# Why not raise the minimum wage with local ordinances? **URL:** \ **Category:** Politics & Elections\ **Created:** [May 5, 2021, 7:32pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477 "2021-05-05T19:32:06Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [May 5, 2021, 7:32pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/1 "2021-05-05T19:32:06Z")
Continuing the discussion from [The Nahployment 'Crisis'](https://boards.straightdope.com/t/the-nahployment-crisis/941117/245): > [@The Nahployment 'Crisis'](https://boards.straightdope.com/t/the-nahployment-crisis/941117/245): > > > [@The Nahployment 'Crisis'](https://boards.straightdope.com/t/the-nahployment-crisis/941117/244): > > > > It shouldn’t be the responsibility of business to subsidize workers’ living situation > > Except that that’s kind of the whole point of the concept of “working for a living”. > > I mean, if you can work full time and live responsibly and thriftily, and still not be able to afford adequate food, shelter, clothing, transportation and other necessities of civilized life, then the basic concept of “working for a living” is broken. The cost of living varies according to _local_ conditions, so why not push for your _local_ government to raise the minimum wage accordingly? It seems like a lot less work to gather the necessary support at a local level. I recognize that New York state has [its own thing](https://dol.ny.gov/minimum-wage-0) going which precludes local minimum wage ordinances. That shouldn’t prevent us from having this discussion, though. ~Max ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [May 5, 2021, 8:00pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/2 "2021-05-05T20:00:52Z")
I’m not sure how local you mean. [Lots of states](https://www.paycor.com/resource-center/articles/minimum-wage-by-state/) already have minimum wages higher than the federal minimum. Do you mean town by town? It might be very expensive to buy a house in my town, but there are lots of towns (within the same state) within a few miles where the prices drop dramatically. ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [May 5, 2021, 8:02pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/3 "2021-05-05T20:02:30Z")
I was thinking by municipality or county. ~Max ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [May 5, 2021, 8:05pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/4 "2021-05-05T20:05:06Z")
Look at these median home prices from one real estate agent within Bergen County in NJ: > **[Average Home Prices In Bergen County - A Town by Town Price Guide](http://prgpowerrealtygroup.com/average-home-prices-in-bergen-county/)** > > A list of current average home prices in Bergen County, by town, with town links and current homes for sale. A great guide for home buyers & sellers. I don’t live in Bergen, but I imagine Essex County is similar. Are you proposing doubling or halving the minimum wage by township? Seems unworkable – while I don’t think that minimum wages by state have that much of an effect on local businesses, if Englewood Cliffs had a minimum wage of $20/hour and Englewood had one of $10/hour, I imagine you’ll see some businesses moving from one to the other. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 5, 2021, 8:13pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/5 "2021-05-05T20:13:50Z")
So, you mean like Lexington or Louisville Kentucky raise their MW above that of the state? > **[Minimum-Wage Ruling in Kentucky Weakens Localities' Power](https://www.governing.com/archive/tns-kentucky-minimum-wage-ruling.html)** > > The Kentucky Supreme Court ruled Thursday that cities such as Louisville and Lexington do not have the authority to raise the minimum wage. Because the state can say “No”. ---
**Author:** ![DMC](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dmc/32/18049_2.png) [@DMC](https://boards.straightdope.com/u/DMC)\ **Post date:** [May 5, 2021, 9:17pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/6 "2021-05-05T21:17:35Z")
> [@Max\_S](#): > > The cost of living varies according to _local_ conditions, so why not push for your _local_ government to raise the minimum wage accordingly? I could be wrong, but I don’t think that anyone on the side of federal minimum wage increases has an issue with local governments raising minimum wage levels. What we do have a problem with is the low floor from which these raises can occur. To everyone who agrees that the federal minimum should be $15.00, would any of you have an issue with San Jose, CA deciding that $25.00 was a better fit for their locale? ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [May 5, 2021, 9:32pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/7 "2021-05-05T21:32:18Z")
No issue here! ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [May 5, 2021, 9:59pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/8 "2021-05-05T21:59:52Z")
Yeah, it’s pretty much impossible for a municipality to enforce a higher minimum wage unless the state also goes along with it. My home state (MO) struck down a minimum wage increase in St. Louis a few years ago. Finally a statewide increase passed via popular vote (by a 62% to 38% margin). ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [May 5, 2021, 10:00pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/9 "2021-05-05T22:00:31Z")
> [@RitterSport](#): > > Look at these median home prices from one real estate agent within Bergen County in NJ: > > [Average Home Prices In Bergen County - A Town by Town Price Guide](http://prgpowerrealtygroup.com/average-home-prices-in-bergen-county/) > > I don’t live in Bergen, but I imagine Essex County is similar. Are you proposing doubling or halving the minimum wage by township? Seems unworkable – while I don’t think that minimum wages by state have that much of an effect on local businesses, if Englewood Cliffs had a minimum wage of $20/hour and Englewood had one of $10/hour[…] Okay, I’ll try and work this one out. > **Details** > > Englewood, NJ apparently has an average home value of $512,307 and a median value of $405,000. Englewood Cliffs apparently has an average home value of $1,323,864 and a median home value of $1,050,000. > > I don’t really know how to be accurate about this, so I’m just assuming the cost of living is 2% of home value per month (1% for mortgage/rent and 1% for everything else) and that there’s an average of 1.6 people working per household. The cost of living in a $405,000 home would be $8,100/mo, or $97,200/yr. There are 52 40-hour workweeks in the year, for a total of 2,080 work-hours per year. 1.6 people per household working 2,080 hours per year is 3,328 hours worked per year per household. $97,200/yr divided by 3,328 hours gives a minimum living wage of $29.21. > > In formula form, we can calculate the living wage from home value as y=x\*.02\*12/52/40/1.6 or y=x\*.24/3328. In table form, > > | Locality | Mean home value | Living wage | Mean wage | > | --- | --- | --- | --- | > | Englewood, NJ | $512,307 | $36.95/hr | $44.28/hr | > | Englewood Cliffs, NJ | $1,323,864 | $95.47/hr | $65.55/hr | > > | Locality | Median home value | Living wage | Median wage | > | --- | --- | --- | --- | > | Englewood, NJ | $405,000 | $29.21/hr | $28.51/hr | > | Englewood Cliffs, NJ | $1,050,000 | $75.72/hr | $45.96/hr | > > The average wage columns are based on census data from the 2019 American Community Survey (‘median/mean earnings (dollars) for full-time, year-round workers with earnings’, table S2001). Englewood’s mean individual income was $92,093 per annum (avg. $44.28/hr) and its median individual income was $59,302 per annum (avg. $28.51/hr). Englewood Cliffs’s mean individual income was $136,339 per annum (avg. $65.55/hr) and its median individual income was $95,602 per annum (avg. $45.96/hr). > > As you can see in the above table the residents of Englewood, NJ seem to be getting by without a minimum wage ordinance, but there is a disparity between the average wage and living wage in Englewood Cliffs, NJ. Therefore I expect that disparity would translate into political pressure to either raise the minimum wage or zone for more affordable housing, or both. > > I’m saying that momentum for a higher minimum wage might be better spent in city hall than D.C. My numbers for a living wage are significantly higher at $75.72 to $29.21, but I assumed 1.6 working people per home and median home values from the realtor’s website. It wouldn’t factor in things like apartment housing, which could possibly bring the numbers way down. Either way both of us have roughly 2:1. > [@RitterSport](#): > > Seems unworkable – […] if Englewood Cliffs had a minimum wage of $20/hour and Englewood had one of $10/hour, I imagine you’ll see some businesses moving from one to the other. Assume Englewood Cliffs sets their minimum wage to double the wages in Englewood. Businesses that don’t want to or can’t afford to operate with such high wages _would_ move away. On the whole I think this is a good thing, essentially I see it as market forces correcting the unreasonably high cost of living. I guess subsidies are an option but funding them creates a vicious inflationary cycle. The resistance of businesses would make it more difficult to increase the wage floor to begin with, though. ~Max ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [May 5, 2021, 10:03pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/10 "2021-05-05T22:03:22Z")
> [@k9bfriender](#): > > Because the state can say “No”. > [@Jas09](#): > > My home state (MO) struck down a minimum wage increase in St. Louis a few years ago. I knew it _could be_, but I had no idea this actually was prohibited by the states, except in New York. I guess that’s the reason why not, then. ~Max ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [May 5, 2021, 10:08pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/11 "2021-05-05T22:08:08Z")
> [@Max\_S](#): > > The resistance of businesses would make it more difficult to increase the wage floor to begin with, though. Yes, exactly. And, it doesn’t really make sense – I bet both Englewood Cliffs and Englewood get most of their lower paid workers from outside of those neighborhoods anyway – like I said, a few miles can make a huge difference in cost of living. ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [May 5, 2021, 10:20pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/12 "2021-05-05T22:20:55Z")
Admittedly I didn’t really think of commuting when I made the topic. Maybe you can clarify something for me - I always thought local income taxes could be assessed based on the employee’s residency. So if my employee lives in Bergen County they have to comply with Bergen County’s tax requirements, even if my business is in Essex County or what have you. If that is the case, wouldn’t it be possible to apply minimum wage ordinances on a residency basis, too? ~Max ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [May 5, 2021, 10:24pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/13 "2021-05-05T22:24:10Z")
NJ, at least, doesn’t have local income taxes, just local real estate taxes. So, an employee living in Bergen County but working in Essex County would pay Bergen County real estate taxes and NJ state taxes, but no other taxes that I know of (well, sales tax, sin taxes, federal taxes, gas taxes, etc.) ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [May 5, 2021, 10:25pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/14 "2021-05-05T22:25:29Z")
If I understand you that would very likely end up in a race to the bottom. No municipality is going to disadvantage their residents in the employment marketplace like that. ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [May 5, 2021, 11:12pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/15 "2021-05-05T23:12:16Z")
According to NJ law, municipalities are authorized to enact _employer_ payroll taxes of up to 1%; however, if the median municipal household income exceeds $55,000 the proceeds must go towards education. From what I can tell only Newark takes advantage of this. > **N.J.S.A. C40:48C-15 (2018).** > > > **40:48C-15 Collection of employer payroll tax by municipality.** > >    15. a. Any municipality may by ordinance impose and collect an employer payroll tax for general municipal purposes of the municipality, or for the purposes set forth in subsection d. of this section, at a rate of up to one percent of the employer’s payroll. > > > >    b. A municipality may by ordinance adjust the rate of an employer payroll tax imposed and collected pursuant to subsection a. of this section, provided that the rate does not exceed one percent. Any reduction in an employer payroll tax while the municipality is in receipt of aid provided through the Transitional Aid to Localities program, or any other discretionary aid program for municipalities in fiscal distress, shall be subject to approval by the Department of Community Affairs. > > > >    c. An ordinance adopted pursuant to subsection a. of this section may provide that the employer payroll tax shall not apply to the remuneration paid by employers to employees who are residents of the municipality. > > > >    d. (1) If a municipality adopts an ordinance pursuant to subsection a. of this section and the municipality has a median household income of $55,000 or greater according to the most recent American Community Survey five-year estimate by the United States Census Bureau, all employer payroll tax revenues collected by the municipality pursuant to the ordinance shall be deposited into a trust fund to be used exclusively for school purposes, inclusive of charter schools. > > > >    (2) The governing body of the municipality shall monthly pay employer payroll tax revenues deposited in the trust fund over to the board secretary or treasurer of school moneys, as appropriate, of the school district coextensive with the municipality or of which the municipality comprises a part, in an amount equal to one-twelfth of the difference in State school aid provided to that school district, pursuant to P.L.2007, c.260 (C.18A:7F-43 et al.) and P.L.2018, c.67 (C.18A:7F-67 et al.), between the current State fiscal year and State fiscal year 2018, for use in lieu of adjustment aid and all other categories of State school aid. > > > >    (3) Any balance remaining in the trust fund shall be reserved for use toward making payments pursuant to paragraph (2) of this subsection in the event the employer payroll tax revenues collected in a year are insufficient to pay the full amount provided for under that paragraph. > > > >    L.1970, c.326, s.15; amended 2017, c.35; 2018, c.68, s.1. I had a local employee minimum wage ordinance in mind, so the tax analogy would have called for a local _employee_ payroll tax, which at least isn’t explicitly authorized by NJ law. ~Max ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [May 5, 2021, 11:28pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/16 "2021-05-05T23:28:20Z")
> [@Jas09](#): > > If I understand you that would very likely end up in a race to the bottom. No municipality is going to disadvantage their residents in the employment marketplace like that. If it’s a commuter town the cost of living would already be lower, at least lower than the commercial municipality everyone is working at. If the commuters are being paid wages lower than the cost of living even in their commuter town, that is an unsustainable economy anyways. I think the municipality would be justified in at least examining relatively drastic options like a minimum wage ordinance - assuming they are legally permitted to enact one. The cost of living would provide a bottom floor, the ideal one. So yeah, I think that’s a good thing. I would think most hubs of commerce have a very small population of reverse-commuters who could or would want to push back. Maybe D.C. because of the height limit (but D.C. has no hope of change through local politics, it’s municipal governing body is the U.S. Congress). ~Max ---
**Author:** ![Dr\_Paprika](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr_paprika/32/3042_2.png) [@Dr\_Paprika](https://boards.straightdope.com/u/Dr_Paprika)\ **Post date:** [May 5, 2021, 11:39pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/17 "2021-05-05T23:39:00Z")
Local government has the advantage of being closer to the average citizen and the ability to be more responsive to concerns. But it has many disadvantages - nepotism, overconcern about elections, limited knowledge, limited funds, easy to lobby, more room for immoderate views… In general, I’m not sure municipal governments have a mandate to do this, want to do this, or have the expertise and budget to do this. Yes, provincial and state governments often download responsibilities and have some of the same disadvantages. But when embarrassing decisions are made - things like removing fluoride from water or outdated changes to curricula - these tend to occur more at a local level due to less knowledge and more interpersonal politics. Small governments do not have the expertise or desire to do everything a federal or regional government does. Taking on issues which are too large should not detract from the many things local government needs to do and should focus on. ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [May 5, 2021, 11:43pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/18 "2021-05-05T23:43:36Z")
> [@Dr\_Paprika](#): > > In general, I’m not sure municipal governments have a mandate to do this, want to do this, or have the expertise and budget to do this. What kind of expertise or budget is required? One would think the local population knows, on an individual basis, when they can’t afford the cost of living. And local businesses know when they can’t afford to operate. Census data and other extant polling can provide basic facts. If mistakes are made, market forces will autocorrect - either businesses move out or the people will call for another raise. ~Max ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [May 5, 2021, 11:44pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/19 "2021-05-05T23:44:26Z")
> [@Max\_S](#): > > I always thought local income taxes could be assessed based on the employee’s residency. You always pay taxes where you work. If where you live has reciprocity with where you work, which is _most_ but not all places, then the taxes that you paid towards where you work are deducted from where you live. Where I work has a 1.5% tax, where I live has a 2% tax, so I pay 1.5 to where I work, and .5 to where I live. ---
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [May 5, 2021, 11:49pm UTC](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477/20 "2021-05-05T23:49:22Z")
Can you give me a cite that this applies for intra-state commuters? ~Max [Next page](https://boards.straightdope.com/t/why-not-raise-the-minimum-wage-with-local-ordinances/941477.md?page=2)