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mandatory minimum
Cost of Living Varies Wildly by State

In the increasingly likely event that Hillary Clinton wins the White House in November, Washington is likely to be once again consumed by a battle over whether or how much to raise the federal minimum wage. (While the national Democratic Party has endorsed a $15 per hour, the candidate says she favors raising it to $12—a position that disappointed the liberal wing of her party even though it is a dramatic upping of the ante from President Obama’s last bid, for $10.10).

Recent data published by the Bureau of Economic Analysis, however, highlight the critical shortcomings of a federalized one-size-fits all to the wage floor. The New York Times reports:

Spend enough time traveling around the United States and you’re bound to notice a dramatic variation in what a dollar can buy.

Everything from the price of a cup of coffee to the cost of a house can fluctuate between, and even within, states.

A gallon of regular gas costs $2.74 in Hawaii, but just $1.82 in South Carolina.

The average Connecticut resident pays twice as much for electricity as the average Tennessee resident.

A $7 lager in San Francisco might cost you half as much in Chicago. A $5 hamburger in California may be a dollar cheaper in Nebraska.

Tuition at public colleges varies by orders of magnitude.

What’s more, these data don’t even address the dramatic differences in cost of living costs within states. High-cost metropolitan areas with strong labor markets, like San Francisco and New York, might be able to absorb minimum wage increases without significant job loss. But for economically depressed areas with high unemployment and low business investment, a dramatic hike could be devastating. It’s not a coincidence that most of the support for a $15 minimum comes from high cost-of-living blue states, and especially from the economically prosperous deep-blue urban centers within those states.

A national doubling of the minimum wage would amount to a gratuitous economics experiment on the most vulnerable regions of the U.S. A better approach is to allow counties and municipalities to set their own minimum wage levels. But a better approach yet would be to leave the minimum wage alone and focus like a laser on job creation, as well as other avenues for reform—like tax credits, licensing, and housing—to increase the fortunes of Americans at the bottom of the economic ladder.

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  • Jim__L

    Trying to solve this problem on the Federal level is, to be blunt, extremely stupid.

    If Urban Elites want to hike the minimum wage in their own home cities, by all means let them! The rest of the country needs to be able to say, “No Thanks”.

    This is why we ended up with Trump. He fights.

    • Fat_Man

      Trump does fight. Sadly, he seems only to hit himself.

  • Andrew Allison

    Isn’t the news here that even the NYT acknowledges what an utterly stupid idea a nationwide minimum wage is? It’s not just that the cost of living varies widely within and bewteen states but that if the cost of labor exceeds its value, the job will eventually go away. Surely it’s obvios that, even if minimum wages are set locally, the labor-replacement technology being developed in anticipation of significantly higher minimum wages will be utilized narionallly. The perversty of the minimum wage is that it taks jobs from those who need them most.

  • Fat_Man

    Forget Mississippi. What do you suppose costs and wages are like in a place like Binghamton, NY? Out side of a few state employees, how many folks in a town like that make $15/hr? The bubble surrounding our media elites and intellectuals is so thick that as little information reaches them from Binghamton as from Ulaanbaatar. Check that, more of them have visited Ulaanbaatar, than have visited Binghamton.

    • f1b0nacc1

      Have you BEEN to Binghamton? I suspect that Ulaanbaatar would be a better choice…(grin)

      • Fat_Man

        Certainly for the writers and readers of the NYTimes.

        • f1b0nacc1

          I lived in Binghamton for a while when I was in grad school….I am not even sure that NYTimes readers or writers deserve that…

  • Blackbeard

    From Alinsky’s Rules for Radicals: RULE 4: “Make the enemy live up to its own book of rules.”

    The Democrats insist that there is no downside whatsoever to a $15 an hour national minimum wage. Why shouldn’t conservatives call them on it? Will Hillary, and the Democratic Party, commit to enacting a $15 an hour minimum wage within 30 days of inauguration? The Republicans can promise not to filibuster or otherwise block this action and provide just enough votes to pass it if the Democrats don’t actually have enough votes after the election. The would be no exemptions, no delays and no special deals for unions. Over the following ten years the minimum wage would rise by a dollar a year until it reaches $25. After that it would increase annually with inflation.

    Wouldn’t this put Hillary in a tough spot? Either admit that they don’t really believe the rhetoric they’ve been spouting or follow through and suffer the consequences.

    • FriendlyGoat

      That’s a dandy idea. I’ll be waiting for those Republicans to follow right through with their help.

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