Source: Center for Economic and Policy Research

 

Minimum wage policy was part of the SOTU address last night. As it turns out, 20 states plus DC have minimum wages higher than the federal level. CEPR notes that:

As of January 1, 2014, 13 states raised their minimum wage, with California set to follow suit with an increase to $9 in July. Of these 14 state increases, 9 are automatic adjustments based on indexing the value of the minimum wage to the cost of living, while 4 (NJ, CT, NY, RI) are the product of either ballot-measures or legislative action.

Continues here

Category: Wages & Income

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4 Responses to “Cities and Minimum Wages”

  1. Internet Tourettes says:

    I am hoping that any increases in the minimum wage will lift higher salaries too. If the minimum wage acts as a wage floor it would be nice to get a salary bump given that salaries have been flat for about four years…..

  2. theexpertisin says:

    Maybe the claptrap over the minimum wage should be vested with municipalities and not inside the Beltway. With all the variances from place to place in our country regarding the cost of living and the cost of doing business, any minimum wage mandates should be at the local level – and result in local consequences, good or bad.

  3. willie says:

    It might be useful to separate the component arguments about minimum wage that are usually swirled together. First, the wages available from a particular task are limited, in other words, there really are only so many dollars in a burger available to pay wages. Remember when people were paid to pour sodas at fast food places- until it became cheaper to just have free refills. Technology and management decisions will determine how many employees are needed at any given wage level. But, things never just standstill. Second, whether someone is in poverty depends on a lot of factors only part of which is the wage that they receive. A lot of good people need more than they can earn, just to get by. Third, the Lee Iaccoca argument that he made to the unions in 1979- at $21 per hour I have no jobs, at $14 per hour I have a lot of jobs is still reality. Fourth, poverty is relative to what things cost. People who get minimum wage increases also face higher costs for things that they consume because the minimum wage drives up the costs included in every thing they buy. Consequently, for all the minimum wage increases, no real decrease in poverty has been observed in since 1964. Fifth, minimum wage increases, when large, do cause economic and cultural damage. In the mid-fifties, the minimum wage increased dramatically 1956 from $.75 to a 1.00 a 33% increase, and in 1961 from $1. to $1.15. The increase was the demise of the “Happy Days” diner and the car hop restaurants whose $.35 hamburgers could not compete with the fast food $.15 burger. The mom and pop diners became dinosaurs, and virtually extinct. The culture, many would agree, was changed not for the better. Sixth, some make decisions that aggravate their circumstance. In business school in 1969, I was analyzing Chivas Regal Los Angeles sales by zip code for a marketing class. Surprisingly, the highest sales were in the Watts zip code area of LA. The riots were just 4 years before, in 1965. Even people who do not appear to have anything, still want to buy the best. Today’s parallel are smart phones and branded athletic shoes. So, a person’s poverty is relative to what they expect they are entitled, to the cost of living in the area they inhabit, and personal choices about how they spend their money. Since all the components are valid, arguing or in the case of the Daily Show, smug ideological conceit does little to solve the real problem. How do you get resources to people who need them and to what level of economic status should they be supported?

    To provide help to individuals, the government should establish a living income standard for each individual in the country. Every individual should supply an income return showing all the sources of income and all sources of subsidies received. This in no more intrusive than today’s income tax system. The income panel could then determine the level of assistance. If a person has a job that pays $5, then they would receive help as long as they continue to work. Rather than restricting jobs, this would create a job for each person looking for work, it just would not make employers in low wage industries the solution to a problem.