Pondering the Low Wage Conundrum

Lloyd Omdahl

It seems immoral to have North Dakotans selling their lives for $7.25 an hour. It wouldn’t even be that high if the federal government didn’t set the minimum wage at $7.25.

More:America’s Minimum Wage Crisis

The Legislature passed up the opportunity to start rolling the minimum wage up to $15 an hour by 2027.

The proposal by Rep. LaurieBeth Hager of Fargo lost in committee 12-2 and was swamped on the floor where it was opposed by 79 Republicans and three Democrats, the only bipartisan action of the session.

The U.S. Senate recently   rejected an amendment in the $1.9 trillion   COVID-19 relief bill that would have raised the federal minimum wage to $15 per hour. This means that millions of Americans will continue to live in states in which they can be p  aid as little as $7.25   for an hour of work.    Someone working 40 hours a week at the federal minimum wage level would take home j  ust over $15,00  0 per year before taxes. Though a re  latively small percen  tage of the U.S. labor force earns the federal minimum wage level, there are dozens of major metropolitan areas where the typical worker earns wages of less than $32,000 per year.     To identify the cities with the lowest paying jobs, 24/7 Wall St. reviewed the median annual wage in 389 metropolitan statistical areas using data from the May 2019    Occupational Employment Statistics program    of the Bureau of Labor Statistics. It is important to note that our data reflects wages before the pandemic. It is likely that economic conditions in many of the cities on this list, and in others, have worsened and median wages in 2020 were even lower.    Out of the 25 metro areas with the lowest paying jobs in the U.S. in 2019, 23 were in Southern states. Residents of this region are much more likely to face poverty, low incomes, and other economic challenges.    These are America's richest and poorest states.     Geography is not the only deciding factor in determining income levels. An area's income level This also depends on natural resources, local laws and regulations, and the population's educational attainment. Workers with high school diplomas tend to earn higher wages than those without, and those with a bachelor's degree or higher tend to earn also typically have higher wages earnings than those who have not finished college.    These are the most educated cities in every state.

Meanwhile, an effort to get the $15 minimum wage was grounded at the federal level when the parliamentarian of the House ruled that it could not be included in the $1.9 trillion dollar bill that solved most other problems.

    Ordinarily, North Dakota waits for other states to set the course before dipping its toes in the water. In the case of the minimum wage, this is not the case as the state is surrounded by higher minimum wages.

There were nearly 147 million Americans in the workforce in 2019. Among all workers, including those working part-time, the annual median wage was $39,810. While workers' incomes depend on their education level, career field, and personal aptitudes, another major factor determining income is the area where they live and work.   Because of factors like the cost of living and the financial resources of companies in the area, jobs that might pay relatively low wages in some areas could pay much higher salaries in other parts of the country.     To identify the cities with the highest paying jobs, 24/7 Wall St. reviewed the annual median wage in 389 metropolitan statistical areas using data from the May 2019    Occupational Employment Statistics program of the Bureau of Labor Statistics.     The vast majority of cities on this list are in coastal areas. California's Silicon Valley is home to many of the world's largest tech companies, while New York is home to Wall Street, and many finance giants are headquartered in the Big Apple. These industries tend to pay workers relatively high wages and have become synonymous with the areas in which they are located.    This is the most iconic job in every state.    One common thread linking the cities on this list is educational attainment. Of the 25 metro areas with the highest wages in the country, just one has a bachelor's degree attainment share lower than the U.S. share of 33.1%. College-educated workers tend to earn higher wages than those with no degree, and they are less likely to live in poverty. There is a wide variety of income levels for college graduates, depending on what major they selected as students.  These are the college majors that pay off the most.

  In Montana, the minimum wage is $8.75; in South Dakota it is $9.45; in Minnesota it’s between $10 and $8.21, depending how big you are.  Some North Dakota developers think that a low minimum wage attracts industry and that explains the rush of business into the state.

The point is that none of the states are offering a minimum wage equal to the cost of living. In North Dakota, an 8-hour day would produce a gross weekly income of $58. Of course additional benefits could be added, thereby putting flowers on the poverty wage.

It is true that no one can live on the North Dakota minimum wage so it is fortunate that very few people are stuck at that level. Actual wages are set by employers and not state or federal law and vary considerably across the state.

Our smaller communities are struggling to keep their main streets viable in spite of the declining markets. The small retailers cannot balance their books at $15 per hour and the clerks can be paid only eight or nine dollars an hour in a labor market that provides no employment opportunities.

On the other hand, larger communities have major out-of-state markets that boost personal and corporate income. Among them we will find workers being paid in excess of the $15.

Minnesota has solved this problem by having steps in its minimum wage so the smaller business is not required to pay a “one-size-fits-all” minimum wage. Of course, North Dakota can keep the minimum wage so low that it is never a factor because few in North Dakota are being paid $7.25.

The minimum wage argument has become a problem for the government because the ant-union legislation has destroyed unions as the biggest bargainers for wages and working conditions. The federal government has taken over a lot of the working conditions through the Occupational Health & Safety agency.

So the business community traded unions for federal oversight. And the federal government is always more generous than the individual states so it was no gain for business.

There is no doubt that the fight over minimum wages is one of the battle lines of the “haves” and the “have nots”. To correct the economic deficiencies of the system requires some shifting of private and public resources.

Is it government’s responsibility to get a greater amount of public resources distributed to the “have nots”? We are already doing that with some programs but maybe strategic planning could do more to close the wide gap between the “haves” and the “have nots.”

 It should be obvious to everyone that present system begs for economic justice. A lunch at McDonalds doesn’t cut it.

K. William Boyer is the Managing Editor of the Devils Lake News Journal. He can be reached at kboyer@gannett.com, or by phone at (701) 662-2127.  

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