Alberta’s wage floor was from $10.20 to $15 over three years ($1.60 increase per year). If you go with increments instead of a big jump you run into ‘stickyness’. Employers will drop all their employees at the first instant if the wage is going from $8 to $15 overnight. If it’s only a few cents at a time there’s a good chance the employees will stay on. At a ~15% wage hike it’s a tough decision - see also the NPR story above about a 25% minimum wage hike on one half of a mall. And consumers won’t abandon ship if prices go up just a little, unless your business is something highly unsticky like a gasoline pump.
The thing is, there are reasons why I may want to locate my business in a place with a higher MW. If nothing else, if it has a higher MW, then the residents have more purchasing power. It may have better infrastructure and services. It may have better amenities for me to go out to lunch.
There is no reason why I would want to hire someone that I have to pay a higher wage solely based on where they live. Now, it may be the case that I pay more than City A’s MW anyway, so it doesn’t matter, but then that MW isn’t really doing any good.
People can commute. It’s pretty common that people, especially those on the lower end of the pay spectrum live in a place that has a lower cost of living than where they work. They work where the money is, and they live where it’s cheaper.
I’m fine with this. All I’m doing by setting the minimum wage at each employee’s living wage (based on where they live) is preventing a situation where employees make less than a living wage. The reality is that a living wage can vary by county or municipality.
If the municipality is facing high local unemployment due to lots of commuters taking local jobs, one option is a commuter tax. Otherwise, what’s the problem?
There are places that you only live after you have made it rich. What a MW is supposed to do is to ensure that you are able to live somewhere that is within commuting distance of a place where you can find gainful employment.
I think that, as we discussed, most already do impose a commuter tax. There is no problem, it’s that your solution is in search of a problem.
Why would a wealthy community be facing high unemployment because outsiders are taking MW jobs? The whole point is that the people who live in that community have no need or desire for them.
Excellent! I think everyone would agree that we need to prevent situations where employees make less than a living wage. Let’s start by raising the floor to a level that will guarantee a living wage in the cheapest of locations and we can start tweaking high cost of living/working areas from there. $15 an hour should do the trick for now, as even the cheapest and poorest places in America require more $13 an hour for a single with no kids to make a living wage, and there aren’t many jobs in those areas anyway. We can tie future floor increases to something such as median hourly wage increases to keep it at a living wage level going forward.
You wrote “there are reasons why I may want to locate my business in a place with a higher MW”. I was just saying one reason may be your desire to locate your new business in the same city that you already live in.
If the minimum wage follows the employee based on residence, it serves a slightly different purpose. Instead of ensuring you can live somewhere within commuting distance, it ensures you can live in the municipality that you actually live in.
The problem with local minimum wage ordinances based on the vague notion of ‘somewhere within commuting distance’ is, none of those commuters have any say in the minimum wage where they work.
Assuming a local minimum wage that matches the living wage for commuters but not urbanites, and assuming no commuter tax: a business owner knows local residents can’t survive on minimum wage because the cost of living in the city is higher than the city’s minimum wage. So local residents won’t be happy employees in a minimum wage job. Commuters can make a decent living off the minimum wage. Owner hires the commuters instead of local residents. As most low-end jobs across the city are given to commuters, the city faces unemployment and possibly homelessness.
Nah, I live in a fairly cheap area, and work in a pretty wealthy one. Most of the cars that people drive around here are worth more than my house.
Does that include if they move during employment? I can force my employer to give me a raise by moving somewhere with a higher cost of living.
I don’t know that that is something that needs to be addressed. I’d much rather live somewhere cheap, and work somewhere with a higher MW, than have to live somewhere expensive to get that higher MW.
Except of course, having a say in where they work.
I don’t see why you would make either of those assumptions. One would only exist if your idea somehow got made into reality, and I don’t see why there wouldn’t be a tax on where you work, as there is. Is that something else that you would change? That you no longer pay income tax if you work where you live?
Well, yeah, that’s another reason why tying MW to where you live rather than where you work is a terrible idea.
We’ve gone over quite a few cons to this idea, did you actually have any pros, and argument that gives this idea merit?
It’s an interesting idea, and is worth thinking about, but after you think about it and you see all the flaws, it’s time to move on, I think.
Then you disagree with the vast majority of research as to what constitutes a living wage or why the minimum is way too low. Using the typical rent as 30% of income calculation, your rent number gets me to a minimum wage of $13.53. The most telling statistic in this entire brouhaha is that 28% of those who make over 100K think minimum wage is enough to live on. 11% of those making less believe the same. It should also be noted that 83% of those surveyed think it is too low.
My method of solving the problem requires a couple of senators who aren’t scrooges. Your method requires 89,000 municipalities to come up with their own complex systems. Since your entire goal was simplification, why make it so damned hard, unless there is actually a different goal?
Let’s be honest here, I’m not getting a “raise the minimum wage” vibe from you at all. What would the end result look like in your world, monetarily and simplified?
I hadn’t thought about that. Moving would force your employer to either change your pay or let you go.
The minimum wage isn’t designed to maximize personal income, it’s designed to make sure employees make enough to live on. You as a worker shouldn’t be complaining if you can’t shop around for the largest gap between the minimum wage and the living wage, in an effort to game the system. You should be worried about employability wherever you are thinking about moving to. The minimum wage would ideally guarantee that if you are working, you will be okay.
The former assumption was based on your suggestion, “What a MW is supposed to do is to ensure that you are able to live somewhere that is within commuting distance of a place where you can find gainful employment.” The latter assumption was necessary for my example.
Furthermore I happen to live in one of the seven states without state income tax. The only income tax in Florida is at the federal level.
To clarify, this thread of replies leading back to posts #45 and #48 do not involve a minimum wage based on residency. The example you quoted from me incorporates a local minimum wage ordinance by the city that applies to all wages paid by businesses operating in that city, and that city only.
The MIT paper pegs broadband at $60/mo which translates to about $0.35/hr in the living wage. MIT also includes a smartphone prorated over three years with unlimited talk and text and between 10-15 GB of data, I think it comes out to about $48/mo for a cell phone (+$0.27/hr in the living wage). I wouldn’t include broadband or cellular data plans because I think these are not essential (unlike a prepaid voice/SMS plan). We can start a different topic if you want to debate that point. Assuming I can shave eight or nine dollars off the monthly phone bill, drop the broadband, there’s about $0.40 of the difference.
MIT’s living wage health insurance component (based on employee contributions to employer-sponsored plans, from this table) comes out to $128.58/mo in my region (+$0.75/hr in living wage). I had used $10/mo ($0.06/hr) based on individual coverage in the marketplace, as advertised in recent healthcare.gov commercials. So there is another $0.50 difference.
They also include about $426/mo in transportation costs for my region (+$2.45/hr in living wage). That is also based on BLS Consumer Expenditure reports of transportation costs by household size, adjusted for regional variances. I don’t think this is necessary. Owning a car may be necessary in many places or for various jobs but it isn’t necessary here for most minimum wage jobs I can think of. People making minimum wage can (and around here often do) use either public transportation, or a bike, or walk, or some combination. A bike can easily be prorated to under $0.20/mo, and here unlimited bus fare comes at $30/mo. So in transportation I find a difference of about $2.27/hr.
$2.27+$0.5+$0.4=$3.17, which is more than the $3 difference between $13 and $10.
The goal is not simplification. It would be immensly more simple to have a single national minimum wage at $13.10 or $15. As stated in the OP, the benefit of local minimum wage ordinances is that it would be easier to pass local ordinances than national legislation.
I stand by all my assumptions. A single adult working 40 hours per week at minimum wage can, or at least I think they can, get health insurance through the individual marketplace at $10/mo with federal subsidies. See also my response to DMC, post #60.
ETA: Working $10 for forty hours a week will disqualify one from Florida’s Medicaid program, but I put the numbers into healthcare.gov and qualified for a $442/mo premium tax credit.
It’s easier to pass 89,000 different minimum wage ordinances than voting for a few senators that don’t want the poor to actually suffer on a daily basis? Apparently, we have different definitions of easy.
If you just want to argue that we shouldn’t raise the floor to $15.00, power to you. We’ve been there and done that, so I’ll bow out now.
You don’t have to pass ordinances in all 89,000 municipalities. I’m sure some are fine with their state minimum wage as it is. But yes, I do think it is easier to pass many many local ordinances than it is to get the United States Senate to agree with the most reasonable of progressive legislation.
We can already pass local ordinances to raise minimum wage. With the exception that some states shit on those increases, what exactly are you advocating? If you want to federally outlaw state overrides of municipal minimum wage increase proposals, sure, I’m on board. If you don’t, but are instead advocating letting municipalities set the wages, but under limitations set by the state, then why didn’t you simply frame the debate as:
Resolved: minimum wage should continue to be handled the way it currently is.