Some folks labor for minimum wage (or less) while a very few receive millions per year in compensation for their work. Many people are somewhere in between. However much a person makes, there is still the question of whether she is earning what she deserves or not.
This question falls, obviously enough, within the realm of moral philosophy and, more specifically, the subset of moral philosophy that is economics. After all, this is a matter of value and a matter of what a person should be paid.
On the face of it, the easiest and seemingly most sensible approach would be to answer the question by determining what value the person contributes and set that as the compensation the person deserves. To use a simple example, to determine the value added by a Big Burger employee to a Big Burger would involve subtracting out all the other contributions to the value of the burger, ranging from advertising costs to raw material costs. Naturally, the cost of managing the person would also be subtracted out. Since Big Burger employees are paid hourly wages and work with more than just burgers, the deserved wage would involve some estimations and calculations involving the average productivity of the worker. Other situations (such as those of salaried workers or self-employed people) would require appropriate modifications, but the basic idea would remain the same in that a person would presumably deserve to earn compensation based on the value she adds.
This would certainly seem to be a fair approach. If a person is paid more than the value of his work, then he would seem to be engaged in theft. If a person is paid less than the value of his work, then he would seem to be the victim of theft. Naturally, there can be obvious exceptions. For example, a person might help out a friend or charity by doing work at a rate far lower than she actually deserves without it being theft. As another example, a person might decide to help someone out by paying him more than his work is actually worth. This would be charity rather than theft.
On the idea that a person should earn what she deserves, then the idea of minimum wage would seem to not apply in a meaningful way. After all, the minimum wage and the maximum wage would be the same in this case, namely the value of the person’s contribution. Thus, perhaps the law should be that people must be paid what their work is worth. In some cases, a fair wage would be less than the current minimum wage. But, in most cases it would certainly be higher.
An obvious problem with this is the difficulty of determining the value of a person’s work. One aspect of the problem is practical, namely sorting out all the costs involved and determining what the person in fact contributes in regards to value. This is mainly an accounting problem, presumably solvable with a spread sheet. The second aspect of the problem is were value theory really enters the picture, namely sorting out the matter of assessing worth. That is, determining what should go into those cells on the spreadsheet. For example, what value does a CEO or university president actually contribute via their leadership? As another example, what is the real value an artist adds to the paint and canvas she is selling for $45,000? This area is, to say the least, a bit fuzzy. There is also the fact that people would tend to overvalue the value of their own work and generally undervalue the work being done for them.
The minimum wage could, then, be seen as a rather weak guard against work being grotesquely undervalued. By setting a minimum, this means that people will (in general) at least get some of the value of their work. However, it certainly leaves considerable room for greatly underpaying workers relative to what their work is actually worth.
The stock counter is that such matters get sorted out by “market forces.” That is, people whose work is more valuable can command better wages while people whose work is less valuable will command lower wages.
The obvious reply to this counter is that the alleged market forces tend to result in most people being underpaid and some people being compensated far beyond their actual contributions, even accepting the fuzziness of value. In fact, the underpaying of most is what is needed for the few to have such generous compensation. After all, if people were paid based on the value of their work, then there would be no fair way to profit off this work. For example, if Bob contributes $50 of value per hour to my widgets, I would need to steal from Bob to make a profit off his labor. As another example, if a CEO contributes $100,000 in value to the company, but is compensated with $10 million, then he is stealing the value generated by others.
It might be said that this is all fair because people agree to this system of value. However, this does not seem to be the case: people seem to agree to it in the same way that people agree to a dictatorship: they just go along because the people on the top and those who support them have the power to hurt them.