parables (or parabolē – a placing of one thing by the side of another) contain deep and spiritual truths that are to be understood alongside earthly principles. The earthly principle in this story is that the landowner had the right (according to God’s law) to give generously with his own money as he pleased, much like how God freely distributes His grace.
NEGATIVE CONSEQUENCES OF THE MINIMUM WAGE
As with all of God’s commands, societies face serious consequences for breaking them. When the minimum wage is raised significantly enough, the employer is usually faced with a toss up decision between an increase in either price or unemployment. Since many firms have razor sharp profit margins, employers are inclined to raise the price of the goods or services they provide in order to make up for the extra amount of money they have to pay their employees. This usually doesn’t work out for the firm because the higher prices turn away previous customers and the firm ends up reducing output in order to avoid a surplus.
The other route the employers are more likely to take is to lay-off some of their employees because they can’t afford to pay the new minimum wage. This increases unemployment and locks out low-skilled workers from ever getting a job. If the minimum wage is increased high enough, both employers and workers might feel the only way they can make ends meet is to break the law and agree on a wage that is below the federal minimum wage, creating an illegal black market for hourly workers.
Sometimes large firms use the minimum wage as a way to drive out their smaller competitors. Knowing that small “mom and pop” shops can’t afford to raise their worker’s wages, firms who already pay their employees much higher will lobby for a minimum wage increase so that their smaller competitors will have to close up shop and lay-off their employees.
For a policy that intends to help low-skilled workers only results in higher prices, unemployment, criminalizing voluntary labor, and crony capitalism. So much for the idea that minimum wage helps the poor.
OBJECTIONS RAISED
When these issues are brought up, we often hear progressives respond with the argument, “Well, if we didn’t have a minimum wage, employers would lower their workers’ pay to slave earnings.” But if we look back in history before the minimum wage, we see that this claim is simply not true. In order to hire and keep reliable workers, entrepreneurs during the industrial revolution paid their employees well in order to avoid employee turnover, which is more costly. John D. Rockefeller is a good example of offering fair wages as Thomas J. DiLorenzo describes in his book How Capitalism Saved America. He says,
Rockefeller was extremely generous with his employees, usually paying them significantly more than the competition did. Consequently, he was rarely slowed down by strikes or labor disputes. He also believed in rewarding his most innovative managers with bonuses and paid time off if they came up with good ideas for productivity improvements, a simple lesson that many modern corporations seem never to have learned.[2]
Another argument we might hear is, “Studies show that increases in the minimum wage does not raise unemployment by much” (notice the admission— “by much”). This claim is true, however, it is very misleading. You can bet that the studies they cite do not take into account the local cost of living. Studies that do account for this measure show that places with a low cost of living are hit pretty hard with unemployment when the minimum wage increases.[3]
They also don’t take into account states which already have an excessively high minimum wage of their own. As of 2019, states such as California, Massachusetts, and Washington have a state minimum wage of $12.00 an hour, and of course D.C. is at $14.00.[4] Some of these are increasing this year (2020). A federal minimum wage increase wouldn’t affect these states, yet they are counted along with the others. This is a clever tactic used to deceive people into thinking that the minimum wage doesn’t affect unemployment much, but a tactic, nonetheless. When states without a state minimum wage are counted separately (as an honest researcher would do) we find that they are affected the worst with unemployment.
Putting these two fallacies aside, we aren’t talking about a measly four or five percent increase. The latest talk for both the 2016 and 2020 presidential campaign was $15.00 an hour…That’s a 107% increase! We might let minimum wage advocates get away with the “unemployment-doesn’t-go-up-much” line when we’re dealing with a four or five percent increase, but it is unarguably inevitable that a 107% increase would be detrimental to the labor force.
The Heritage Foundation constructed a simulation model that predicts the effects a $15 dollar minimum wage would have on fast food industries. Profits would be reduced by 77%, sales by 36%, hours worked by 36%, and prices would rise by 38%.[5]
APPLICATION
R.J. Rushdoony tells us of an early church practice that is directly relevant to the minimum wage. He says in an interview,
Consider what Paul was doing: offering to alleviate the poverty of the saints during the famine in Palestine; counseling that the needy be cared for, but “He who will not work, let him not eat” (2 Thessalonians 3:10). We do know that anyone who became unemployed was given three days income. After that they found work for him. Another Christian would hire him, but at lower than his normal pay so there would be no incentive to stay under that diaconal care.[6]
This charitable practice would have been nearly impossible had the early Christians dealt with the strict minimum wage laws we have today. There are some exceptions to having to abide by the minimum wage, but it is an inconvenience to find these loopholes. The tragedy is that charitable organizations and businesses that hire individuals with the lowest skill-sets are the only ones proven to have helped such people in unfortunate circumstances. They higher them at low wages to give them a chance to accumulate skills so that they may be more productive in the future to earn higher pay. But this process is largely killed by the minimum wage.
Getting rid of the minimum wage so that liberty in the labor market can be restored is the ultimate goal, but simply repealing the Federal Minimum Wage is not good enough. If change is to be efficacious, it must come from the bottom-up. We need to renew our own minds first. How do we do that?
Workers: be content with your wages (Luke 3:14). Know that God has placed you in your vocational job for a reason. Instead of complaining about your pay (or worse, calling on the coercive power of government to force your employer to pay more) ask God that He give you both the willingness and ability to please your employer in the work that you do. If you serve your employer as a faithful believer, don’t be surprised if he notices the image of Christ in you and increases your pay to keep you around.
Employers: Pay your workers fairly and on time (Lev 19:13; Deut 24:15; Jer 22:13; James 5:4). There is nothing wrong with maximizing profit, but don’t attempt to do so at the expense of your employee’s dignity and worth. If you treat your employees well, word will get out and you are bound to attract more competent and higher skilled workers.
Once we submit to God’s standards for how labor ought to be conducted under Christ’s authority, only then can we see clearly to speak prophetically to the societal sin of labor oppression and how God feels about it much like the prophet Malachi did:
Then I will draw near to you for judgment … against those who oppress the hired worker in his wages, the widow and the fatherless, against those who thrust aside the sojourner, and do not fear me, says the LORD of hosts (Mal 3:5, emphasis added).
References:
[1] “THE BIDEN PLAN FOR STRENGTHENING WORKER ORGANIZING, COLLECTIVE BARGAINING, AND UNIONS.” Joe Biden for President, December 20, 2019. https://joebiden.com
[2] DiLorenzo, Thomas J. How Capitalism Saved America: the Untold History of Our Country, from the Pilgrims to the Present. New York: Three Rivers Press, 2005.
[3] Brunt, Christopher S., and Anthony G. Barilla. “An Evaluation of the Relationship between Minimum Wage and Unemployment: Does the Local Cost-of-Living Matter?” Applied Economics Letters 25, no. 7 (2017): 493–98.
[4] “Minimum Wage By State In 2020.” Paycor, March 13, 2020. www.paycor.com
[5] Sherk, James. “Higher Fast-Food Wages: Higher Fast-Food Prices.” The Heritage Foundation, September 4, 2014. https://www.heritage.org/jobs-and-labor/report/higher-fast-food-wages-higher-fast-food-prices.
[6] Rogers, Jay, ed. “AN INTERVIEW WITH R.J. RUSHDOONY.” Second American Revolution: Rousas John Rushdoony. Forerunner.com. Accessed May 16, 2020.
I live near Colorado Springs and due to extreme greed, rent is so outrageous that unskilled workers are bunking together (average 3 workers to one bedroom apartment) and food costs are outrageous along with gasoline and utilities. personally, my husband and I are in our early 60s and own a 35 acre farm where we grow our own organic food and we are in zero debt. I am disabled from an accident and my husband is the only person working in our home and he makes about double of minimum wage. We can barely afford to feed 20 chickens, three dogs and two cats and ourselves. There is no way in this world we could afford full coverage insurance for a vehicle. 40 years ago, when we were young unskilled workers, if both worked full-time we could afford a small two bedroom house and at least one car payment, full coverage insurance, and still have a cheap vacation once per year. Right now young people that are unskilled workers are living at least two families in a three-bedroom house and can barely afford to eat because real estate prices are so outrageous, and this is the evil greed of those who own the land and housing. We have seen illegal aliens coming up from Mexico for the last 30 years and living three families with children in three-bedroom houses because they are paid very little, and who are they really going to complain to? They are paid very little by extremely wealthy employers and it is extremely common for a father, mother and two children to inhabit one bedroom in a house where multiple families are living in the other bedrooms. meanwhile, those who invested in real estate 30 or 40 years ago and who were common working people back then and invested in real estate before greed became the pandemic disease in our country, have become multi millionaires based on extremely overpriced rental housing. We have an enormous homeless population problem in Colorado just like they do in California where a one bedroom apartment cost more than half a year‘s wages for someone to rent. Greed is not a sin according to most Christians and those who hate God. When my husband and I bought the 35 acres that we live on now, a friend of ours handed us cash money from his safe and we purchased the property and gave him back the exact amount of money that he has lent us . There was no Usery. God has blessed this man abundantly and we were able to purchase the land by trading commodities so that the government could not tax the situation and all parties were extremely happy. My husband and I purchased a 40 year old mobile home and had it moved to the property and completely rebuilt the entire house to be like a normal home one room at a time for nine years with her own hands and all new materials. We even placed Anderson windows in the house and a beautiful new roof that we did by ourselves. The realtor who recently looked at our $600 house, told us that she could get at least $200,000 within 24 hours for our 35 acres (we paid 17,500 for the raw land) with our beautifully rebuilt home sitting on it that is completely off grid and self sustaining. All of it was done with our own two hands and by working a job that paid just belief the Standard Deduction wages. In the city of Colorado Springs right now, a 70 year old, 1400 square-foot dated tract home with three small bedrooms and no garage sells for $250,000. Greed that there is no words to describe. totally disgusting. No wonder so many white families that are working people have decided not to have children anymore and families of other races whom the government gives endless entitlements and handouts to, including section 8 paid housing, are breeding like rabbits. For several years, my husband and I did handyman work and cleaning of rental properties for several realtors that were property managers. You would not believe what we have seen. Our state has turned into a complete communist state and we are strongly considering selling our property and moving into states where there are people that would actually be willing to rise up and engage in a war to stop communists from taking over their area. What we are seeing in our country right now is the direct result of a huge population who embraces man’s law and hates God‘s law. How many times have I heard Christians say out of their mouth, “boy I’m sure glad we don’t have to live by that old gods law anymore.“ As if they prefer 50 million satanically sacrificed babies in abortion clinics, fraudulent elections, extreme and excessive taxation on every level, working people with integrity being reduced down to practically living in a ditch because they can’t afford a house to live in while foreigners have taken over the government and are ruling over us just like the Bible promised would happen and financially providing wonderfully for people who are too lazy to learn or work hard. Maybe we should be a little less concerned with billionaires like the Walton family of Walmart fame having to pay minimum wage, Which is not even a livable wage in most areas and still requires numerous families to live in a single home, and be far more concerned with greed and all of the lies that the government tells to get millions of people killed in wars that are unnecessary, but that profit the banking industry and the weapons manufactures in uncounted billions in profits, and make greed and murder a shameful thing. Lastly, in Colorado currently, minimum wage is about $13 per hour. An old, ratty one bedroom apartment is $1400 per month. try to make $13 per hour and save up enough money while living in your car to pay a deposit equal to one months rent, first and last months rent, and that would be a total of $4200, then pay a deposit at the utility company so that your utilities can be turned on and then you can move into a one bedroom apartment. Most employers are not allowing more than 34 hours per week in retail because then they don’t have to offer any healthcare benefits which takes about 20% of the paycheck every payday. 40 years ago I worked for a elderly couple that owned the three stores in three different cities in Oklahoma. These were hardware stores. The couple lived in a four bedroom house with a double car garage not a four-story mansion with nine bedrooms and six bathrooms and a six car garage full of classic and antique automobiles while paying employees the bare minimum they could get away with -oh, and they paid for all of their employees and spouses every year to go on a one week vacation in Hawaii or Cancun or several other places. Once again, greed is the problem in our country not minimum wage.
Hey Laura, I’m sad to hear about your situation, and how expensive it is to live there. If I were in your place, I would go to Latin America. I live in Argentina, and with just 100.000 you can buy a nice 100.000 USD house, and use the rest wisely to live peacefully. You can live pretty well with your husband at 500 USD per month.