Finding a wage formula
Our United States are not a one-size-fits-all operation. Never have been. That’s why the discussion about minimum wage is so frustrating. Talk in Washington, D.C., of a $15 per hour federal minimum wage by 2025 raises hope in some, fear in others, as the balance between employee and employer comes into play.
Federal minimum wage is $7.25, by the way. That is $1.50 lower than West Virginia’s, so maybe the federal government does have some catching up to do. But more than doubling that figure in five years is a job-killer in the short term. Imagine being an employer who has to account for that right now.
There should be a compromise option if lawmakers understand what applies in California rarely applies in, say, West Virginia or Kentucky.
What if, rather than mandating a set figure as the minimum for each state, we set a minimum wage that follows a formula to fall in line with cost of living there?
To dramatically oversimplify it, let’s use the cost of living index produced by bestplaces.net. With the U.S. average being 100, West Virginia lands at 78.1. Therefore, if Washington has determined a $15 minimum wage aligns with that national average, West Virginia’s minimum wage would be about $11.72. Call it $11.70, for an easy round number.
U.S. Sen. Joe Manchin, D-W.Va., suggests an increased minimum wage — if it is necessary — in West Virginia should be closer to $11.
“I’m supportive of an increase that’s responsible and reasonable, and in my state that’s $11,” he said in early February.
He is facing harsh criticism for that, of course. Many seized on the $15 figure without thinking about its consequences. It’s understandable. For the tens of thousands of Mountain State residents earning minimum wage, the idea of making $6.25 more per hour by 2025 is appealing.
But again, how are employers — particularly smaller businesses — supposed to come up with that kind of money while our state’s economy struggles? We’re not talking just about the effects of a pandemic, here. We’re talking about the failure to latch on to that “recovery” we heard so much about elsewhere just a year ago.
I suppose it’s possible all those workers with more money might in turn spend more and help employers generate enough revenue to cover the increased cost. Would that be trickle-up economics?
In reality, the more likely outcome would be that some workers would lose their jobs, while others spent at least the short term using the extra money to pay off debts accumulated while they tried to keep their heads above water. The spending would have to come later, and maybe not in time to save some businesses.
Finding a formula that does better for workers without crippling employers is essential, and the answer is not going to be the same in every state. Perhaps the federal government can start by developing a standardized cost-of-living assessment for each state and a matching formula to help states determine their own minimum wages while meeting federal standards.
Manchin is right to avoid going all-in on $15 everywhere. Maybe he and some of the others who understand the need for a more reasonable approach can find a compromise that truly serves ALL Americans.
Christina Myer is executive editor of The Parkersburg News and Sentinel. She can be reached via e-mail at email@example.com