There’s a reason no one shops at a clothing store for one-size-fits-all garments. That concept might work OK for a baseball cap or tube socks, but not much else. Finding what fits best is an American quest, whether it’s shirts, shoes or how we manage our public and private institutions.
Thus, government programs and concepts that may seem ideal for one region of the country don’t always work the same everywhere. What fits a giant head in New York or a tiny foot in San Francisco isn’t always going to be ideal for Dallas, Denver or Gainesville.
And this is why the push from some labor leaders and political leaders to nationalize a $15 per hour minimum wage for restaurant, retail and other workers could spark an economic tsunami in many areas of the country. Like this one, for instance.
This is, after all, a huge country. Some seem to forget that when they compare U.S. policies to less complex, relatively homogenous European nations that provide more domestic and economic benefits at much higher tax rates. Well-intentioned egalitarian concepts that might work in tiny, homogenous nations like Denmark or Switzerland don’t always travel well here across state lines.
We are, at times, one nation and at other times separate states. When it comes to our constitutional rights and civil liberties, we are e pluribus unum. But the country’s economy seems to work best with regional differences in mind.
The United States has a national economy, but it consists of hundreds of regional economies in states and metro areas with their own character and individual needs. This vast, intricate network of economies is woven together in ways that can’t be governed effectively by one rigid set of policies from Washington.
When it comes to raising the minimum wage, remember that if someone earns a higher salary, that money has to come from somewhere. A hike in the smallest paychecks can force businesses to drive up the cost of goods and services to cover them. In some cases, jobs may be lost if those employers can’t afford the extra payroll costs. Either outcome would ultimately hurt those such a raise is aimed to help.
Many defenders of the $15 figure claim these fears are overblown and that a hike in the lowest wages wouldn’t have much of a negative effect. But that likely depends on where you live. Common sense and research shows the impact would vary greatly from region to region.
A recent study published in The New York Times makes this clear. The newspaper’s story put the proposed $15 an hour minimum wage alongside the median wage in several U.S. cities to see how much a higher pay floor would drive up costs. Not surprisingly, cities such as New York, Washington and others where salaries and the cost of living already are sky-high would suffer the least effect. Paying someone at a burger shop there $15 an hour to help make ends meet would only slightly raise prices.
But in many Sun Belt cities, Atlanta among them, the median wage is much lower, matching the modest cost of living there. The $15 an hour standard would drive fast-food workers’ pay beyond the salaries of many other jobs. The accompanying rising tide in payrolls could swamp small businesses.
Cities in particular where tourism is king employ a high number of lower-wage workers in the hospitality industry who would be affected. Raise all those salaries at once in a metro area with tens of thousands of such jobs and those industries would be devastated.
An April article in Fortune shows 42 percent of American workers make less than $15 an hour in a variety of different industries. So it would be absurd if the 17-year-old kid serving fries at a summer job made more money than the paraprofessional from a local school he was serving. Or the guys working on the air conditioner out back. Or the office secretary, nursing home assistant or a city’s mayor on lunch break.
Many minimum-wage jobs are entry-level, most meant to serve as a workplace training ground, not as a career choice. Yet the slump in employment at higher levels nationwide forced many workers to accept such positions on a more permanent basis. Many are adults who need a living wage to get by, not just a little cash for gas and pizza. But that scale still needs to be realistic and based on the pay of other jobs in a particular area.
It would seem, for this issue and others, local control seems to be the best answer. Some cities where the economies can withstand a higher minimum wage have raised them, including Seattle and San Francisco. Regions where such a hike would be more harmful could raise them a bit less or not at all. What fits in one doesn’t for another. If someone want to make more, they can move, but they likely will pay more for rent, clothes, gasoline and their own burger and fries at lunch. It will always be a trade-off, no matter where you live or what you make.
Since federal action on this issue in this age of gridlock is unlikely, that solution will probably remain in place for some time. Eventually our leaders may learn the lesson of the tube sock and give up trying to force inflexible policies on everyone regardless of their effect.