A minimum wage means different things in different states

Stephen Richer Law Student, University of Chicago
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Negotiating a wage can be tough. Negotiating a wage for 1.5 million workers can be even tougher. And so it is that after weeks of debate, Congress continues to kick the can down the road on the minimum wage. Harry Reid unsurprisingly blames Republicans for impeding progress, but the story is not so simple, and the so-far unsuccessful federal wage hike makes one wonder if the minimum wage should be a federal, nation-wide issue.

To raise the federal minimum wage by 39 percent from $7.25 an hour to $10.10, Reid needs 60 votes. The winning calculation adds every Senate Democrat (53), plus both Independents (2), plus five Republicans (of 45). But several Democrats have already defected or expressed unease: Mark Pryor (D-AR), Tom Carper (D-DE), Mary Landrieu (D-LA). No Republicans have jumped to help Reid.

One Republican, however, has offered compromise. Susan Collins (R-ME) is willing to raise the minimum wage (and so too might some of her Republican colleagues), but she’s not willing to go up to $10.10. Reid — ever the bipartisan negotiator — rejected this immediately. As Reid told Politico when asked if he would consider any options below $10.10:

“No, there are none. Nope,” Reid told reporters following a minimum-wage rally with union members and other Democratic leaders. “The reason we picked that number, $10.10, gets you out of poverty — $10 doesn’t. $10.05 doesn’t. We didn’t pick that number just to be fun.”

Is it really that simple? A silver bullet? One wage to rule them all? One wage that will have the same costs and benefits across the country?

Consider Utah and New York. They’re not not financial equivalents. Utah has 62,000 private, non-farm businesses; New York has 522,000. Utah’s average per capita yearly income is $24,000; New Yorkers average over $32,000. The living wage (a calculation for a fixed standard of living) in Sandy, Utah is $9.43 an hour. In New York City, that number is $12.75 — 35 percent above Sandy.

If the Reid-wage passes, minimum workers in Utah will make almost $1 above the living wage. New York minimum wage earners will be $2 short. Nor would businesses be affected similarly. New York’s current minimum wage is $8.00 an hour  If the Reid-wage is passed, New York minimum wage employers will be hit with 25 percent more costs. In Utah — state minimum wage of $7.25 — employers of minimum wage workers will face a 39 percent increase in labor costs, a significantly more difficult situation than New York’s.

A blanket solution seems especially unwieldy when states can deal and have dealt  with the minimum wage through their respective state legislatures. 21 states and Washington, D.C. have state minimum wage laws higher than the federal minimum wage. California is at $8.00. Florida is $7.93.

Clearly Reid is passionate about raising the minimum wage. But this passion also exists on the local level. New Hampshire is on the road to a higher state-level minimum wage; so too is Vermont. Minimum wages are focused still further through implementation at the city level, and 125 municipalities have enacted “living wages” that apply to government contractors. The scalpel is getting a lot of use, so should we really let Reid and other Congressional Democrats use the sledgehammer to address this issue?

Federalism recognizes that no two states are the same. The same can be said about many of the businesses and workers of a state. Instead of addressing this issue from a one-size-fits-all, 1,000 foot level, let’s instead hand this one to state legislators who know are fully aware of their particular economic situation.