A State-Level Approach for Fairness in a Diverse Economic Landscape

Federal vs. State Oversight

We have seen more lately in the news that the federal minimum wage needs to be at least $15.00/hr to support a living. The cost of living is different depending on where a person lives. Do we really need a minimum wage set by the Federal Government or can the state oversee a program that would insure a fairness to all? When the Fair Labor Standards Act of 1938 (FLSA) was signed by President Franklin D. Roosevelt it only affected twenty percent of the labor force according to U.S. Department of Labor at that time. This act was to help people get out of the Great Depression and to prevent works from being taken advantage of. During this time, men, women and children were being asked to work for pennies a day for long hours in factories. When looking at the jobs that pay minimum wage today we think of fast food restaurants, retail shops, and gas stations.

Consumer Impact and Job Market Dynamics

Minimum wage jobs should be here to help you get the experanse need to advance into a career, pay for college or trade school. In today`s world, you see all age groups working in minimum wage jobs, not just the young kid behind the counter saving up for their first car or college. The Bureau of Labor Statistics reports that only 2.3 percent as of the end of 2017 work in jobs that pay at or less than minimum wage which is down from 2016`s 2.7 percent. When looking at the data from 2017, The Bureau of Labor Statistics found most people that are making minimum wage are non- married African American or black women under 25 without a high school diploma. Most of the time they work part-time in jobs that they could earn tips to compensate for the low minimum wage earnings.

If minimum wage is raised to $15.00/hr will that affect the consumer and could it also affect the job market in the area? Look at California on their way of raising the minimum wage to $15.00/hr. According to Michael Saltsman at Forbes Magazine, by 2022, 400,000 jobs will no long exist. Harvard Business School and Mathematica Policy Research found that at least some of business closings and the lay off of staff in the Bay Area was due to an increase of minimum wage and some companies even left the area. Research was also done by Berkeley in the Fresno County data was taken from the Census Bureau`s American Community Survey and from other Census and U.S. Bureau of Labor Statistics datasets along with economists (Reich). Fresno County was chosen because of its high poverty level.

Consumer Costs, Employment Trends, and Regional Disparities

From this study Berkeley did they found that California’s economy has recovered back to the pre-recession (2007) levels. The effects of raising the minimum wage had on the workforce was it increase pay for undereducated and some people that had some college background. Most of the jobs that people are that pay minimum wage are part time. They still will not be receiving full time benefits like health care, 401Ks and any other benefits that a full time job would allow for. When it comes to business and the consumer Berkeley looked at three types of industries retail, restaurants, and healthcare this three make up around 40% of the private sector. The increase cost in pay will be even out with the decrease in employees leaving for better paying jobs. The increase cost will roll over to the consumer at a 0.6% rate over the next five years. The research also shows their will only be a 0.1 increase in employment by 2023.

In conclusion, minimum wage needs to be handled at the state level where the local representative can determine what is justified as a living wage. According to bestplaces.net, if a person in Dallas, Texas made $65,000 a year it would be equivalent to $117,748 in Los Angeles, California.The cost of living differs from state to state so in a state where the cost of living is lower a person can live comfortable on $15.00/hr, but in a state where the cost of living is much higher a person may just be getting by. The cost of living in Texas is much cheaper than some other states like California. Texas has minimum wage that is the same as the National level at $7.25/hr, $290.00/week, $15,080.00/year and has not changed since 2008 (Texas). A family (two parent home with two children) can not live on this pay alone most of the time it takes two parents working fulltime to make it work.

References:

1. Characteristics of Minimum Wage Workers, 2017 : BLS Reports. U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 1 Mar. 2018, www.bls.gov/opub/reports/minimum-wage/2017/home.htm.
2. Cost of Living Comparison: Compare Dallas, Texas to Los Angeles, California, www.bestplaces.net/cost-of-living/dallas-tx/los-angeles-ca/65000.
3. Ramage, John D., et al. Writing Arguments: a Rhetoric with Readings. Pearson, 2016.
4. Reich, Michael. Effects of a $15 Minimum Wage in California and Fresno. Institute for Research on Labor and Employment, 11 Jan. 2017, irle.berkeley.edu/effects-of-a-15-minimum-wage-in-california-and-fresno/.
5. Saltsman, Michael. Why The $15 Minimum Wage Will Cost California 400,000 Jobs. Forbes, Forbes Magazine, 15 Dec. 2017, www.forbes.com/sites/michaelsaltsman/2017/12/15/why-the-15-minimum-wage-will-cost-california-400000-jobs/#70204dd143b9.
6. Texas Minimum Wage for 2017, 2018. Federal and State Minimum Wage Rates for 2018, www.minimum-wage.org/texas.
7. U.S. Department of Labor. Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum Wage, www.dol.gov/general/aboutdol/history/flsa1938.