Geography and the Minimum Wage | Newgeography.com
. . . depending upon the area's wealth, prosperity, and economic activity.
Watkins provides an excellent analysis of how and why minimum wage increases hit some areas harder than other.
"Most commentary on California’s decision to increase the state minimum wage to $15 over time is either along the lines of it being a boon to minimum-wage workers and their families or a disaster for California’s economy. Neither is accurate. Different regions sill see different outcomes. Central California, the great valley that runs from Bakersfield to Redding, once again, will bear a disproportionate burden.
Some workers’ income will increase, but hardly enough to afford a standard of living that most readers would find acceptable. At 40 hours a week and working 52 weeks a year, the minimum-wage worker will earn $31,200 a year before taxes. Try living on that in San Francisco or Santa Barbara."
Fortunately most minimum wage earners do not have to try and live on $31,200 per year, they are second, or third earners in the household. The ones who do, often quickly earn more than the minimum since they are sufficiently productive for the employer to pay them more for their work.
"California is in transition from a tradable goods and services producing economy to a consumption and non-tradable services producing economy. Tradable goods and services are goods and services that can be consumed far from where they are produced. Manufacturing is the classic example of tradable products, but thanks to the internet, services are also increasingly tradable.
These days, many services that were once non-tradable are tradable. Tax preparation, legal research, accounting, and term-paper writing are examples of tradable services that were once non-tradable. As a friend of mine says, anything done at a computer can be done anywhere in the world.
Non-tradable services are those that must be consumed where they are produced. Lawn care, haircuts, and home maintenance are some examples."
This distinction is important.
"Most of California’s wealthy coastal citizens never see California’s poor inland communities. Yet, wealthy Coastal Californians --- particularly from San Francisco --- dominate state policy. They implement policy as if the entire state were as wealthy as the communities they live in. The minimum wage increase is just the latest example.
Decency would seem to require that California find ways to accommodate the circumstances and needs of our least advantaged citizens and regions. We don’t though. Instead we create policy that hurts our least advantaged and makes their challenging lives even more so."
The idea that the wealthy care about the poor is misplaced, they do not. They care about seeing the poor, and being forced to deal with the poor. What the wealthy want is for the poor to disappear, absent that, they want them to earn enough not to be visibly poor. They also want to "fight" for public policies which make them, the wealthy, feel smugly superior, policies like the $15 minimum wage.
It is the same in Oregon but the valley is wealthy, and populated and the rest of the state poor, and unpopulated. The divide in Oregon will be huge.
Wealthy Californian coastal elites will treat the central valley of California like a foreign, third world nation filled with curious poverty stricken people. To the extent they ever travel through the area it is like a school field trip, an educational lark.
The real trick in public policy is to control the wealthy, and to focus their attentions onto policies which will actually have a productive public outcome. The now destitute, and moribund progressive model offers nothing in this regard, but much in the ability for the wealthy to feel smug, and the politicians to access graft, and corruption. This makes the necessary changes difficult . . . but not impossible.
This must change, and soon, or we risk a serious blowback from the poor.