Growing up in Northern California circa 1984, my first actual job paid $3.35 an hour – California minimum wage at the time. I remember getting that job, it was through a low-income government program designed to help young adults get a start in the job market and to teach them good work ethics; that program was from the PIC – Private Industry Council. I was a 16-year old kid who had just started my Junior year of high school, and I lived with my dad in a long-term welfare home; we had been on welfare for 4 years, and it would take dad another ten to get himself free of the system. Times were tough, we scrimped on a lot of things, we shopped thrift stores, we bought day-old bread and ate a LOT of beans; but we survived.
In 1984, a McDonald’s meal cost $2.99; approximately 89% of an hour of gross minimum wage. In 1984 California, a gallon of gas cost $1.13; approximately 34% of an hour of gross minimum wage – 3 gallons of gas per hour of work. Today in 2015, a McDonald’s meal cost $5.99; approximately 66% of the present California minimum wage of $9.00 an hour (a drop of 23%, most likely due to volume economics). Today in 2015, a California gallon of gas cost $2.95 per gallon; approximately 33% of an hour of gross minimum wage – 3 gallons of gas per hour of work.
So, using this data, let us see into the future of a world with a $15 an hour minimum wage.
- McDonald’s meal at a 66% ratio: $9.90
- Gallon of gas at a 33% ratio: $4.95 – we remember that rate a few years back.
Now, let us take the ratio of present federal minimum wage of $7.25 per hour, 48% of the magical $15 per hour. At a 52% increase across the board, here is what the world of a $15 minimum wage will look like:
- McDonald’s meal: $9.10
- Gallon of gas: $4.48
- Discount Supermarket boneless chuck roast – price per pound, raw, you cook: $9.50 per pound
- 12-Pack of Coke: $8.04
Now what you do not see here is the inevitable – if I have 15 full-time employees presently making $10 per hour, that works out to a rough (very rough since I do not have benefits or taxes included) yearly payroll rate of $307,500. Now, if I am forced to go to $15 an hour, but can only afford to pay $307,500 yearly payroll, I can only employ 10 full-time employees. But wait, I NEED 15 workers to be able to make enough profit to stay in business; how am I going to operate with 10 workers, or how am I going to be able to increase payroll an additional $153,750 a year? The only way to stay in business would be to cut benefits or increase my sale price to make-up the difference. Let us look at both scenarios:
- Cut worker’s benefits: To cut benefits, I will have to cut the worker’s hours low enough to where I am not required to pay benefits. If I cut hours, I will have to run two shifts; I will therefore hire 7 more people but cut everyone to 20 hours per week. How does that work out for a former employee who used to work a 40 hour week at $10 per hour – they will go from a $20,800 per year job with benefits to a $15,600 per year job without benefits.
- Raise prices: If I try and keep my 15 full-time employees on and make up the $150k+ new payroll cost by raising my prices, I will be contending with not only market demand and impact on my customer base with the new costs, but I will be dealing with all of the other suppliers out there who are having to do the same thing – raising prices. If I am presently buying a widget for $.10, adding it to a thingy that costs $.15, and it takes my worker 10 minutes to combine them at a cost of $1.67 in wages for a total cost of $1.92 for the new widgie, and I sell it for $2.50 so that I have a rough profit of $.58 (or 23%) per widgie; what happens when the widget goes up to $.15, the thingy goes to $.20, and my workers cost goes to $2.50 and I still need to make my 23% rough profit (to cover worker’s comp, electrical, rent, repairs, etc.)? Let us look: ($2.50+.15+.20)+23%=$3.51 per widgie; each widgie now costs a dollar more.
So, which scenario do you see working – cut worker’s hours and benefits but hire more to keep the production up; or charge a dollar more per widgie? As a consumer, would you pay 29% more for an item? For a basic item that goes from $2.50 to $3.50, you might; but what about that item that goes from $2500 to $3500? Or, do you think the unseen option will be taken? The option where the company takes their production overseas where they can afford to make and ship the widgie for the $1.92 and still sell it for $2.50.
In my humble opinion, a $15 an hour minimum wage expectation shows the heart of the American people; people want more, it doesn’t matter what they want more of, they just want more. The American people are materialistic, plain and simple. We claim to be a Christian country, yet we do not follow the basic biblical rules:
- Matthew 6:24: No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.
- Matthew 19:21-26: Jesus answered, “If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me.” When the young man heard this, he went away sad, because he had great wealth. Then Jesus said to his disciples, “I tell you the truth, it is hard for a rich man to enter the kingdom of heaven. Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.” When the disciples heard this, they were greatly astonished and asked, “Who then can be saved?” Jesus looked at them and said, “With man this is impossible, but with God all things are possible.” Peter answered him, “We have left everything to follow you! What then will there be for us?” Jesus said to them, “I tell you the truth, at the renewal of all things, when the Son of Man sits on his glorious throne, you who have followed me will also sit on twelve thrones, judging the twelve tribes of Israel. And everyone who has left houses or brothers or sisters or father or mother or children or fields for my sake will receive a hundred times as much and will inherit eternal life. But many who are first will be last, and many who are last will be first.
- We must get rid of our strongholds. For the rich man, his stronghold was his riches. For a drunkard, his stronghold is the alcohol. For a bungee-jumper, their stronghold is the adrenaline. Money is not bad, alcohol is not bad, bungee-jumping is not bad – these are only bad when they take the place of serving the Lord; glorify the Lord with your riches, do not allow the drink to rule you, do not let the adrenaline rule you.
- Mark 4:19 but the worries of this life, the deceitfulness of wealth and the desires for other things come in and choke the word, making it unfruitful.
- The pursuit of wealth is a demon that will make a godly man do ungodly things; keep yourself in biblical check.
- Proverbs 23:4-5 Do not wear yourself out to get rich; do not trust your own cleverness. Cast but a glance at riches, and they are gone, for they will surely sprout wings and fly off to the sky like an eagle.
- Proverbs 11:28 He who trusts in his riches will fall, but the righteous shall flourish as the green leaf.
- Material riches can be gone in the blink of an eye; spiritual riches are eternal.
- Luke 16:14 The Pharisees, who loved money, heard all this and were sneering at Jesus He said to them, “You are the ones who justify yourselves in the eyes of others, but God knows your hearts. What people value highly is detestable in God’s sight.”
- What do you value the most? Do you pray daily, do you pray more than you go onto Facebook, do you pray for your loved ones, do you pray to give thanks as much as you pray to get something?
- There are many more bible verses about money and greed, but I will use this one as a final, “Thou shall not have another god before me”:
- When we want more stuff and do not have time for God, the stuff becomes are new god and we put God on the back burner. When you put God on the back burner, you become lukewarm and will be spewed out like vomit when you come before the Lord.
So, my thoughts on the proposed $15 per hour minimum wage:
- It is unbiblical because it focuses on monetary wealth instead of spiritual wealth.
- It is unfeasible because once you raise the wage to $15 an hour, you have now raised the poverty level while devaluing the dollar further.
- It will cause small businesses to close, and big businesses to move overseas.
- It will cause the cost of living and unemployment rates to skyrocket to the point of economic collapse.
Give yourself to the Lord, follow the Lord’s teaching’s, follow the word of the Lord, pray without ceasing, be content with what you have and thank the Lord for everything.