Rethinking the minimum wage

This article makes a good case for regional minimum wage amounts. A single minimum does not reflect differences, sometimes significant, in the cost of living. That’s why the cry for and the political support for a $15.00 federal minimum makes no sense.

Once again the political left demonstrates a limited effort to fully understand an issue and a tendency to minimize the consequences.

Prices are different all over America. Regional minimums should be, too.

One comment

  1. The politicians only need to look at their own bureaucrats to verify that this article makes sense. Just examine the federal employee’s per Diem and M&IE rates and how they vary. In New Jersey, a federal employee gets up to $208 to stay in the cites just outside of NYC, while in the southern part of the state like Cape May, the combine rate is $144, a difference of $64 a day.

    The question is how to set the regionals rates without having the politicians screwing themt up. You can’t have some people in your state making more money than others because it’s not “fair” and if they are being paid less, the politicians will buy votes by “giving” raises to the less paid regional areas.

    To me, the minimum wage should be the starting wage. Market forces should dictate actual wages. If somebody is working at minimum wages for years, then there is a problem. 1) the wage is too high or 2) that person has not learned enough skills to move onto the next higher skill paying job. If a restaurants can not get dishwashers or bus boys then they will have to pay more.

    Maybe the correct minimum wage should be $0.00. I can’t imagine anybody actually working for such a low wage, thus the supply and demand of labor will determine the wages in a given area. Maybe the minimum wage should be $0.50 more than what you can get from welfare, otherwise why bother to work.

    The minimum wage is great for non-manufacturing jobs. However in the manufacturing sector, companies will move a plant to an area with the lowest labor cost. In order to sell their product to the lowest paid minimum wage earners, in the lowest paid regions, then they have to keep their labor cost down. If the manufacturer cannot find cheap labor in the US, they will find the cheapest labor in the world, thus current minimum wage is a race to the bottom until the minimum wage is equal around the world. Having a high local regional minimum wage might just put more people on unemployment and factories might move out of the area. At least a state wide or a federal wage should make the labors cost the same for the different areas unless there is a supply problem of qualified labor. Hopefully, the labor costs will be less than the transportation cost to import the product being made with cheaper labor out of the country.


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