As a representative of a moderate district that rightfully expects bipartisanship, I understand that Congress must stand up for middle-class families, whose prosperity reflects the full potential of the American economy.
While pro-growth economic policies are delivering significant benefits to our community and country, expanding job growth, productivity, and paychecks locally, we must ensure that no American worker is left behind. Despite our low unemployment and the increasing wages driven by strong economic growth, a livable wage for all American workers remains elusive. This should be unacceptable to each and every one of us.
First, we must replace the term “minimum” wage to “livable” wage, reflecting that each and every American worker should be able to afford basic living necessities.
Moreover, we must adjust this wage in a way that respects the economic diversity of our nation. A wage which works for New York City might have the unintended consequence of driving away business and jobs in Bucks County; conversely, a wage that works in Bucks County would fail to provide workers in New York City with the income they need to make ends meet.
There are reasonable policies that we can explore to benefit American families without threatening small businesses. My colleague from Alabama, Congresswoman Terri Sewell, has been a staunch proponent for a livable wage. Her plan for a regional livable wage allows workers in communities across our nation to see their wages rise, but in a way tailored to minimize negative impact on small business. The idea would boost workers’ purchasing power while ensuring every community stays competitive in the 21st Century economy.
This is an issue that hits home for her. For example, El Centro, California, has nearly the same cost of living as Birmingham, Alabama. Despite this, many workers next year in El Centro will make 65 percent more on average than their counterparts working in Alabama’s state capital, and one of the most populous and prominent cities in the South.
This is the case, because state legislatures have allowed wage standards within their jurisdictions to be dictated by political priorities and pressures. While states are the laboratories of our republic and must be protected, discrepancies that lead to uneven consequences for American workers must be addressed.
One way to solve this issue would be through the implementation of “community tiers,” separating the federal livable wage into distinct categories that reflect the cost of living for different areas in the United States. Communities across the country would be assigned a tier based on how expensive it is to live there. These tiers could be calculated using the Regional Price Parity (RPP) score, a relative measure of how much goods and services cost in an area, calculated by the U.S. Bureau of Economic Analysis. Linking wages to the regional cost of living allows lawmakers to take politics out of the equation and deliver a more livable wage to communities across America.
Under this model, El Centro would be categorized into the same tier as Birmingham. The idea delivers workers in diverse geographic locations with the same regional cost of living, access to the same purchasing power. Ideally, cities with steep living costs like New York and San Francisco would offer livable wages that reflect necessary expenses workers face, while more affordable areas like Indianapolis and Salt Lake City would have a lower mandated livable wage, but one that ensures necessities can be afforded based their RPP.
In Pennsylvania the cost of living is different in Philadelphia, Bucks County, Erie, and Lancaster. We need a policy that respects the geographic and economic diversity of our states and our nation.
With a soaring economy and historically strong consumer confidence, the time is now to put politics aside and enact policies that ensure a fair and just wage for hardworking American families, while strengthening our local small businesses.