Edward Kennedy: Working for the Poor Man

This weekend there was talk of the Democratic Party attempting to raise the minimum wage above nine dollars per hour. I applaud that attempt. What's more important is this:

"There is also a possibility the wage would be indexed to inflation or some other measure of the cost of living. Ten states already have index adjusted-minimum wages. They provide for automatic increases to the wage in the same way Social Security or Congressional salaries factor in inflation and costs of living."

The wage NEEDS to be indexed to inflation. Currently, the Federal Reserve has more control over inflation than one might think. The obvious and glaring reason has to do with the fact that the FED doesn't include food or energy into their calculation of CPI, the index used to measure inflation. In addition to this point is the fact that the Federal Reserve has the ability to increase the money supply at a whim. If the money supply were to increase, this would cause inflation. Inflation causes prices to increase, but prices don't really increase; rather your dollars are just worth less.

We should note that different wages have different values among regions:

"Liana Fox of the labor-backed Economic Policy Institute said part of the reason for Kennedy's initiative is that by July of 2009, when the federal minimum is $7.25, 12 states with their own minimum wage law will be over $7.25."

"We've never had a situation like that before," said Fox. "It will increase pressure at the federal level."

Thank god for states' rights. And thank god for the rights of the city governments to go one step further. Take San Francisco for example. The minimum wage is already at $9.14 per hour. When you consider the cost of the town, you're still not in the livable wage arena, but at least the city government is making the effort. Again, from CNN:

"Raising the wage to $9 an hour 'would cause a lot of trouble,' said Edwards. 'There are huge differences in local economies. $9.50 an hour in New York and $9.50 an hour in Kansas are two different things."'

It's true that there needs to be an indexing to livable wages, instead of setting a national minimum wage. The nation consists of many different economies, which constitute many different minimum wages. We need to create a system that can peg the different wages to the regions in which they're located. This is definitely a problem, one that could be cured by instituting regional economic centers that monitor the price increases of their respective areas. Conservatives and Republicans will certainly rail against this idea as it would only expand the bureaucratic system currently in place. But it needs to happen.