A National minimum wage is unwise if it doesn’t consider regional costs of living.

Look across the US and you will see significantly different incomes among the states. Property taxes and other expenses vary greatly. Live as middle income in one state and move to live much better.

So why do we think it wise to impose a $15.00 minimum wage in every state?

According to the living wage calculator from MIT, a single worker in New York needs $15.56, in Mississippi $10.89, Alabama $11.24 Montana $10.97 in West Virginia $10.83 and in California $14.99 for a living wage.

We can debate the viability of each number as a living wage, but it’s clear that one size does not fit all.

What are the consequences, the impact on the economies, the cost of living and even taxes in Mississippi, Montana or West Virginia if a “living wage” suitable for New York and California is imposed on them?

6 comments

  1. National minimum wage is being pushed because the high cost blue states can’t compete against lower cost areas. The democrats are hoping that this will stop the exodus of businesses from states like IL, NY and CA to states like TX, FL, NC. This is just a nationalized version of prevailing wage laws, made to allow union shops to survive when they otherwise wouldn’t be able to compete (and make campaign contributions).

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  2. Regional costs are a major factor. For instance, my brother in North Carolina lives comfortably on his social security check. On the other hand here in NJ living on SS alone is laughable and impossible for most.

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    1. Just the difference between North Jersey and South Jersey is big, especially in property taxes. I can’t imagine what the differences are in a very large state such as California are like. Even the costs for big cities such as New York City compared to the rest of New York State has to be big.

      I do believe that you need a state wide minimum wage to level the playing field a little bit in a smaller geographic region but not the Northeast states compared to the Southwest states over 3000 miles away. I also believe that labor market supply and demand will cause wages to be higher in some of the big cities if they want talent to move to those expensive cities.

      A thought just came to me that I need to explore. During the depression, people moved to where the jobs were. Even today, we have the rust belt states where the jobs went where labor was cheaper, basically north to south. Did the welfare system keep people from moving to where the jobs are and the unintended consequence is more working poor depending on minimum wage in the large cites? I wonder if somebody did such a study?

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      1. I live in New England where each state except New Hampshire has its own minimum wage schedule (approaching $15 soon in Massachusetts ). Only New Hampshire follows the Federal law ,but no one pays it. Every NH business starts employees at least at $10 ,and and within a few months they are at $13 due to competition for good employees.
        Yes the cost of living is high in this part of the world but it’s also a great place to live and it’s hard to attach a dollar value to that.

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