Why do the states that have a high minimum wage all have high cost of living?

Question

go ahead do any city with a higher minimum wage and then calculate cost of living change between that one and a lower minimum wage comparable city. and you will have to make more money to live. Is that just coincidence?

http://www.globalenergyjobs.com/ppj.nsf/CostOfLivingWeb1?OpenForm

http://www.dol.gov/esa/minwage/america.htm

Answer 1

Nope. No coincidence at all. In fact, John Stossel wrote his column on this topic today: "Sticking it to low-skilled workers" In the first hundred hours of the just-started session of Congress, the new leadership promises to raise the minimum wage. The Democrats won't be opposed by many Republicans. President Bush says he'll go along with a higher minimum wage if it's coupled with tax and regulatory breaks for small businesses.


Raising the minimum wage is definitely popular. Voters in six states approved higher minimums last Election Day. State politicians in both parties are practically drooling with eagerness to "help" lower-income workers. After all, how can you call the current minimum, $5.15 an hour, a "living" wage? Who can live on that?


We all want the poor to make more money. So if government can raise wages by decree, why are the popular proposals so stingy? What good is a measly buck or two extra? Let's really do something for the poor. Let's raise the minimum wage to $20 an hour. Even better, $50!


Or maybe we should take a deep breath and think like economists for a change.


The law of supply and demand, which operates whether we like it or not, says that when the price of something goes up, people buy less of it. That's why environmentalists like higher gasoline taxes, and anti-smoking activists back higher cigarette taxes.


The law of supply and demand works in the labor market, too. If government mandates a higher minimum wage, some workers will get a raise. Some. But something else will happen. Employers will hire fewer low-skilled workers. Others will let some current workers go. Some will choose not to expand their businesses. A few will close altogether. If an employer believes a worker creates only about $5.15 worth of value on the job, he won't pay $7, even if the government demands it.


Only 2.5 percent of all hourly workers make $5.15 an hour (or less; some jobs are exempt from the law), says the Department of Labor. "Minimum wage workers tend to be young."


Few of them stay at the minimum wage for long. As they acquire skills, their productivity rises and they command higher wages. According to a study done for the Bureau of Labor Statistics, "minimum wages have virtually no effect on the careers of most workers."


A small percentage of people do get stuck in minimum-wage jobs for a longer time. Since wages tend to rise with productivity, these are people whose productivity does not improve. A higher minimum wage will cost some of them their jobs. How does that help them?


Legal wage minimums kill all kinds of entry-level jobs, particularly those that would teach young people basic work habits and the benefits of effort. That's why there are no kids cleaning your windows at gas stations or working as ushers at movie theaters. Those jobs are extinct now because they are worth less than the legislated minimum. Who is helped by that?


Let's face it. The higher minimum wage is a feel-good law. A slight increase will pass because politicians and poverty activists will be able to say they have "done something" for the poor, while the victims of the policy go unnoticed. Those who can't find jobs because they produce too little are not likely to blame the law or the politicians who tried to "help" them. Then the resulting unemployment will justify expansion of the welfare state.


As George Mason University economist Walter Williams says, "It's tempting to think of higher minimum wages as an anti-poverty weapon, but such an idea doesn't even pass the smell test. After all, if higher minimum wages could cure poverty, we could easily end worldwide poverty simply by telling poor nations to legislate higher minimum wages."

Answer 2

Simple economics that you and I understand (we are unfortunately among the few). When the cost of a commodity, this time labor, goes up, the cost of living subsequently goes up. Supply and demand theory can be applied as well. It might seem nice to pay the poor more, but one has to ask, for what? If their labor is not worth more than 5.15, why must they be paid 7.50? If the wage of a job goes too low, no one will take the job, and the wage must increase so the job can be filled. The market works out minimum wages on its own. More government interference in this way leads us down that slippery slope towards socialism

Answer 3

The higher minimum wage is due to the higher cost of living. You've got it backwards. States raise the wage to keep the economy afloat. It's not coincidence, it's sense.

Answer 4

The economy is not that simple.
Nor is cost of living.
Supply and demand have a lot to do with that.

Yes,for starters.

Also,Id rather live in that kind of state than a red state with very little places to actually shop.I live in MA and the quality of life Im used to beats what I assume I'll find in much quiter areas.

Answer 5

it's two unrelated correlations. states that are more liberal tend to have higher minimum wages. and more liberal states tend to have higher costs of living because they tend to sit on the coasts where there's a lot of economic activity going on. while a higher minimum wage would lead to a higher cost of living, the differences in the minimum aren't large enough to explain those differences in the cost of living.

Answer 6

$5.75 an hour is not a lot of money.
the only domestic agenda the republicans have is to stop the implementation of prgrams and bills that will actually help the american people all for the benifit of the top 1%.

well youve heard they want to increase the taxes on those that make over 500,000 a year and give a tax break to the middle class. The ones that buy all the homes.
but of course gthey want to end spending there. but increase spending on their hobby in the mideast

Answer 7

The cost of living has always been high where I live.
The minimum wage hasnt always been one of the highest.

Answer 8

Raising the minimum wage causes employers to eliminate jobs, so it hurst everyone. It's just not a good idea.

http://en.wikipedia.org/wiki/Minimum_Wage

Answer 9

the cost of living went up long before the the wages did

Answer 10

I see you are unfamiliar with the concept of cause-and-effect relationships.

The cities had a high cost of living, so they raised their minimum wage so people who work can afford housing, food, clothes, etc.

Hope that helped you out.