The plight of the minimum wage worker has been thrust into the forefront of state and city politics nationwide. In the last two years, several states have all agreed to increase their minimum wage rates, including New York State (albeit only for fast food workers), San Francisco, Seattle, Los Angeles, and Washington D.C. Low-wage workers have been fighting for an increase in minimum wage to $15 per hour — over twice the national minimum threshold.

 

Approximately 20.6 million Americans work for minimum wage. The national minimum wage threshold in the United States is $7.25 an hour, a rate that has not been raised since 2009. In contrast, the Consumer Price Index has increased by 10.3 percent in that time period (year end 2009 – year end 2014). The CPI measures the average change over time in the prices paid by the urban consumer for goods and services.

 

US Map shows how much it costs to rent a two bedroom home

(communitychange.org)

Minimum wage earners in the cities listed above can earn up to double their counterparts in cities in the southeast and Midwest. However, they are not actually any better off. The cost of living in fast growing and highly desirable cities such as San Francisco, New York, and Washington D.C. is skyrocketing. Raising the minimum wage in those areas is long overdue as purchasing power is rapidly declining.

 

On the flipside, minimum wage earners from the southeast or Midwest can be restricted from moving freely around the country. The savings they have built up will not help them nearly as much if they decide to relocate to a more expensive part of the country.

 

According to a study conducted by Governing.com, with help from the Council for Community and Economic Research, minimum wage workers have the highest cost of living in the northeast, Hawaii, and Alaska. In contrast, minimum wage goes the farthest in the Southeast, Midwest, and Pacific Northwest. These findings are backed up by a Huffington Post survey which found Philadelphia, PA; Stamford, CT; and Boston, MA to be the three most expensive cities in the United States for someone making minimum wage. The three least expensive cities, according to the study, are Kennewick, Spokane, and Yakima, all located in the state of Washington.

 

It is too early to determine whether the recent increases in minimum wage will be helpful or hurtful to the workforce. The various plans will be implemented gradually and will not reach the goal of $15 an hour until between 2017 (Seattle) and 2021 (New York). Companies and governments are currently preparing for the extra expenses. In order to keep profit levels consistent, cuts in employment and higher prices may soon to follow wage hikes.

 

Should minimum wage be consistent across all states? Will the recent increases in minimum wage help or hurt local economies? Feel free to leave a comment or find me on Twitter @Andrew_Morse4