Wednesday, October 24, 2012

Minimum Wage

A visual representation of minimum wage laws throughout the United States. The federal minimum is $7.25 an hour. Unsurprisingly, the areas of the country that have higher minimum wage laws are typical Democratic strongholds of the Northeast and the West. Some states are a little more surprising like Arizona, Montana, and Florida who are each about 40 cents an hour higher than the federal minimum. That's an $832 per year difference.

A person who works full-time at minimum wage would earn $14,790. After payroll taxes (subtracting 7 percent), then it comes to $13,754. If nothing else, I wish there was an exemption to payroll taxes for the first $15,000 dollars in income for everybody just like there is one for every dollar earned over $106,000. That would make it significantly more progressive. Or we could just remove the cap on the upper end, which would completely fund the accounting fiction of the Social Security Trust fund forever more, unlike raising the retirement age.

In Canada, the province with the lowest minimum wage is Alberta at $9.50 an hour, which comes out to $19,780 a year for a full time employee. That is more money than the highest US minimum wage in Washington state at $9.04 an hour. The highest in Canada is Nunavut where it is $11.000 an hour, but I wouldn't be surprised if there were many Inuits working under the table for much less than that. In addition, everyone in Canada has health care, which is hard to find for low wage jobs in the US. No having to work at Starbucks for the health care.

Fun fact: Mayor Bloomberg vetoed a bill that would have raised the minimum wage to $10 an hour for New York City. It would have created a city-state divide in minimum wage laws.

1 comment:

  1. There are other city/state divides in minimum wage laws. Santa Fe in New Mexico has a minimum wage of $10.29/hr. They call it "living wage". Just an FYI. :-)