At the beginning of the game, it does feel like you are being punished for including a Mage in the party. However, after saving enough money to get my Mage some nukes, mostly fire/ earth spells, my Mage has become one of my strongest members. The advantage of having a Mage:

1. Can be very tanky because you can equip a shield without sacrifing damage
2. Grab a cheap poison wand, like the turtle wand. If the enemy is on fire, even a tiny bit of poison damage will trigger an explosion that deals tons of damage.
3. Instead of focusing on one dude like the rest of your physical members, focus your spells on enemy archers. Their magic armors are easy to take down. Then you can do AOE explosion damage. With CC. At range.
4. Enemy archers would be taken down in 1-2 turns.