National Paychecks
I talked yesterday about the minimum wage, why both progressives and big business want a big increase in it, and why that’s a bad idea.
Let’s take that a step further today and talk about why a national minimum wage at all may be a bad idea. It has to do with the cost of living.
About a decade ago, I was asked to interview for a job on the federal payroll through the National Archives. The fact that I’m talking to you today tells you I didn’t get the job, which is not important to the story.
One of the factors I was considering, naturally, was salary and benefits. I was told it was a certain category of job…something that sounded like “administrator level 2B”, a federal classification for similar work. The salary was, to be honest, amazingly good for jobs in Iowa. Then I learned why.
There were about a dozen other jobs like this one across the country. And since they were all tied to the federal government, meaning everyone–regardless of merit, regardless of term of service–got the same pay. There were step increases after five or ten years, but basically, the wage for this job was the same whether you were in Iowa, California, New York, Michigan, or Kansas.
Clearly, the salary the Iowa or Kansas person received was going to go a lot farther than that same salary in a metro area of Michigan or California. But the system doesn’t take that into account.
Same with the minimum wage. If someone working at a fast food place in Iowa gets $15 per hour, that’s going to have a lot more purchasing power than the same person making $15 per hour in New York City. Yet a national minimum wage ignores that, and treats everyone the same.
So instead of asking how high the minimum wage should go, perhaps we should be asking if it’s time to get rid of a national minimum altogether.
