These aren’t two different facts, in opposition to each other.
The cost of living tends to be lower in poorer regions. The cost of living tends to be low largely because the region is poor. Poor people earn lower wages. (This is a key reason why they are poor.) This means that getting basic services from people in those regions tends to be lower, because those services don’t cost as much. For the same reason, businesses in those regions are only going to be able to afford lower average salaries: their revenues are lower, because the region is poorer. This is why a restaurant in bumfuck Alabama will immediately go out of business if it has to pay Manhattan wages for its workers.
Wages in different regions are different for a reason.
A uniform wage for all regions in the country, both rich and poor, is an extremely poor idea. There is a reason why prices are different in different places, including the price of labor.
This is an argument against the minimum wage itself.
We should not judge ideas and policies on what they intend to do but on what they actually do. While minimum wages intend to move people with full time employment above the poverty level, they also move people with full time employment into part time employment and reduce the overall level of unskilled work.
I’m quite sure there isn’t a cite, because franchises and small businesses are going to be subject to minimum wage laws just as much as the largest corporation.
If you can’t cut executive salaries and bonuses, and if it is true that
People who worked full time over the previous year who are living in poverty was 2.7% of the workforce. In 2017. That number’s been dropping, so it’s probably lower now, but I haven’t seen newer numbers yet from BLS.
And of course the (official, although there are two of them for whatever reason) poverty level depends on household size. The federal minimum wage does not leave a single adult working one FTE under the line. Or two adults living together working two FTEs, even if they have a few kids.
Not surprisingly, these states have labor force participation rates below average. The primary indicators for poverty are not working or only working part time.
I think we are rich enough to help people who can’t earn enough to get by. Hell, I think we are rich enough to help even a fuckup who can but won’t earn enough to get by. If someone can’t earn enough to meet their needs, then the burden on me to help them is still reduced by them getting a job – the employer isn’t suddenly obligated for the remainder just because the employee has, say, seven kids (HHS poverty level = $43,430).
If one of the working members of my household decides a get a $7.25/hr job, my household will not be in any need of extra help. A household with a $15/hr earner might need it though. The MW does not target the extra income at the households who need it. Whereas taxing you and me and targeting the actually people in need does.
I agree with the idea that minimum wages distort the market. If they are implemented the way that someone like AOC wants to, we would probably end up with inflation rising to a level to meet the new minimum wage, which would then have to raised again.
One issue is that those people already making more than minimum wage will demand an increase as well, and then the price of the goods / services from those workers will increase. For example, if public employees like teachers, police, firefighters, etc. all got raises, some of that would be paid for by an increase in taxes on those people now making $15 per hour. The same goes for the price of basic goods. If the entry level workers at Walmart make $15 and the more experienced workers are up into the $20s, the prices at Walmart will go up to cover those salaries. The only way it works is if the Walton family (and the owners of the companies in general) to volunteer to reduce their own profits. I don’t see any way of accomplishing that.
I think a better idea would be a minimum basic income which is slowly phased out for those who earn more than whatever the minimum is to avoid causing an incentive to not work.
There should already be plenty of recent data on the economic impact of such raises, at least on the regional level. When Amazon bumped their starting rate to $15 last year, it pushed the local Wal-Mart to raise theirs by $2, to $12/hour and nearby Toyota to move their starting rate to $19 a bit later. Despite a state minimum of $7.25, that’s 2 of 3 of the largest employers in Central KY offering more than double that. Only price fluctuations I’ve noted personally is the usual - gas prices. No foundering franchises or closed small businesses, to my knowledge.
Why should there be a federal minimum wage? The states are free to set a minimum wage that is greater than the federal limit. Each state or even municipality can establish an appropriate minimum wage for the their market and cost of living conditions.
The main reason for the feds to do it is if they think the states aren’t doing it well enough. This is clearly something that could be fine tuned to be more efficient at the local level (though telecommuting people would still game it), but if the states ain’t doing it the way the feds want it done, then the feds are going to ponder picking up the slack.
Shouldn’t the people in the state be driving this for their own community? Why should the federal government step in if the people of the state think their state’s min wage is appropriately set?
In other words, why should New York set the minimum wage for the entire country?
This presumes that the people who run the state are decent people who both give a flying crap about their populace and a competent enough to adjust things toward that end. That’s not necessarily a sound assumption.
Admittedly, it’s also not sound to think that the federal government has decent competent people running it (obviously), but a difference in priorities could easily explain why the federal government might think the state isn’t doing a good enough job on its own.
I found an article on Marketplace’s website (the radio program) which says in November of 2013, a Mr. David Rolf in SeaTac, Washington picked the number as “leverage” during negotiations to unionize airport workers (Bergman, 2015):
This is backed up by a New York Times article dated November 26 of that year (Johnson, 2013):
So even though the state’s citizens elect their own officials, it is your feeling that the federal government has the right to step in push its own agenda to the state if it doesn’t agree with what the voters of that state have adopted through their own representatives?
Minimum wages distort the market in that they abolish pauper labor. The theory is that the jobs that are no longer economical are jobs we’re happy to be without.
People with limited skills work those kinds of jobs because they believe that earning that money is better than the alternative. Preaching to them from a position of relative comfort that they’re better off not having a job, better off not earning their own living because their work is beneath one’s dignity is not a morally enlightened position. Quite the opposite.
I think most of the empirical research indicating that the minimum wage has little or no dis-employment effect relies on extremely poor data and is unconvincing. (Which is not necessarily a fault of the researchers: most data of this type is poor.) But at very least, they support the policy because they think people won’t lose their jobs from it. They might be mistaken (I think they are), but at least they don’t look at the data and say “Yep! The poorest and most vulnerable among us will lose a primary income stream, what a great policy!” I don’t believe I’ve ever come across such a perversity before.
The federal government has in interest in reducing poverty for all of its citizens. But, it specifically has an interest because many welfare programs are paid for in part or wholly by the federal government (food stamps, Medicaid, school lunch programs, at least). Increasing the minimum wage nationally may help raise some people from poverty, reducing their reliance on these federal programs.
I’m a small business owner. All current employees are paid more than the current Minimum Wage, but a substantial jump in MW would mean I’d cut back on the number of employees.