Minimum wage should be set at workers’ living wages


Minimum wage laws have come under scrutiny in recent months, with the two major Democratic presidential candidates advocating for some form of increase to the minimum wage. The #FightForFifteen movement has become a nationwide advocacy group, with members pushing for the minimum wage to be increased to $15 across the board.

The debate has divided people into three major camps: those who want the minimum wage to stay the same, those who want it to rise slightly and those who are pushing for the dramatic increase to $15 an hour.

Economic theory gives the general idea that drastic increases to the minimum wage — such as the 106 percent increase of the $15 minimum wage — will drag down the economy, not lift it up.

Based on economic theory, the raise will only help in the very short term, and then the cost of living will rise to compensate for the increased wages, also known as inflation.

However, while the minimum wage workers will be back at the starting block, those who work on a long term contract will be in trouble. This is because their wages are “sticky” and won’t change according to economic fluctuations in the short term.

Eventually these wages will “unstick” and go back up to the real spending power they had before. At this point, everything will go back to the way it was, and then what are we going to do? Raise the minimum wage again? The cycle will just repeat itself.

However, just because $15 isn’t the answer, doesn’t mean it shouldn’t be raised. The problem still stands that the current federal minimum wage is not sufficient to make a living.

When it comes to establishing a living wage for the nation, a new problem arises. The cost of living varies drastically depending on where you live in the United States. In the state of Florida, the living wage is $10.94 an hour; however in Washington D.C., it’s $14.78 an hour and in Ohio, it’s $9.39 an hour.

This magic living wage number is too hard to hit on a national level. If the government sets the federal minimum wage at the lowest living wage of any state, then there’s nothing protecting those who live in the states where the living wage is much higher.

On the other hand, if the government sets it at the high end, then there is the possibility for the economies of the states with lower living wages to be drastically effected by the increase, and not necessarily in a good way.

The solution is to mandate the states to set the minimum wage at their living wage. Make it a state-by-state wage, rather than a national wage. The federal government needs to establish a uniform way to formulate a living wage, rather than trying to hit such a moving target.