How much does the average minimum wage worker produce? Is this uniform, lower or higher than what they earn?

Updated on : January 17, 2022 by Adam Patrick



How much does the average minimum wage worker produce? Is this uniform, lower or higher than what they earn?

Your question is interesting and illustrates the minimum wage problem. The first issue is a problem with the "value" for which the currency is traded. Is it offered for the work the person is doing (time) or the results of the work the person is doing (result)? It is a subtle difference; however, they are two completely separate things.

The answer is that the value is subjective and always depends on the points of view, not only of the worker, but of the employer and also of third parties. From the employer's point of view, they simply want to get the most out of the business.

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Your question is interesting and illustrates the minimum wage problem. The first issue is a problem with the "value" for which the currency is traded. Is it offered for the work the person is doing (time) or the results of the work the person is doing (result)? It is a subtle difference; however, they are two completely separate things.

The answer is that the value is subjective and always depends on the points of view, not only of the worker, but of the employer and also of third parties. From the employer's point of view, they simply want to get the most out of the money and look almost entirely at production. From the employee's point of view, they have to determine if the payment for the job is worth the time spent doing it.

We have an employment monopoly dominated by employers, as people need money to survive in our society. Although a person can go out and survive on his own, he cannot prosper in our society without relying on an employer for money, even if he is self-employed and the employer is himself.

The problem is that minimum wage is never worth the time someone invests in it. It is exactly that, at a minimum, what the employer has to pay for your time. However, in practical terms, the minimum wage does not cover the living expenses of the person being paid; So in effect, when you work for minimum wage, you are losing money to your employer. Although the prevailing philosophy is that doing something is better than nothing, this is inaccurate in the larger context.

The reason for this is that the minimum wage is referenced from a zero point. This means that if you don't work, you earn zero dollars. This makes perfect common sense, if it's just a unique employer-employee relationship. In this context, a minimum wage job can be seen as a temporary or short-term situation for the employee or the employer. The employer may simply need to perform a simple task that they don't want to hire advanced skills for, or the employee may simply need some quick cash to move on to something better.

However, when it comes to employer and employee populations, the dynamics change. When you look at the group of all minimum wage workers, you are effectively looking at a group that is losing money and working at a loss. This loss of employees goes into the employer's pockets as profit, assuming the employer's business is operating profitably.

To correct this, wages and salaries should have an alternative, non-zero reference point. Although any benchmark would suffice, the current practice of a minimum wage still uses a benchmark of static zero and simply offsetting this with the positive. The net effect on the population is zero. Although it creates a lower bound for wages that is X dollars higher than zero, it is still referenced to zero and thus simply pushes the entire range of economic values ​​X dollars higher, which actually increases inflation and the value of those dollars would probably decrease. back to zero reference.

What is needed is to change the reference in social terms. For me, the most obvious reference would be to refer to the median salary. At first this would not make sense for the single employee / employer relationship as transitioning from using a static zero reference to a much higher dynamic reference would throw current relationships out of balance. It would be considered economically as employers losing all immediate earnings to employees.

The problem here is not economic, it is the reluctance to social change. Although this change would work, the transition would take time and adaptation; a problem that our society and in particular our representative government is not able to specifically address.

Well, obviously, the amount of value that any worker produces must necessarily be more than he consumes.

Think of it this way: Let's say you run a lawn mowing service yourself. The client is willing to pay you $ 20 profit. To keep things simple, I'm eliminating the cost of the equipment and fuel for the lawn mowers, the repair costs, and everything in between. It is just a profit by providing the service.

So you get $ 20 profit. How much can the employee pay me? Can you pay me $ 25 to do the job?

Well…. no, because you'll be broke, and when you break, I won't have a job

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Well, obviously, the amount of value that any worker produces must necessarily be more than he consumes.

Think of it this way: Let's say you run a lawn mowing service yourself. The client is willing to pay you $ 20 profit. To keep things simple, I'm eliminating the cost of the equipment and fuel for the lawn mowers, the repair costs, and everything in between. It is just a profit by providing the service.

So you get $ 20 profit. How much can the employee pay me? Can you pay me $ 25 to do the job?

Well…. no, because you will be ruined, and when you are ruined, I will no longer have a job.

And he wouldn't even pay me $ 20, because then that means he's working to provide me with a job, and working to run the company, and making zero for it. You wouldn't do that.

Why would you work hard to earn absolutely nothing?

Even if it did, it wouldn't last long. After all, how do you replace your lawn mower when it breaks down, if you don't have the profit to buy a new one? As soon as the clippers break down, the business closes, because you gave all your earnings to the employees and there is no money to replace the clippers.

So the only natural and unavoidable result of any job is that the employee must produce more value than he receives in wages. The minimum wage has nothing to do with it. All employees produce more value than they are paid in salary.

If they didn't…. then they would not be employees. No employee anywhere, except for government or government-contracted work, produces less value than it collects in wages.

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