Personal finance expert Dave Ramsey says minimum wage was never meant to support a family or create wealth, but to give workers a first step into the job market.
Comedian Theo Von asked Ramsey on his podcast in April 2024 about the growing debate over minimum wage and how rising prices are making it harder for Americans to get by. Ramsey said history shows minimum wage was “never designed” to support a family or build wealth.
“Truthfully, I don’t think any time in history, minimum wage has been enough to take care of a family,” he said. “So you’ve always had to think beyond minimum wage if you wanted to excel, if you wanted, a, build some wealth or b, just take care of a family.”
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‘Do Something That Beats Minimum Wage’
Ramsey said that people always have the opportunity to “beat” minimum wage by taking initiative. He said when he was 12, he chose to cut yards for a flat $3 per yard and tried to finish each one in about an hour, while the minimum wage at the time was $1.65 an hour.
“I’m making double minimum wage at 12 years old and that’s how my little math brain was working, so I’m running that mower, you know, I’m going,” Ramsey said. “So you don’t want to sit and say okay, minimum wage is my gauge of whether I can go win because I can go do something that beats minimum wage.”
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‘False Narrative’
Ramsey said the more disturbing and ‘alarming’ issue is that wages in general and average household income have not kept pace with inflation. He believes stagnant overall wages affect the entire population, not just entry-level workers.
Ramsey said it’s a ‘false narrative’ to blame the surge in inflation entirely on political factors or bad policies. He said most of the increase stemmed from the COVID-19 pandemic, which disrupted supply and demand.
“There was a shortage of freaking everything,” Ramsey told Von. “So everything shot up, real estate shot up, because people sat around in their houses during the pandemic, and then, you know, when the sun came out, and the curve was flattened and all, these people wanted new houses.”
Ramsey said he expects inflation to come down over time because prices follow the basic rules of supply and demand. He said when prices get very high, people spend less, which increases supply and helps bring inflation down.
“The marketplace will smooth out,” he said. “Eventually you find this equilibrium, this balance.”
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