Well I am back…It has been a while since I decided to get all wound up about something. This time it happens to be all the people discussing minimum wage, especially here in little old Idaho.

I would like to start with some information and statistics from where I live, Idaho. Many of you may know that Idaho is a low wage paying state, but it is also a low cost of living state. As a matter of fact, Idaho was ranked the 3rd lowest cost of living state in the U.S. for 2015. Combine that with our low unemployment rate and conservative government, Idaho is a great state to live in.

You wouldn’t think this to be true by talking to a lot of Native Idahoans. Many of these individuals that have lived exclusively in Idaho their entire lives are under the impression that it is NOT a cheap place to live. I can attest to the fact having traveled to and lived in other states that Idaho is by far an inexpensive state to call home.

Lets take for example a similar size city in California and compare it to a city in Idaho. Modesto, CA has about the same population as Boise, ID. In Modesto, here is an example of how much more life would cost you compared to Boise. Groceries 18% more, Housing 45% more, Utilities 32% more, Transportation 10% more. So on average it cost 26.25% more to live in a similar size city.

In Modesto the minimum wage is the same as the State of CA minimum wage $10.00 per hour. In Boise the minimum wage is the Federal $7.25 per hour. That means in Modesto, minimum wage workers make 27.5% more per hour than in Boise. So as you can see the minimum wage in Boise goes just as far as the minimum wage in Modesto…pretty close right.

OK, lets assume that the Federal government raises the minimum wage to $10.00 per hour. Great right? The people in Boise now have extra money to spend. Not so fast…a raise in the minimum wage will cause inflation in Boise. Prices of goods and services will go up…It is hard to say by how much, but I will look at that in a minute. Now lets look at Modesto, they didn’t get an increase in minimum wage because they are already at the $10.00 per hour mark. So did this increase in the Federal mandate help those people? NOPE!! In fact, it added more people to the Federal minimum wage level!!

OK, lets look at another statistic. In 2014 the state of Idaho had approximately 412,000 workers that were paid on an hourly basis. of that 420K only 21,000 were paid at or below minimum wage (about 5.1%) In 2014 Idaho employed around 628,000 people. That means only 3.3% of all employed Idahoans were paid at or below minimum wage. The national average of minimum wage workers ages 16-24 years old is 31.9%. That means if we use that average for Idaho, approximately 6700 of those 21,000 minimum wage workers were 24 years old or younger…the majority are 16-19 year old around 15%.

To be fair, lets say the Federal government raised the minimum wage to $10.00/hr. That means in Idaho at least 21,000 of the 628,000 workers will get a pay increase. Lets assume that another 5% were making over the minimum wage but below $10/hr. That would give us 41,000 people who would get a pay increase. That is 6.5% of the working population in Idaho. Those are generous numbers in my opinion, since the median wage in Idaho is $14.93 per hour. But that’s okay, I am a generous guy! 😉

Now you are probably thinking how much of an effect could this possibly have on the economy in Idaho. Well let us take a look. On average 57% of minimum wage workers are employed in the Leisure and Hospitality industry. That means hotels, restaurants, transportation, recreation, tourism, and entertainment. The cost of goods and services at all of these places will definitely increase to cover the cost of paying employees.

This means that 93.5% of the workers in Idaho just took a pay cut. What you talkin’ bout Willis? A Pay CUT?? Put it this way, if the cost of goods and services go up, but your pay does not, that is the same as taking a pay cut. Lets say that the cost of living goes up to match the increase in the minimum wage increase 27.5%. All those people that thought they benefited from the wage increase actually broke even, and the other 93.5% of people are making less money every year because of the increased cost of goods and services.

That’s Idaho, how will this effect other states? Well I am glad you asked! Lets look at California. This lovely little Progressive state already has a Minimum wage of $10.00 per hour, so most people in that state will not benefit from a Federal increase at all. In fact, the federal numbers are skewed because California already pays above the Federal minimum, so it is hard to determine how many more people in CA would be working at or below Federal standards, but I would venture to guess it will be in the 10’s of thousands.

Currently 21 states follow the Federal minimum wage guideline. Most of those 21 states also boast the lowest cost of living. Basically a Federal minimum wage increase will have a drastic effect on these 21 states. Increasing their cost of living, causing inflation etc…So what is the right minimum wage amount………..$0.00………..That’s right folks, none. there is no need for a Federal or even a State mandated minimum wage!! Here is a little video to help you understand…Minimum Wage

Because I am such a nice guy, and I like to give credit where credit is due. I have attached the document from 2014 where I got a lot of these numbers for your review. I suggest spending some time looking through it, one of my favorite parts is the section that shows minimum wage workers by education. Note that workers that attend an Occupational program or work in a trade are less likely to get paid minimum wage than those that get an Associates or Bachelors degree. 1.7 percent of people that went through Occupational programs make minimum wage compared to 2.2% with an Associates degree and 1.9% with a Bachelors degree. I wonder if that has anything to do with our society forcing kids to go to college and steering them away from the Trades…well I think I already covered that topic in my Blog under Life Skills.

Until next time…

Dick