I just had an interesting thought about the minimum wage

[Massacure]

What would happen if the federal government required that each state calculate the average cost of renting an apartment or buying a house of less than 2000 square feet on a county by county basis? And then what would happen if the minimum wage were set in each county such that it would be the average cost per month would be multiplied by 12 for each month in the year, divided by 2080 for the amount of full time hours in a year, and then multiply by 3 since its not recommended to spend more than 33% of your income on housing?

For example, if rent or mortgages were $600 a month in a rural area, the minimum wage would end up at about $10 an hour, but if you go to say a big city and the average cost is $1500, the minimum wage would be about $26.

I'm sure that a jump of $20 an hour in the minimum wage would need a transition period, so perhaps it would be wise to limit the raises required to say 20% per year. The government could say, the minimum wage is $6.55 in 2008, it is the new formula or $7.86 (whichever is lower) in 2009, it is the new formula or $9.43 in 2010, the lower of the new formula or $11.32 in 2011, the lower of the new formula or $13.58 in 2012 and so on.

What would be the likely effects? Would it balance out the price of real-estate between regions? Would it increase the standard of living? Would it kill the economy? I'm interested to see what people think.

[phantom power]

1. would it be based on location of employer or employee?

[Massacure]

2. The employer. n/t

[baldguy]

3. So in Manhattan the min wage would be $90/hr?

People don't necessarily work where they live.

[Ashy Larry]

4. Sounds good to me.

Here is a website with lots of information on the living wage issue:
http://www.epi.org/content.cfm/issueguides_livingwage_livingwage

[gravity]

5. Why don't you just index it to the CPI

Housing varies a lot depending on the region, that it is going to cause too many problems. Especially a place where there is a lot of foreclosures, which lowers house prices, which lowers wages, which creates more foreclosures.

[ColbertWatcher]

6. Maybe something like that could work, but only AFTER housing costs are addressed.

Something has to be done about housing poaching before anything else.

When one single entity can buy property essentially taking them off the market and manufacturing a rise in housing costs for a given area.

I can kinda understand a bank owning property (until a loan is paid off). I can even understand a management company renting out apartments. But I cannot accept these "LLCs" owning houses that the owners do not live in.

I know it's the free market and supply and demand and blah, blah, blah. But something about that whole arrangement does not sit well with me.

[ContinentalOp]

7. Your idea wouldn't work because the disparity is too great.

If the median price of a home in San Francisco is $650,000 while it's only $79,999 in Detroit, there's an eightfold difference between the high and the low.* So, say you put a $10 minimum wage in place at the bottom, you would need to have an $80 minimum wage in San Francisco! Or conversely, if you decided $25 is the highest the minimum wage should go, then you would have to lower Detroit's minimum wage to $3!

I think it would kind of spiral out of control. If you dramatically increased the minimum wage in a city like San Francisco, suddenly more people could afford to buy, which would greatly increase demand in an area where supply is really limited, and the housing prices would just keep going up and up.

* http://www.housingtracker.net/old_housingtracker/