Over the last several years, various interest groups have pushed for a $15 minimum wage, sometimes referred to as a "living wage." One criticism of a national $15 wage (aside from the usual problems of a binding minimum wage) is that the cost of living in cities in the United States is significantly different. A $15 wage in Cheyenne, Wyoming, goes much further than a $15 wage in Seattle, Washington. A second criticism of the the $15 living wage is that it is not clear what a "living wage" means. Economists at MIT have "developed a living wage calculator to estimate the cost of living in your community or region based on typical expenses. The tool helps individuals, communities, and employers determine a local wage rate that allows residents to meet minimum standards of living." The table below provides their calculations of living wages in five cities in the United States. The last column provides data on the average starting wage for an unskilled worker. City Living wage (1 adult)* Market wage for general laborer*** Washington, DC $17.64 $14.71 New York City, New York $15.97 $15.99 Seattle, Washington $15.00 $14.51 Harrisonburg, Virginia $11.83 $12.05 Lebanon, Kansas $10.73** $12.25 * Source: Living wage calculator: http://livingwage.mit.edu/ ** Wage data for Smith County *** Based on 40 hours per week Suppose that Congress passed a $15 minimum wage law. Given the current market wages from the table above, in which city(ies) would the new minimum wage not lead to a surplus of labor? Choose one or more: A. Washington, DC B. Harrisonburg C. Seattle D. Lebanon E. New York City Part 2 (1 point) Suppose that Congress passes a $15 minimum wage law. Given the living wages from the table above, in which city(ies) would workers be relatively better off than workers in Seattle? Choose one or more: A. Washington, DC B. Harrisonburg C. Lebanon D. New York City
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A living wage is the minimum income necessary for a worker to meet their basic needs, which varies by location due to differences in the cost of living. The market wage for general laborers is the average starting wage for an unskilled worker in a given area. Show more…
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