Should the federal minimum wage in America be a percentage of something?

That’s an idea that makes sense, which means there isn’t a chance in hell of it going anywhere. The logical Idea to gear minimum wage requirements to prevailing local cost of living rates has been around for at least as long as the minimum wage itself. As it stands now, it turns out that the system you describe is pretty much in place. The federal minimum wage is the floor, with individual cities and states choosing to exceed federal requirements (depending on levels of enlightenment) based on local needs. And true to form, the more backward and destitute the region, the louder the protests against the “evils” of the minimum wage.

I’ve heard that from my daughter’s doctor. I was talking to him about labor and wage issues, as I work for an organization that advocates for employees, and was curious about wages in the doctor’s office. He said he thinks there should be one minimum for NYC, another (slightly lower) for surrounding counties, and a lower one for what’s referred to as “upstate.”

It should be tied to the local average cost of living, and updated each year, or maybe every two years.

The theory is good, but it doesn’t work in real life. I don’t remember which president it was, Nixon, Ford, or Carter, but they tried the same thing with farm prices. They tied them to an index and referred to it as parity. Totally screwed up supply and demand. Farmers could count on the prices for their products going up each year and they produced like crazy, regardless of demand. It wrecked the system and some other president had to end the idea, even though he was vilified for it. I think it has to looked at with all other factors figured in.

@Adirondackwannabe

I don’t really see how that’s comparable to minimum wage. Maybe it would be if worker’s wages were tired to the quantity of goods they produced, but that isn’t the case. An hourly wage would remain the same regardless of whether that worker produced 10 thingamabobs in an hour or 100 in an hour.

I would use a number that was based on a livable wage, not a poverty level based wage, and take into consideration the cost of living of the area being considered for employment. Just setting a wage of a certain standard national amount, like $15 ph., would put many small businesses out of business.

Here is a study that looks at what people need to earn to rent (per state). Page 12 has an interesting map.

However, I find these numbers to be even low. You’d be struggling if you only made the indicated $24/hr rate shown for Massachusetts.

@kritiper – If paying a living wage would put an end to a business, then we should celebrate that company’s demise.

Like @ragingloli, I think it needs to be variable based on region as cost of living varies considerable across the US. In the places that tend to vote Republican and be against minimum wage, you can get a decent place for under $500/month. Here in Seattle, that would get you a sub-let room, or if you’re really lucky, a roach-infested one-bedroom apartment in a building full of crack dealers and whores. Some may scoff at a $15/hr minimum wage, but most who do have never been where rents are nearly universally in the four-figure range and gas is 30–50 cents a gallon higher than the national average.

Here, (southern NY), a one bedroom is about 1200 per month easily. A decent one bedroom probably 1700 and up. NYC, 3k per month. Someone in my family has a studio and it’s over 2k per month in NYC.

I think rents would make an interesting question that is, unless it’s been asked recently.

Indexed to inflation.

@talljasperman If cost of living rose equally in all areas, maybe. In the years I’ve been living in the place I am now, the rent has gone from $850 to $1000, and it’s still on the lower end of the spectrum as far as rents go. Inflation has been 2% or less per year, but if you do the math, that rent increase averages about double the rate of inflation; 3.3% compounded over 5 years. And a gallon of milk that used to be about $2 is now closer to $4 in about the same time.

I’m thinking a base amount plus (0.7% * Median rent); I chose that number as it would allow someone who averages only 30 hours a week to still afford a place while leaving a bit for food, utilities, and taxes while full-timers could afford things like medical care or owning a vehicle.

@Darth_Algar If you understood agricultural economics, you’d understand how it is exactly like increasing the minimum wage. If you’re gross income is set to increase, and you know how to control production costs, you get a raise each time the price of your product you’re selling goes up.

@DoNotKnow 100% of all small businesses? And a large percentage of larger businesses? Can you say monopolies? Remember Ma Bell?? How much would an individual or small corporation have to spend to open a (hopefully) profitable business? Sorry, but those prospects don’t sound realistic for America. Or anyone else, for that matter. Too restrictive for all concerned. It might work if any and all businesses were owned and operated by the government, a single controlling entity.

An idea is for all the government’s surpluses to be paid as a dividend divided amongst all citizens equally.

@Adirondackwannabe

Frankly, I think you may be entirely misinterpreting the concept here. Besides, who on the minimum wage level knows or has the ability to control production costs? That sort of thing is usually way above that pay level.

@talljasperman

Governments rarely run a budget surplus. The US has only managed to do so in 12 years out of the past 75.

@Darth_Algar From your comments you have no concept of what I’m referring too, so let’s agree to let it go.

@Adirondackwannabe

Perhaps you could enlighten me. Well if you could remember more than a vague notion sometime during the Nixon, or maybe it was Ford or maybe Carter administration. Not trying to be snarky, but I really don’t think you can criticize someone else for not knowing what you’re referring to when you yourself don’t seen to remember anything specific about it.

Okay, cost of production are the costs of your inputs to produce your product. It’s the fertilizer, feed and all the stuff it takes to grow crops for sale or to feed your animals. And all the other stuff you have to buy to get the end product out the door. They now do drone surveys of the fields and identify which areas of a field need more nitrogen, phosphorous, or potassium. Or which areas need to have the pH adjusted. It’s fine tuning everything so you don’t spend a dollar needlessly. That’s how they control costs.

Yes, I understand all that. And that has what to do with minimum wage workers?

Parity was like a minimum wage. It guaranteed a minimum price for their products. Same as a minimum wage for your hours.

Yes, I suppose that’s (very) superficially similar. They’re still entirely different things however.

You still don’t get it. It’s not worth my time any longer.

If I “don’t get it” it is because you have yet to explain how it applies to the minimum wage. The failure here is yours, not mine.

@Darth_Algar I think that @Adirondackwannabe explained it well enough that I made the connection. If you still see it as inapplicable, then it isn’t due to not having it explained. As you have always struck me as both intelligent and fluent in English, it’s not really an intellectual failure on your part either. I can only assume that your misunderstanding is due to ideology; that the real reason you don’t “get it” is simply because you’re so opposed to the notion that you developed a blind spot and now you cannot “get it”.

@jerv

I get what @Adirondackwannabe is saying about the farm parity bit. I’m not seeing how that is applicable to the minimum wage, which would remain the same regardless of how productive the workers are. It’s not that I’m opposed to what he’s saying, I’m simply not seeing the connection there. If you do perhaps you could further clarify.

I don’t get the agricultural example either. I do understand we need to be able to predict within some reasonable assumption what expenses will be to produce goods whether it be crops or a widget. I don’t understand why minimum wage would bounce around a ton, assuming there isn’t excessive inflation, in rural area where farms are.