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Are minimum-wage workers doing well anywhere?

9/4/2019

Are minimum-wage workers doing well anywhere?

One of the arguments often launched against a higher minimum wage is increases may make sense for some states, but not others. The idea here] is the cost of living in highly populous states like New York, Massachusetts, New Jersey or California is greater than it is in places like the Midwest or Deep South. However, the reticence of lawmakers to mandate a living wage is a major issue in just about every state nationwide.

There is not one state where the minimum wage even reaches half of what would be considered the regional "living wage," which is based on typical expenses like food, medical care, housing, transportation, taxes and more, according to new research from Oxfam America. In fact, the place with the highest ratio of minimum wage to living wage is Washington D.C., where the current $14 minimum wage is equal to about 44% of what it actually costs to live there. Only eight other states are even north of 40% by this metric.

Conversely, neighboring Virginia comes in at the lowest ratio of minimum wage to living wage, at just 26.1%, thanks to the state not having a minimum wage of its own, and instead abiding by the low federal level of just $7.25 per hour, the report said. However, the Old Dominion State isn't alone in its extremely relative low minimum wage - 17 other states provide minimums that amount to less than 30% of the actual living wage.

The heart of the issue
Even with the District of Columbia ranking so highly, it's worth noting that two adults working full-time minimum-wage jobs would still have to take on overtime every week to meet the financial needs of a family of four in the city, according to Vox analysis of the Oxfam data. Moreover, that comes with the fact that Washington, D.C., is actually the most worker-friendly part of the country, with numerous city ordinances requiring equal pay, paid family leave and sick days or other benefits that aren't necessarily widely available elsewhere.

Likewise, the second-highest ranking state in the country in terms of worker friendliness was California, where a higher-than-average and rising minimum wage still requires two adults to work about 50 hours a week to make ends meet, the report said[That's friendly? Seems odd. Very surprising. I'd elaborate a bit more as to why it's friendlier than other states, given California has a really high cost of living relative to others]

Broadly speaking, states in New England were the most likely to have stringent worker protections in place, followed by the mid-Atlantic region and states on the Pacific Coast. After that, there was a significant drop-off between this group and the next-highest ranking region - the Great Lakes.

Why it's important
All this comes at a time when numerous states are raising their individual minimum wages but the federal level remains stubbornly at $7.25, where it has been since 2009, according to the Frederick News-Post. The U.S. is now in the longest period in history without a minimum wage hike, and inflation means $7.25 has far less purchasing power today than it did more than a decade ago.

With all this in mind, it's important for companies to make sure their own salary offerings exceed minimum-wage rules for every employee. Doing so helps to attract and retain talent on an ongoing basis.