Oh, I think it provides some useful information and perspective, but I certainly don't claim that it tells it all.
For instance, the Cost of Living Index varies from under 85% to over 210% with a max:min ratio of over 2.6. If the federal minimum wage of $7.25 were indexed according, the minimum wage would vary across the country from $5.97/hr to $15.66/hr. So is applying a one-size-fits-all federal minimum the appropriate thing to do? Would it be better or worse if the federal minimum wage was indexed this way? Hard to say. I think of several arguments both for and against.
Another facet that frequently gets debated is whether employers of tipped employees should be required to pay minimum wage. Presently, employers only have to pay $2.13/hr to a tipped employee. But when people want to come to the defense of these poor, exploited tipped employees they almost always overlook two things: First, employers are required to make up any difference between what the employee makes in wages plus tips and the minimum wage, so the tipped employee is guaranteed the minimum wage. Second, most tipped employees don't want to have their employers forced to pay more because it would result is a major loss of income. For example, when I was working as a server at Village Inn back in 1985 the minimum wage was $3.35/hr but for tipped employees it was $2.01. But I was averaging right at $16/hr in tips (after giving 10% to the bussers) -- and the gals that had earned the primo shifts (Sunday mornings) averaged well over twice that. Every restaurant I ever worked in (six, I think) went to great lengths to avoid having anyone work more than 8 hours in one day or 40 hours in one week because they had to pay 150% for hours beyond that. The exception was the tipped employees. They still had to pay 150%, but that only came to $3.02/hr. Consequently, they didn't care how many hours we worked and I routinely worked 60 and 70 hour weeks. If they had been required to pay me the full minimum wage rate, I would have been paid an extra $54 a week. But I made that up in just the first three hours of overtime and the remaining hours typically increased my monthly income by around $2000. The last thing I wanted was for someone to force my employer to stop exploiting me!
It is a very complicated subject that defies any nice, simple, and neat explanation that actually stands up. But we humans have a very hard time thinking in terms of models that aren't fairly nice, simple, and neat. So we pretty much have to keep working with them and just have to always keep in mind that they have major shortcomings and can't be expected to do more then identify potential trends. But we tend to forget that and so base policies too firmly on weak models and often end up with cures that are worse than the disease. But that doesn't mean that we should do nothing.
For instance, the Cost of Living Index varies from under 85% to over 210% with a max:min ratio of over 2.6. If the federal minimum wage of $7.25 were indexed according, the minimum wage would vary across the country from $5.97/hr to $15.66/hr. So is applying a one-size-fits-all federal minimum the appropriate thing to do? Would it be better or worse if the federal minimum wage was indexed this way? Hard to say. I think of several arguments both for and against.
Another facet that frequently gets debated is whether employers of tipped employees should be required to pay minimum wage. Presently, employers only have to pay $2.13/hr to a tipped employee. But when people want to come to the defense of these poor, exploited tipped employees they almost always overlook two things: First, employers are required to make up any difference between what the employee makes in wages plus tips and the minimum wage, so the tipped employee is guaranteed the minimum wage. Second, most tipped employees don't want to have their employers forced to pay more because it would result is a major loss of income. For example, when I was working as a server at Village Inn back in 1985 the minimum wage was $3.35/hr but for tipped employees it was $2.01. But I was averaging right at $16/hr in tips (after giving 10% to the bussers) -- and the gals that had earned the primo shifts (Sunday mornings) averaged well over twice that. Every restaurant I ever worked in (six, I think) went to great lengths to avoid having anyone work more than 8 hours in one day or 40 hours in one week because they had to pay 150% for hours beyond that. The exception was the tipped employees. They still had to pay 150%, but that only came to $3.02/hr. Consequently, they didn't care how many hours we worked and I routinely worked 60 and 70 hour weeks. If they had been required to pay me the full minimum wage rate, I would have been paid an extra $54 a week. But I made that up in just the first three hours of overtime and the remaining hours typically increased my monthly income by around $2000. The last thing I wanted was for someone to force my employer to stop exploiting me!
It is a very complicated subject that defies any nice, simple, and neat explanation that actually stands up. But we humans have a very hard time thinking in terms of models that aren't fairly nice, simple, and neat. So we pretty much have to keep working with them and just have to always keep in mind that they have major shortcomings and can't be expected to do more then identify potential trends. But we tend to forget that and so base policies too firmly on weak models and often end up with cures that are worse than the disease. But that doesn't mean that we should do nothing.