Having been in the US for the past few months, I’ve been hearing arguments on hourly minimum wage and how it’s “not enough” for low-skill labor jobs. I found that to be quite an interesting argument considering that the average American is paid at least 10x of what their Asian or African counterparts are paid for doing the exact same job in a different geographic location. Of course, the value of money is relative to what it could buy you, and that’s why I put the “not enough” in quotation marks. But that got me thinking many questions, mainly; what constitutes the value of a human’s hour?

Here, I do not wish to address the sociopolitical history or reasons that made American’s minimum wage (and cost of living) much higher than what it is in Vietnam for example (story for another day maybe). My curiosity, however, led me to think of what constitutes the value of a human hour on a logical and economical level.

To do that, I always like to go back in history to observe how concepts such as that of a salary were forged. Technically speaking, a salary, just like money, is a made up concept by us Homo Sapiens. Going back a few hundred thousand years in the Savannah of Africa, the most basic forms of trade were between two humans. One who’s genetically strong hunts animals to feast on them, and another who’s more flexible climbs trees to catch fruits. Some days, the hunter wouldn’t manage to hunt a feast, and others, the gatherer saw no fruits in sight. That’s where and when the simplest forms of trade (and loans) had started. I like to refer to that as the Exchange of Labor.

Technically speaking in that example, the value of the hunter’s unit of time is completely dependent on whether or not he managed to hunt; accomplishing the valuable goal (nutrition resource). Some forecasting of how many kilos of meat a hunter could get can be made, an assumption on what others are willing to trade in return for a kilo of meat also could be made, and an approximated average on the value of a hunter’s hour is then possible to be calculated in a given day for example. But all of that goes to trash is the hunter fails to hunt. There is no inherent value of a human’s time, unless tied to an accomplished goal that is valuable to someone else.

This might be a big idea to tie one’s head around, but it’s true. As society grew, we moved in interesting directions. We invented companies to accomplish bigger goals that need people working together instead of a hunter working alone. Somewhere along the way, as group tasks became more complex and tasks’ outcomes became more difficult to quantify, approximations and hypotheses were put in place, giving birth to a fixed income concept. That was an interesting solution that helped ignore the problem of quantifying the value of an individual’s value of outcome, and focus on the overall group value of outcome. While unfair in some places, it saved a lot of time. I also don’t know whether the question of “what’s the minimum does this human need to eat, sleep, and buy clothes?” was a deciding factor in deciding one’s salary, but it certainly became so with time.

Either way, fast forward a few centuries, and the concept of a salary was engraved in our minds, giving us comfort and peace of mind at the expense of modern-day slavery and anxiety due to lack of productivity.

Point here is: an hour of my time driving is worth nothing. Null. Nada. None. An hour of me successfully reaching to destination X, delivering items Y, to human Z who deems this service of value is what’s valuable. Time itself is subjective and is worthless if the task was not accomplished. The value of that service is priced by the market; what human/customer Z would pay for it. That’s based on scarcity and cost of living essentially (also a story for another day?)

I think salaries have served a purpose, but I see a comeback for performance based income that has already unraveled in the form of “gig economy”. What’s funny is that in reality, gigs were the norm, and now they’re the exception. On a societal level, salaries introduced entitlement and complacency. With globalization, more and more products and services are being produced better and cheaper by those who lack entitlement and complacency, and those, as history proves time and time again, will always win.