A proposed increase in the federal minimum wage to $7.25 will have vastly different effects on workers and businesses depending on where people live, because the cost of living varies so much. $7.25 will buy a lot more in some cities than in others.
To accurately adjust for differences in the cost of living, the $7.25/hour minumum wage should be adjusted to as high as $14.68 in NYC and $12.50 in San Francisco, and as low as $6.46 in Fort Worth and Omaha, according to a study by the National Center for Policy Analysis, see the entire list of cities here.
"Why should we have one minimum wage that is the same regardless of where people live?" asks Robert McTeer of NCPA. "If the goal for all low wage workers to have the same, minimum standard of living, we need different wages for different cities."
Bottom Line: Politically, it would be much harder to pass a COLA-adjusted minimum wage.
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