Doing The Minimum Wage

Doing The Minimum Wage

A man standing at the side of the road holding a cardboard sign. An altogether routine sight in Oregon. Except this one read; Labor $6.00/hr.  Well below the minimum wage.

Intrigued, I pulled over to talk with the man, who appeared to be in his late 50s. His story went as thus: retired with a small pension, living modestly, receiving some government benefits. Just wants to earn enough to protect his tiny nest egg.

So why not just get a regular gig at some local business?

Turns out “Sam” is kinda slow moving due to various injuries and ailments over the years. Also, his literacy and numeracy skills aren’t the best. “But”, he says, “I make up for it by being dependable and thorough”.

My short conversation with Sam made me think about the current discussion over the minimum wage. He could not compete in a labor market at the current Oregon rate $11.25 or even the previous $9.75 (to say nothing of the taxes that business may pay on top of that hourly wage). But $6.00/hr under the table makes him employable.

The famed business expert, Peter Drucker, once said something to the effect that companies don’t have employees, they have personnel expenses. An enterprise will only expend money on people who provide a return on investment.

“Good business leaders want their employees to have a decent life and want their employees to make enough money to afford to live,” noted Roy Cooper of the Economic Policy Institute. “They just don’t want to be put at a competitive disadvantage.”

Does the minimum wage law push people out of the workforce? If so, what are we to do about those who cannot produce a return value on Oregon’s $11.25/hr? Will they be condemned to a life outside the mainstream economy?

Are we to see an explosion of people openly offering themselves as available for work below the minimum wage?  Will the government respond by arresting those who dare stand out on a highway  advertising themselves as such?  Will there be sting operations where police will lure someone needing help cleaning out their basement

I tried to talk to Sam about some of the larger questions, but he was having none of it.  All he wanted was to do a little work, collect a little money then go home to his cat and watch some college football.

I gave Sam $6 for his time.


  1. There’s a growing barter labor market as well.

  2. Wow, this is a powerful story. There are men and women out collecting pop cans from the side of the road just for some extra pocket money. If they average 1 can per minute, that’s $6.00/hr, but it’s hard labor in a dangerous location (along the highway). Then of course there’s the possibility of someone stealing your cans (which happens a lot.). I bet they’d be happier raking leaves, or helping move a washer and dryer for $6/hr. Yet we have no way of employing this kind of labor without the government getting involved, and every time the government gets involved it only increases the cost of getting anything done. What’s worse is that without work, even low-paid work, , people lose confidence, purpose and dignity. I love that guy by the side of the road. He knew his assets and his limitations then priced himself accordingly.

  3. Under the table labor is growing for precisely the reasons you give. I’m willing to guess the guy in this story is also receiving some type of public benefits which he would lose if taking a real job.

  4. Must be scary for him to stand by the road Never know who might pick you up Shame our laws are so effed up that wee force people to live this way

  5. A bill has been introduced in NJ that would require anyone hired be an employee. I don’t think they’ve put the finer points on this, but on the face of it 1099 labor would no longer be permitted. I think this is following the recent bill in CA. It is most likely a money grab by the government, and a retaliation for large corporations that “retire” middle management then bring them back as “contractors” eliminating the need for payroll taxes and benefits. No one has seen fit to explain what happens to the thousands of small business owners who may be sidelined or legitimate freelancers in the “new” “gig” economy. As you stated, businesses require an ROI, if they intend to stay in business they cannot hire an employee for every little task the business requires. In the case of “Sam” if someone wanted to hire him to supplement their staff for a day or two he would have to be put on payroll. Some work is most efficiently outsourced.

  6. Problem is most of our leaders have an undeveloped understanding of labor markets. No one will work for less than their perceived value, and no one will hire someone unless they perceive a solid return on that outlay.

    When the state steps in and says “you must pay this much for labor” then two unintended consequences happen: Some jobs that could be filled at a lower rate get eliminated and some people who could be gainfully employed get locked out of the workforce. Neither are good for our country.

    Great article Michael. Kim shared this with me.


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