I Timothy 5:18, states, “The worker deserves his wages.”  Five fiscal policies harm the poor by denying fair wages: Inflation, minimum wage, unemployment benefits, favoring unions, and licensing requirements. 

 I’m from the government, and I’m here to help.  That sarcastic anecdote serves as an introduction to today’s podcast.  Because where the government is supposed to help the poor, there are five ways in which it HARMS the poor. All five violate the scriptural command found in 1st Timothy 5:18, which states, “The worker deserves his wages.”  In the Amplified Bible, there is an additional comment, “He deserves fair compensation.”  The scripture is repeated from Leviticus and Deuteronomy. 

 

Inflation

When the government has a fiscal policy of spending more money than it’s taking in, the Fed is forced to adopt a monetary policy of printing more dollars to cover the debt.  This is called “monetizing the debt.”  When you increase the supply of money, each dollar is worth less, and that’s called inflation.

Inflation harms the poor more than the rich.  You would think that inflation harms those who HAVE more dollars, but the rich have financial advisors who move their assets into investments that rise along with inflation, so they are not hurt.  Also, the rich can delay the purchase of big cars and yachts, and vacations, while the poor must buy milk and diapers on the daily market. 

So government-induced inflation violates the fair compensation command from I Timothy.  The worker is paid in deflated dollars that don’t buy what’s fair for the recipient.  Think about it: When any government representative or bureaucrat says they support the poor, they’re doing it with other people’s money.  And, as Margaret Thatcher wisely observed, “Eventually, you run out of other people’s money.”  My addition to that quip is “People run out of their OWN money”, because it won’t buy what it used to.

 

Minimum Wage

Minimum wage is one of the few things that cause both of the evils of macroeconomics: Inflation – which I just explained - and unemployment, which comes next.  I know it SEEMS nice to pay people more, but when you pay more for the same level of production, you cause more of that nasty stuff I just talked about: Inflation.  And, you violate the commandment about paying fair wages, because you are paying a wage that is NOT fairly determined.

The government reports incomes in quintiles, maybe that’s because there are five fingers on one hand.  Minimum wage is supposed to help the lowest paid folks, in the bottom 20%.  But it doesn’t, for two reasons explained by Thomas Macurdy, who is a senior fellow at the Hoover Institution at Stanford.  His article in the WSJ is titled The Minimum Wage Stealth Tax on the Poor.  He reports that minimum wage workers are dispersed throughout the five income quintiles.  Huh?  Well, he’s right, because income is not measured by the individual, it’s measured by families.  So, if one of my Dallas Baptist University students belongs to a wealthy family, but he coached soccer at his church league this summer at minimum wage, his income is taken back to his rich family, where it gets reported.  The afore-mentioned Professor Macurdy says that minimum wage workers are NOT concentrated in the bottom quintile, they are EQUALLY spread throughout the quintiles.  I know,