Minimum Wage

My apologies for not posting for quite some time, however, life has been just a little bit too busy to sit down and write. Anyway, today there seems to be enough time to put together a short discussion of a “hot” topic with the powers that be in D.C., that is, the minimum wage. As usual, there are two, or more, sides to every topic. The one side insists that raising the minimum wage to $15/hour would pull the minimum wages earners above the poverty line and, in general, be a substantial benefit to the “working class,” however that category is defined. The other side counters that essentially doubling the minimum wage will put even more small businesses out of business, which would result in a tremendously negative impact on low wage earners. As they say, earning something is better than earning nothing.

Here’s my take. In a country with 50 different states, large cities, small cities, medium sized cities, and many rural areas, why do we even consider such a thing as a federally mandated minimum wage? Whether you fall on the side of the current wage being too low or you think that doubling it would be too high, can we all just a agree that a one-sized fits all number is, quite frankly, not a reasonable approach? For the sake of argument, let’s use $10/hour as a starting point. Would that value be a good minimum wage in rural Nebraska where the cost of living is quite low? How about in Chicago where the cost of living is considerably higher? These two questions make the case for the Federal government to defer to the states, or even localities. There is really no reason to mandate that businesses located in considerably different economic environments, with vastly different costs of living, pay their hourly employees the same wage. The politicians should at least give it some thought before charging ahead on what could prove to be a disastrous policy.