Does my teenager, whose living expenses are still fully paid by me, really need a living wage?

Thank god it's none of my employer's business what my living conditions are. If I can make do with a lot less because of personal circumstances then that's good for me, but that can't be the metric to measure other people against.

part of me feels like he’s taking some of that from someone who needs it

He's taking it from his employer who certainly doesn't "need it more", otherwise they wouldn't employ your son.

It's certainly not my intent to judge you or make assumptions, but that seems like kind of a weird perspective, to believe your kid should make less than their peers for providing the same labor. There are plenty of households who humbly ask their working teens to contribute a portion to bills.

Think about the natural conclusion to the problem that you're trying to address. What if we pay teenagers who don't need the money less than everyone else. That would incentivize employers to ... check notes ... only hire teenagers who don't need the money. Everyone else, who actually does need the money, they would have trouble finding a job. Facepalm.

Also. Because your teenagers are getting lucky, in that they have a family that's paying all of their bills, you somehow wish that they weren't getting lucky, and that some rich person was getting richer? Do I understand that correctly?

Furthermore. There might be value to your teens in working less so that they can do other things when they're still teenagers. That might be something you would want to explore, since your family's finances are in a solid state.

And hey, if you think your teenager is being overpaid, why don't you encourage them to donate some of their money to charity?

In many other families, finances aren't so strong. Maybe the parents can pay the bills, but if the kids want to go to college, they'll have to take out student loans. Or they could start saving in high school, and use that money for college, or to get an apartment if they have to move out, or to buy a car, or whatever else they need after they graduate high school. All of a sudden the extra money sounds really important, doesn't it.