Is it actually Livable? By: Collin Crowel
In her book, Nickel and Dimed, Barbara Ehrenreich argues against the fairness of minimum wage. Some argue that Minimum Wage should be raised to as much as $15.oo an hour, while on the other side of the argument believe that there should be no minimum wage and we should allow the market to correct itself. Evidence certainly suggests that this issue has been dealt with differently by States within the United States.
It is important to note that while states can have a lower minimum wage than the Federal Government, they must follow the highest regulation
In looking at Minimum Wage's fairness it is important to take into account the varying cost of living from state to state. Below you will see a graph displaying States minimum wage (x) in relation to the cost of living (y). You will also see a trend line, and a red marker displaying the average cost of living and the federal minimum wage. There is value of "0.1396" displayed as "R²." It is a numerical value that is used to show how strong the relation of the trend line is to the data points, always occurring above zero and below 1. The low value of "0.1396" shows that there is a weak correlation between the data found, and the trend line, meaning that the relationship between Minimum Wage and Cost of Living is at best weak.
Amazingly enough Minimum Wage and Cost of Living only have a weak positive linear relationship, meaning that usually as Cost of Living increases so does Minimum Wage, however, with reference to the graph above it is apparent that some states have a higher minimum wage than what seems necessary, and some have one that is much lower, and small percentage appear to be right where they need to be.
Important background knowledge to Note:
- The state minimum wage rate requirements, or lack thereof, are controlled by legislative activities within the individual states.
- Federal minimum wage law supersedes state minimum wage laws where the federal minimum wage is greater than the state minimum wage. In those states where the state minimum wage is greater than the federal minimum wage, the state minimum wage prevails.
- There are 3 states than have a minimum wage set lower than the federal minimum wage. There are 23 states plus DC with minimum wage rates set higher than the federal minimum wage. There are 19 states that have a minimum wage requirement that is the same as the federal minimum wage requirement. The remaining 5 states do not have an established minimum wage requirement.
- The District of Columbia has the highest minimum wage at $9.50/hour. The states of Georgia and Wyoming have the lowest minimum wage ($5.15/hour) of the 45 states that have a minimum wage requirement.
- Note: There are 10 states (AZ, CO, FL, MO, MT, NV, OH, OR, VT, and WA) that have minimum wages that are linked to a consumer price index. As a result of this linkage, the minimum wages in these states are normally increased each year, generally around January 1st. The exception is Nevada which adjusts in the month of July each year. Effective January 1, 2014, 9 of the 10 states increased their respective minimum wages. The exception was Nevada.
Above is an illustration of NLIHC data, showing how many hours at federal minimum wage Americans must work to rent a one-bedroom apartment in each of the fifty states today. Obviously this shows the need for varying minimum wage per state.
In conclusion the minimum wage of the United States should be an issue addressed within State Governments, rather than federal, as the cost to live varies greatly from state to state.
"Cost of Living by State." Cost of Living by State. Top 50 States. Web. 11 Dec. 2014. <http://www.top50states.com/cost-of-living-by-state.html>.
Landy, Benjamin. "Graph: Where Can You Live on Minimum Wage? : Blog of the Century : The Century Foundation." Blog of the Century. The Century Foundation, 3 June 2012. Web. 11 Dec. 2014. <http://tcf.org/blog/detail/graph-where-can-you-live-on-minimum-wage>.
"Minimum Wage Laws in the States." Wage and Hour Division (WHD). United States Department of Labor, 15 Sept. 2014. Web. 11 Dec. 2014. <http://www.dol.gov/whd/minwage/america.htm>.
"Minimum Wages for Tipped Employees." Wage and Hour Division (WHD). U.S. Department of Labor, 15 Sept. 2014. Web. 11 Dec. 2014. <http://www.dol.gov/whd/state/tipped.htm>.