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Should The Minimum Wage Be The Same In All States?

Holly Hicks,

Should The Minimum Wage Be The Same In All States?

While there is a current federal minimum wage set nationwide, numerous states set their own standards. There is also a great deal to be said for this and certain politicians and members of the public would like to see it be uniform across the country.

There is an overwhelming case for it not be, due to major differences occurring from state to state both in terms of taxation and extremely different costs of living. As an example car insurance in New Jersey can be up to double the cost of that found in Virginia for exactly the same coverage. Such differentials multiplied across everything that you purchase can amount to very different overall costs-of-living from state to state. This can mean that the minimum wage can go much further in one state than another, but equally so it can mean that it goes far less further in another state.

Accordingly there are state by state exceptions and as an example in some states such as Montana it can be set as low as four dollars per hour provided that the business is turning over less than $110,000 per year, but for businesses turning over $110,000 a year the minimum wage is set at $7.80 per hour. Numerous states adopt a similar approach, however the minimum labor rates do vary considerably from state to state and you could find that in a nearby state the minimum wage for businesses turning over less than $110,000 is $5.25 as an example.

While this type of pricing can be seen to be helping out small businesses to help get them going it can also give them a headache that when they reach this threshold that they are faced with a dramatic increase in the minimum wage that they have to pay out, which is undoubtedly a hard hurdle for a lot of businesses to overcome particularly in the current economic climate. In such circumstances one could argue that at least within the state there should be some consistency with no such threshold set up at the $110,000 mark, in order to put all businesses on an equal footing, however many politicians and members of the public would argue both for and against such a change. It is a sort of Catch-22 as many large businesses would love to be paying the much lower minimum wage rates that small businesses do in such circumstances as described above. However should big businesses ever be able to push through such a change then it would undoubtedly push many people far below the nationwide poverty line, if ever allowed to happen.

Also in numerous states the Federal minimum wage replaces the states minimum wage if it is higher. Currently the rule is that the federal minimum wage law supersedes the state minimum wage laws when the state minimum wage is less than the federal standard. This seems to level things out somewhat, however there must be case to be argued that all minimum wage rates should be set by the federal authorities and not on a state-by-state basis to avoid the large discrepancies that currently exist such as Washington with a minimum wage of $9.19 and Georgia with just $5.15 per hour.

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