Should The US Minimum Wage Be Set Differently In Each State?

A nationwide debate is currently taking place in America where one side wants workers to earn $15/hr, which will give them greater economic movement, the people who will see an increase in their wages are much less likely to use government assistance and will allow them to have a more prosperous life. On the other side of the debate, it is argued that this increase will cause an increase in the prices of products, thus creating less profit for the business and the result may be a loss of jobs.

Whichever side of the wage debate you find yourself on, the issue is much more nuanced. There are many minor debates that need to take place before we can make an educated decision on this topic, such as: Cost of living in each US State, will a lower minimum wage create more dependence on government programs, what can minimum wage workers currently afford and the effects this has on those earning the current federal $7.25 minimum wage.

While the Federal minimum wage is currently set at $7.25, there are several ways how some companies in certain states are able to pay less than this: businesses that are not covered by the FLSA, Fair Labor Standards Act, workers who work away from the place of business, newspaper delivery workers, small farm workers and babysitters are just some of the areas in which you may not be able to obtain a minimum wage.

However, due to the differences in the costs of living in each of the 50 states, living in a state with a higher cost of living may require a much more substantial living wage than another state where the cost of living is much cheaper, but this also raises several more questions that will need to be answered before any changes can be made to the current system, they include:

• Should a worker be paid less for living in one state compared to another?
• Would this change force people to move across state lines in the hope of higher wages?
• Nationwide businesses will have to pay workers differently in each state, depending on where the particular branch of the company is located.
• Should workers be paid at a different rate for doing the exact same job?
• Workers may become unhappy about being payed less than someone for living in a different state.

There are positives to this outlook on the minimum wage argument however, with the cost of living, raising a family and even things like varying gas prices (should you travel for work), some people in the workforce may require a higher rate of payment to sustain themselves, due to these differences. The state-enforced minimum wage varies from $10.50 in DC to nothing in where 6 states either have no minimum wage or it has been repealed (Alabama, Louisiana, Mississippi, South Carolina, Tennessee and New Hampshire where it was repealed in 2011).

The cost of living varies from state to state, meaning people living in some states may need a higher rate of pay than others in order to put food on the table. For example, the cheapest state to live in is Mississippi, which has a cost of living index score of 84.4, meanwhile the state with the most expensive cost of living is Hawaii, with a living index score of 167.3 - so should someone earn a higher rate of hourly pay when living in Hawaii as opposed to Mississippi, as it costs much more to live in this state?

Let's use this as an example, each of the 50 US States has a McDonald's, from North Dakota with 29 stores to 1,492 in California, according to this 2016 report. Taking these two states, where the cost of living in North Dakota is scored at 96.7 compared to California's index score of 142.7, meaning various goods such as: buying a house, buying groceries, clothing and travel, will be considerably higher in one state compared to another, so should the McDonald's worker living in California, make a higher rate of pay than someone working the same job who lives in North Dakota?

Currently, the federally mandated minimum wage of $7.25, with one person working the US average of 1,783 hours per year, will see a rough income of $12,962.75 - only around $900 above the US poverty line for a single person. The poverty line increases depending on how many people you have working in your household. Should someone working that many hours per year be just hovering around poverty? Personally, my opinion is an increased minimum wage, just unclear on how to do so.

In a report published by the National Low Income Housing Association, it was found that a single person working a full-time, minimum wage job will only be able to rent in just 12 US Counties, not even 12 states, COUNTIES. To put this information into perspective, California has 58 counties and Florida has 67. Let's take Vermont, which has 14 counties, there are more counties in this single state - which only contains 0.19% of the US population - than the number of counties, when receiving minimum wage, that you can afford to rent a place of your own.

Lastly, should America increase the minimum wage then it will be for the better, the most important upside will be more people coming off of government programmes like welfare, meaning more federal money will be saved to be spent elsewhere. Increasing the minimum wage will also allow for more money to enter the economy as the public will now have increased spending power and be more inclined to spend. Increasing the minimum wage is the correct way to go, it just depends if it should be set differently in each state, or should it be increased to the same level for the country as a whole.

SOURCE: Cost Of Living Index Scores By State