Interesting thread, and interesting answers to the question as well. However it seems predicated on feelings for the employee or a matter of what they "deserve", none of which is relevant to what the person makes. I know, I know, we're supposed to be compassionate and businesses are supposed to exist as a means for the employees to be happy. But that is simply not reality.
I've owned my business now for just short of 8 years. I have hired and fired many people. I've even fired a few customers. One thing I can honestly say about owning a business is that unless you actually do, you have no idea what it takes to make it work. I don't say that to sound better than others, I mean that even after 2 years of research and planning to open my shop there are still things that happen that I never anticipated. And there are a lot of expenses as well. Too many to list, too many new things that come along, new regulations, changes in procedures, vendors, market, etc. I have made mistakes in most of these, and overpaying an employee has certainly been one of them.
The fact is in any business there is a formula that determines what the employee pay will be, and any manager or owner who determines it based on feelings is either making a mistake or is in a field that is not competitive. The short story for my field and area is just over 30%. Conversely that equates to 325%. So a person making $10 an hour has to have a net production of $32.50 per hour. I don't even know what minimum wage is right now. Let's call it $7.45 an hour. In order for them to be worth what they are being paid they have to produce nearly $25 an hour NET to get that. It matters not if they have been producing that for 5 days or 5 years. The cost of employment is considerably more than what the hourly wage is as well. For each of my employees on top of their wages I have my half of FICA, uniforms, workers comp and unemployment insurance to consider. Above that there are many other static expenses, such as advertising, power, phones, heat, accounting, rent, internet, in my case subscriptions to technical information sites, taxes, compliance costs, you get the picture.
So to ask a hypothetical question about what "you" would do in itself exposes a lack of understanding of business operation (no offense to the OP).
I once worked with a guy who did oil changes in a dealership. He did some other little things, wiper blades, the occasional tire repair, but mostly oil changes. And he was GOOD. The best I had ever seen actually. He had a good attitude, he was efficient, and he was loyal. At one point he went to our manager and asked for a raise. One of the arguments he used was that he had 10 years of experience. I'll never forget what the manager said to him. He said "Billy, I like you. But you don't have 10 years of experience. There is no such thing as 10 years of experience doing what you do. What you have is 2 years of experience 5 times over. If you want to make what these guys make (meaning other techs like me) then do what they do."
and eight years and going strong is great
i have been in management for 20+ years....and i am still learning
and still making the occasional errors that cost me and the business money